Insurance company boss up for $4,5 million fraud

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By Mary Taruvinga

FIDELITY Life Assurance of Zimbabwe recently lost $4,5 million to a top official who allegedly pocketed money which was meant for a company project.

German Mushonga (43), who was employed as Finance and Projects director, has been dragged to court to answer to 27 fraud counts.

Fidelity Life Assurance of Zimbabwe, the complainant in the matter, is being represented in court by its managing director Nyaradzo Matindike.

According to prosecutors, Mushonga’s duties included reconciliation of all accounts, payment of creditors, accounting for all cash received and day-to-day management of all property developments of the company.

The company’s core business includes pension administration, administration of life policies and property development.

Court on Wednesday heard that sometime in 2014, Fidelity Life Assurance of Zimbabwe Ltd purchased land in Southview Park, Waterfalls which was demarcated into 5 300 residential stands for resale.

Mushonga and one Jorum Murape were mandated to oversee the running and payment of the project.

The company contracted Tensor Systems Pvt Ltd to do civil work which includes servicing of the stands, construction of roads, sewer and water reticulation.

In December 2015, Enerst and Young was tasked to carry out an audit at the company.

During the audit, it was established that there was $4,5 million which was allegedly paid as an advance payment to Tensor Systems Pvt Ltd without supporting vouchers.

On March 10, 2017, the company held a meeting where the audit chairperson queried the fact that despite an advance payment of $4,5 million which was made to Tensor Systems Pvt Ltd, the two employees, instead of acquitting the pre-payment, continued to pay invoices received from the contractor through the consulting engineers, Prostrust Consulting Engineers Pvt Ltd.

However, Tensor systems Pvt Ltd were now refusing to continue working due to non-payment.

It was also established that they received $25 675 667 instead of $30 400 177 which was released by Fidelity Life Assurance of Zimbabwe.

Acting in connivance with Murape, Mushonga created a deal note with a face value of $2 940 184 which they deposited into Tensor systems Pvt Ltd account.

They did this knowing that Fidelity Life assurance had no funds to support the deal note, court further heard.

Their actions were contrary to the procedure of creation of deal notes which stipulates that they (deal notes) could only be created when there are funds to support it.

The creation of the deal notes by the accused was meant to misrepresent to Tensor that they were going to honour their promise to pay on maturity of the deal note and cover up for $2 940 184 which they had misappropriated and was due to Tensor Systems Pvt Ltd.

As a result of the alleged actions, the company lost $4,5 million and nothing was recovered.