Gono funded Grace Mugabe extravagance

Gono funded Grace Mugabe extravagance

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By Bonny Schoonakker

GIDEON Gono, now the governor of Zimbabwe's reserve bank, personally raised thousands of US dollars to fund first lady Grace Mugabe's foreign shopping sprees when he was chief executive of one of the country's largest commercial banks.

Gono's role as financier of the extravagant spending trips is exposed in a list of so-called "parallel market" deals carried out by the Commercial Bank of Zimbabwe (now known as Jewel Bank) in defiance of laws that Gono is now sworn to uphold.

The Sunday Times, which has the list, has established that scores of politicians, including Zanu-PF bigwigs, and business people benefited from the deals, at a time when Zimbabwe's currency was in free fall. The black market was used to obtain cheap dollars which were then sold at much higher official market prices or used to fund overseas shopping sprees.

Among the more notable transactions in a list of 1 250 deals over a five-month period is one on January 11 2002 in favour of "Mrs G M (Cash FX)". According to a former CBZ official, this was one of six parallel market deals conducted on behalf of the Mugabes during the period concerned.

The list also records R5.2-million raised on behalf of jailed former Finance Minister Chris Kuruneri, in a February 2002 deal that is the subject of fraud and corruption charges which he now faces.

The names of businesswoman Jane Mutasa, recently charged for corruption and forex fraud, and Chinhoyi MP Philip Chiyangwa, out on Z5-million bail and facing similar charges, also occur frequently.

According to the CBZ employee, Gono personally issued and authorised the order to raise US100 000 on behalf of Grace Mugabe on January 11 2002. The cash "was invariably collected by one of Mugabe's aides in a leather briefcase", he said.

"The cash was delivered to Gideon Gono's office and booked to Gono's special account, which was basically his slush fund. These illegal transactions required by the Mugabes, his family and his officials were booked to this account." The official said the money was used to finance a trip to London, including a visit to Harrods, in the four weeks following the transaction.

The explosion of the "parallel market" is cited as one the key reasons behind the collapse of the Zimbabwean currency, to Z6 000 to the US dollar from Z10 to the US dollar within a few years.

Although the CBZ obtained most of the money on the black market, criminal prosecution is unlikely because Gono declared an amnesty for such deals less than three weeks after his appointment as governor of the Reserve Bank of Zimbabwe.

Jewel Bank's biggest single shareholder is the SA financial services group Absa, which owns 26%. The Zimbabwean government owns 20% and the Libyan government, whose sales of oil to Zimbabwe are financed by the bank, also owns a significant stake.

CBZ was also the bank officially responsible for raising money for the president's foreign travels and for financing grain and fuel imports.

This week a senior member at Absa said he was unaware of any illegal activity at CBZ during Gono's tenure.

However, the senior CBZ official said that parallel market deals, and the profits made on them, were hidden from the bank's auditors, KPMG, which were given only "limited exposure to the bank's accounts".

"The Mugabes would receive the cash or have the funds transferred with Gono's full knowledge and authority and never with the 'direct' approval of the reserve bank," he said.

Contacted for comment, Gono did not deny raising money for the Mugabes during his tenure at CBZ, but said, through a spokesman, that "issues relating to banks and their clients were confidential".

In any case, the issue should not arise because all banks had received amnesty from Gono for illegal forex deals done before December 1 last year, when he became reserve bank governor.

Louis von Zeuner, Absa group executive director responsible for Jewel Bank, said Absa was "quite satisfied with its current position. Although we are extremely fortunate to have an MD of the calibre of Nyasha Makuvise, the bank's current CE, we have no doubt that the good work was started under the leadership of Dr Gono. External audit reports, financial performance as well as reports from the Reserve Bank of Zimbabwe confirm this."
From the Sunday Times (SA)
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