Army, police benefited from Gono graft – Kereke

via Army, police benefited from Gono graft — Kereke – NewsDay Zimbabwe January 10, 2014

The ongoing fight between Bikita West Member of Parliament Munyaradzi Kereke and former Reserve Bank of Zimbabwe governor Gideon Gono has opened a can of worms on the goings on at the apex bank in the last decade.

Kereke, a former adviser to Gono, makes sensational claims about Gono’s alleged unorthodox practices in his answering affidavit submitted to the Constitutional Court on Wednesday in a matter in which he wants the Zimbabwe Anti-Corruption Commission (ZACC) to probe alleged illicit dealings that prejudiced the State of millions of dollars.

ZACC and Gono are cited as the first and second respondents respectively.

The Bikita West legislator claims that Gono operated an account he termed “special projects” which he alone personally handled and whose transactions no staff member or any board member could question.

According to Kereke, Gono allegedly purchased over 50 million shares in National Discount House on behalf of the central bank, but only three million shares could be accounted for.

“Included in the special projects account is an investment in NDH. Based on information availed to us, the Bank’s shareholding is 53 580 984 shares. We were not availed share certificates for the full shareholding, but for 3 051 309 shares,” wrote BDO Kudenga auditors in their report attached as an Annexure in the response to the Concourt application.

Kereke also alleges that Gono abused his authority by directly dealing with a company called Intshona to supply the country with fertilizer. Intshona, Kereke said, failed to deliver the fertilizer for close to a year despite having been paid $20 million, thereby prejudicing the State not only in monetary terms, but lost opportunities in agriculture.

He claimed Gono siphoned cash that was being bought by the Central Bank from the parallel market through the bank’s security division using the Zimbabwean dollar on a routine basis.

“When time for audits came well after the funds had been squandered, the second respondent would then ex-post cover up his tracks by telling lies that such funds had been deployed towards sensitive national ends, along with the rest of expenses that would have been discharged well above aboard,”  Kereke said.

According to a KPMG 2008 audit report attached as an Annexure, the RBZ purchased foreign currency amounting to $76 934 200, R1 410 000 and GBP21 511. The Zimbabwe Republic Police got $30 269 000, Zimbabwe Defence Forces $37 525 200, R1 410 000 and GBP21 51 while
$750 000 went towards International Banking.

“The above disbursements were made throughout the year at different dates. Except for the disbursements to International Banking which was supported by a request, we were made to understand that all other payments did not have documented request letters and were mostly based on verbal request,” wrote KPMG in their audited reported submitted to the Concourt by Kereke.

“We were availed with a letter signed by the respective departments acknowledging receipt of the funds. This letter was only done this year (2009) for the purposes of the audit. From discussions with management, it is not clear what those funds were being used for, but were just being provided on request. Also we were not availed with evidence that at the time of the transactions, these were properly authorised by the bank structures.”