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Chiadzwa diamond swindle 6 in court
09/11/2010 00:00:00
by Staff Reporter
 
Fraud rap ... Lovemore Kurotwi leaves court on Monday
 
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THE six senior executives of two diamond mining firms arrested on fraud and criminal abuse of office charges last week finally got their day in court on Monday.

Five of the officials work for the state-owned Zimbabwe Mining Development Corporation [ZMDC] and a sixth for Canadile Miners which entered a partnership with the Zimbabwe government to mine diamonds in the Chiadzwa area of Marange.

Canadile Miners boss Lovemore Kurotwi, 40, is accused of fraudulently acquiring a licence for diamond mining with the help of ZMDC executives led by the company’s CEO Dominic Mubayiwa, 49, who stands charged with misleading Mines Minister Obert Mpofu about Kurotwi’s investment.

The men’s first day at the Harare Magistrate's Court after their arrest last Thursday was bogged down in legal arguments, with EIGHT lawyers in court to try and secure the men’s release.

Kurotwi appeared alongside Mubayiwa, ZMDC company secretary Tichaona Muhonde, 33, former ZMDC chairperson Gloria Mawarire, 39, and board members Ashton Sibusiso Ndlovu, 48, and Mark Tsomondo, 53.

Lawyers for the six men are all seeking their unconditional discharge. The hearings will continue on Tuesday.

The Director of Public Prosecutions in the Attorney General’s Office Florence Ziyambi and chief law officer Chris Mutangadura are opposing bail to the six because “they are facing serious charges and the evidence against them is overwhelming”.

Prosecutors said police needed time to interview witnesses in South Africa, adding that more suspects were likely to be arrested and bail for the six men could result in evidence pollution.

Kurotwi is being represented by four lawyers -- Advocate Louis Uriri, George Chikumbirike, Shingai Mutumbwa and Belinda Rupapa. Uriri also represents Mubayiwa while Bruce Mujeyi is fighting Muhonde’s corner.

Mawarire is being represented by prominent lawyer, Jonathan Samkange, while Ndlovu has called on the wits of Mordecai Mahlangu. Melina Machiya is representing Tsomondo.

Investigators say on March 27, 2009, Kurotwi approached Minister Mpofu and held discussions with a view to forming a joint venture company with the government to mine diamonds.

It is alleged that Kurotwi misrepresented that he was a representative of Benny Steinmeitz Group Resources [BSGR].

Kurotwi allegedly wrote to Minister Mpofu indicating he represented Core Mining, a BSGR special purpose vehicle, and had worked with the company for three years. He said the firm could inject US$2 billion into the mining venture, it is alleged.



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The State says the minister was satisfied with the explanation and referred the matter to Mubayiwa for further discussions.
On April 7, it is alleged, Kurotwi and Mubayiwa discussed the issue.

Kurotwi allegedly wrote to Mubaiwa on April 15 informing him that BSGR was the underlying investor with Core Mining as the special vehicle.

On June 22, it is alleged, Mubayiwa wrote to Minister Mpofu and indicated that ZMDC had received numerous expressions of interest from potential investors but recommended BSGR.

It is alleged that the minister then authorised the agreement, which was to be a 50-50 joint venture since he was under the impression that Core Mining was a subsidiary of BSGR.

On July 24, Muhonde drafted a joint venture agreement between Marange Resources (Pvt) Ltd — owned by ZMDC — and Core Mining.

It is alleged Muhonde and Mubayiwa then abandoned that agreement and connived with Yeuda Litch and Subithry Naidoo (still at large) to draft another contract with them as guarantors of Core Mining. The State says this was signed on July 24.

It is further alleged that Kurotwi and Muhonde knew that Litch and Naidoo were not Core Mining shareholders but did not disclose this to Minister Mpofu.

Mubayiwa allegedly sought authority from the minister to go to South Africa to carry out due diligence.

Authority for Mubayiwa, Muhonde, Mawarire, Ndlovu and Tsomondo to proceed was granted between August 4 and 6. It is alleged that the five discovered that Kurotwi had misrepresented that Core Mining was an operational firm.

Instead, the State says, they connived to misrepresent to Minister Mpofu that Core Mining had satisfied ZMDC’s investor evaluation criteria and submitted a favourable report recommending the joint venture’s formation.

The ZMDC board, it is alleged, authorised Mubayiwa and Muhonde to enter into a shareholding agreement with Kurotwi, which was signed on August 14. This led to the formation of Canadile Miners, which started mining in Marange.

Kurotwi, it is alleged, did not invest the US$2 billion he had pledged but financed Canadile’s operations through rough diamond sales. The firm had to borrow US$1,5 million from Agribank as well, it is alleged.

The State says ZMDC suffered an actual prejudice of US$10,546,160.22. This is 50 percent of the 417,016.4 carats sold and a potential prejudice of US$33,059,406, being 50 percent of the 1,101,980.2 carats held.

Opposing Mawarire’s placement on remand, Samukange charged that Minister Mpofu approved Canadile’s formation.

"It is actually Mpofu who approved the joint venture agreement with all the knowledge that was required. He was actually better informed than anyone else. It is his baby and don’t think he would dare take the witness stand and testify,” Samkange said.

"He was aware of what was going on. He won’t take to the witness stand to be cross-examined by us.”
 
Samukange also wondered why ZMDC chairman Godwills Masimirembwa was a complainant in the matter.

"Masimirembwa was not there when the agreement was signed. He was not even part of the agreement and was not anywhere near the negotiations which formulated the joint venture agreement."

One of Kurotwi’s lawyers, Chikumbirike, accused Minerals Unit police officers of trying to abduct his client.

"I have a complaint of a serious nature,” the lawyer told the court. “On Sunday, police officers from the Minerals Unit signed Kurotwi for court at around 2100 hours.

"Word got around that they wanted to take him to Bulawayo. For what? As his lawyers, we rushed to the police station as a measure to make sure that nothing sinister would happen."

(additional reporting Herald)


 
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