THE CRIMINAL ACTS AND ABUSE OF OFFICE BY DR GIDEON GONO
DR GONO’S EXCESSIVE BORROWINGS
13.1 As at the end of July, 2011, DR GIDEON GONO’s directly owned companies, being his New Donnington Farm and Lunar Chickens collectively owed US$40.1 million to local banking institutions. DR GIDEON GONO is the principal owner and Chairman at the said operations.
13.2 At that time, end of July, 2011, New Donnington Farm, being DR GIDEON GONO’s farm owed local banks the following amounts: CBZ Bank (US$25.9 million); Premier Bank (Eco Bank) (US$358 thousand); Metropolitan Bank (US$987 thousand); Stanbic Bank (US$1.5 million); and ABC Bank (1.5 million); whilst Lunar Chickens owed Interfin Bank (US$1.85 million); Kingdom Bank (US$6.9 million) and Renaissance (Capital) Bank (US$1.2 million). There are a number of documents at hand which present proofs of these borrowings. It is important to note that even in cases where the loans would have been secured offshore say from Afreximbank of PTA Bank, it is standard banking procedure that such exposures are duly recorded on the balance sheet of the local disbursing bank for all purposes of determining the bank’s credit risk and capital adequacy prudential requirements.
13.3 Whilst it is not criminal for DR GIDEON GONO or his own companies to borrow any amount from the banking sector per se, the following factors attract serious moral and criminal blame on DR GIDEON GONO on account of both abuse of office and misuse of public funds by DR GIDEON GONO:
13.3.1 DR GIDEON GONO was Governor of Zimbabwe’s Central Bank. By excessively borrowing from almost every other bank, this directly undermined his independence and objectivity in firmly supervising banks in Zimbabwe. It is largely the reason why Zimbabwe recently experienced repeated bank failures due to lax supervision by the Central Bank owing to the fact that DR GIDEON GONO was highly compromised by his excessive borrowings from his regulatory subjects.
13.3.2 DR GIDEON GONO must produce the list of assets he used to serve as collateral for the US$40 million plus borrowings from banks. He must list when those assets where bought and how they were paid for. In the case such assets are held in shelf companies DR GIDEON GONO must reveal to the Commission who the directors of those companies are and how they funded those assets. This would explicitly bring about the truthful submission that DR GIDEON GONO used assets bought using Reserve Bank funds to secure his own private borrowings. DR GIDEON GONO cannot argue that his loans had no security for such a case is inadmissible by the very same Reserve Bank of Zimbabwe credit risk prudential rules on banks DR GIDEON GONO must strictly enforce in the public interest.
13.3.3 Two banks that are heavily owed money by DR GIDEON GONO virtually collapsed (Renaissance Bank and Interfin Bank) on the back of bad loans and DR GIDEON GONO as Governor of the Central Bank was a significant cause of such bad loans. The High Court recently ruled in favour of Capital Bank for the bank to attach DR GIDEON GONO’s properties as execution for a long outstanding bad loan DR GIDEON GONO’s Lunar Chickens project failed to pay and DR GIDEON GONO stood as surety.
13.3.4 The fact that DR GIDEON GONO as Governor of the Central Bank actively played a part in degrading the quality of banks in the Zimbabwean economy yet he was supposed to oversee the supervision of the same banks must attract the deepest reprimand of DR GIDEON GONO by society in general. DR GIDEON GONO merited outright dismissal from office if not self-imposed resignation on account of these glaring excesses and conflict of interest. The Constitution of Zimbabwe explicitly bars anyone who fails to repay borrowed loans from holding a public office.
DR GONO’S MULTI-MILLION DOLLAR RESINDENCY
13.4 DR GIDEON GONO fraudulently took at least US$15 million in cash from the Reserve Bank of Zimbabwe between 2007 and 2008 through Mirirai Chiremba who at that time got the foreign exchange from parallel market purchases and used same to construct DR GIDEON GONO’s multi-million dollar residency in Borrowdale, Lunar Road.
13.5 The Reserve Bank’s books of accounts were then balanced by exaggerating amounts declared as having been extended to various Government agencies.
Theft of US$6.5 million
13.7 It is an absolute fact that the Reserve Bank of Zimbabwe was defrauded of US$6.5 million on or around June/July 2008 and this entire amount was written off the Reserve Bank of Zimbabwe’s audited income statements.
13.8 The money was advanced to a company called Saltlakes Holdings under signature of DR GIDEON GONO under a Memorandum of Deposits (MOD) programme.
13.9 DR GIDEON GONO actively facilitated this fraud through a convoluted array of write-offs well orchestrated between DR GIDEON GONO and Saltlakes Holdings.
13.10 This fraud was also under active investigation by the Zimbabwe Republic Police on or around 8th of September 2011 under reference CID Homicide Harare DR 15/07/10. DR GIDEON GONO openly refused to cooperate with the Zimbabwe Republic Police in their investigation of this fraud which has frustrated progress in this serious fraud case.
13.11 BDO Kudenga and Co auditors verified and confirmed that indeed the US$6.5 million was due to the Reserve Bank as at 31 December 2008 from Saltlakes.
US$200,000.00 CASH GIVEN TO THE FINANCIAL GAZETTE
13.12 DR GIDEON GONO abused his office by giving US$200,000.00 cash belonging to the Reserve Bank of Zimbabwe to the Financial Gazette, a company in which he is the majority shareholder. This amounts to theft of public funds. The Editor, Mr Hama Saburi and the CEO received the cash from the RBZ.
THEFT OF GOLD
13.13 DR GIDEON GONO routinely sold gold belonging to the Reserve Bank of Zimbabwe using runners and cash from such sales would be given to DR GIDEON GONO for own gain. The writer routinely cautioned DR GONO against this but to no success.
13.14 In their 2006 Audit, Deloitte and Touche picked that a total of 403.53 ounces of gold coins were missing. DR GIDEON GONO was asked about the whereabouts of these coins but responded that “The process of investigating the location of the gold coins is ongoing”. Three years letter in 2009 when BDO Kudenda and Co where conducting the 2008 Audit, still the gold coins worth around US$350,794.57 at the ruling price of US$869.75 per ounce as at 31 December, 2008 were missing.
13.15 On or around 23 March 2009, DR GIDEON GONO authorised disposal of 67.84 kgs of gold belonging to the Reserve Bank of Zimbabwe. Out of the proceeds of about US$1.83 million, DR GIDEON GONO took US$200,000.00 in cash for an undisclosed purpose unrelated to the Reserve Bank of Zimbabwe. The writer once again queried this but was rudely shut out. The writer made reports to State Security but they tipped DR GONO and the matter died there.
Carslone Enterprises (Private) Limited (“Carslone Mine”)
13.16 The Reserve Bank of Zimbabwe owned 100% and operated a mine called Carslone Mine in the Midlands Province.
13.17 DR GIDEON GONO acting through his subordinate Mirirai Chiremba caused the fraudulent transfer of ownership of this mine to a largely privately owned joint venture operation without the Reserve Bank of Zimbabwe Board approval.
13.18 This effectively caused the Reserve Bank of Zimbabwe to be defrauded of its gold mine on 1 April 2011. Numerous inquiries by the Parliamentary Committee on Budget and Finance on Carslone went un-responded to by DR GIDEON GONO, further undermining the purity of this transaction.
13.19 This transaction breached basic corporate governance requirements for a Central Bank, as well as being utterly fraudulent.
FRAUDULENT Saudi Arabia Gold Deal
13.22 On 12 May 2006, the Reserve Bank of Zimbabwe entered into a very corrupt, detrimental contract, under the blessings of DR GIDEON GONO where Zimbabwe’s purified fine gold from the Reserve Bank of Zimbabwe was being sold to a private jewellery company in Saudi Arabia called Suliman Al Othaim Jewellery at an incomprehensible discount of 34% at a time Zimbabwe itself was on its knees short of foreign currency.
13.23 Gold worth US$5 million was shipped under this very weird, fraudulent and reckless contract that was highly prejudicial to Zimbabwe.
13.24 The corruption around this transaction is further amplified by the fact that on occasions, DR GIDEON GONO would send Millicent Mombeshora to fly to Saudi Arabia to the jewellery shop which was receiving this mysteriously discounted gold.
13.25 The world over, no country, let alone that in dire need of foreign currency would sell pure fine gold at a discount of 34% when gold itself is just as good as cash. Doing so is nothing short of treasonous behaviour by a Central Bank Governor rampaging on national reserves he is supposed to safeguard.
13.26 No matter what technical jargon DR GIDEON GONO may seek to field as justification for the strange 34% discount on fine gold bullion, the actions by DR GIDEON GONO clearly betrayed the trust bestowed on him by the country for him to jealously safeguard the country’s foreign exchange and gold reserves.
13.27 DR GIDEON GONO presided over this criminal transaction which he secretly handled personally with Millicent Mombeshora. He reacted very violently when the writer unearthed it and confronted him.
13.29 In their detailed Management Report for the 2006 31st December Audit, Deloitte and Touche auditors picked this 34% discount anomaly but nothing was done.
13.30 The Commission must unravel this unbridled act of fraud against every Zimbabwean and bring DR GONO to justice. STATE SECURITY must also explain why they tipped DR GONO and did nothing when the writer reported the matters to them.
Theft of Reserve Bank of Zimbabwe Stock Exchange Listed Shares
13.31 The Reserve Bank of Zimbabwe used to routinely buy shares from the Zimbabwe Stock Exchange as part of its investment programme between 2004 and 2008.
13.32 On 27 January 2006, DR GIDEON GONO acting through Millicent Mombeshora, through whom the bulk of the shares DR GIDEON GONO would buy the shares, regardless of the curious fact that she was not in the Finance Division, caused the fraudulent and irregular release of 67,322,636 (worth around US$7 million then at around 10cent per share) Dairibord and 31,187,000 (worth around US$6 million then at around 20cents per share) Cottco signed blank share transfers and share certificates belonging to the Reserve Bank of Zimbabwe to Millicent Mombeshora’s individual person.
13.33 No where in the history of Central Banks in the world would one ever get a case where shares worth millions of US$ belonging to the Central Bank are released to an individual on blank signed transfer forms and those shares never recorded in the Central Bank’s asset register or share certificate register. This act alone clearly shows beyond any reasonable doubt the fraudulent intent by DR GIDEON GONO and Millicent Mombeshora on these stolen shares.
13.34 These share certificates vanished completely from both the Reserve Bank share register and books of accounts for 2006, 2007, 2008 and both DR GIDEON GONO and Millicent Mombeshora refused to disclose where they had put the shares. These shares were never recovered.
13.36 DR GIDEON GONO’s criminal blameworthiness as Governor of the Central Bank is deepened by the fact that he adamantly approved that these shares be taken out of the books of the Reserve Bank of Zimbabwe and all efforts by auditors to have the matter unravelled were fruitless.
13.37 Former Reserve Bank of Zimbabwe Division Chief of the Finance Division Mr Hillary Munyati resigned in the midst of the share theft scandal and the writer actively worked with Mr Munyati and Mr Masoso who took over from Mr Munyati to frustrate the theft by DR GIDEON GONO and Millicent Mombeshora.
13.38 Between 2007 and 2008 DR GIDEON GONO, again acting with Millicent Mombeshora and via Remo Stock Brokers externalised at least US$10 million worth of shares belonging to the Reserve Bank of Zimbabwe to the London Stock exchange, and shares worth around US$3 million were given to Remo for their own account ostensibly to pay off commissions and an unclear loan, whilst the balance imported fuel which went into a special fuel fund for the 2008 Harmonised Elections. The full US$10 million worth of fuel was never accounted for, as DR GIDEON GONO and Millicent Mombeshora exclusively kept the fuel coupons between themselves. The total value of funds generated from the share disposal in London was never fully reconciled.
13.39 DR GIDEON GONO’s criminal nature was typically subsumed and kept hidden under his tendency of blending genuine Government programmes with other personal operations. When Auditors dared to ask DR GIDEON GONO for answers he would routinely gross everything under “national programmes” such as the 2008 Elections. The issue of abuse of share proceeds is a typical case in point.
13.40 DR GIDEON GONO should fully reconcile where the shares which the Reserve Bank of Zimbabwe held between 1 December 2003 and 31 December 2010 have all gone to. The Schedule of Discovered documents gives the shareholdings during the second quarter of 2009 which DR GIDEON GONO must also fully account for.
Gross Irregularities, Fraud and Abuse of Office on Farm Equipment
13.42 DR GIDEON GONO abused his position to award himself excessive quantities of farm equipment, taking at least 2 mega Combine Harvesters, 12 Tractors, 4 seed drills, 4 planters, and 4 boom sprayers and imported expensive grain silos from South Africa using exporters surrender funds. Please take note that the writer never got anything, not even a wheelbarrow from this programme.
13.43 What DR GONO did is absolutely unacceptable behaviour of a Central Bank Governor, which is not only abusive but criminal. It was, therefore, the height of intellectual dishonesty for DR GIDEON GONO to brazenly sue the writer for damages when the writer was simply making a genuine clarion call for DR GIDEON GONO to exercise utmost restraint in safeguarding public funds against the background of his excesses.
13.44 At one point, such abuse by DR GIDEON GONO was detected by State Security and was well documented as proved in the Memorandum which the writer can produce but STATE SECURITY looked the other way and did nothing to bring DR GONO to account.
Payments for Equipment Not Delivered
13.45 DR GIDEON GONO, under his direct signature authorised for payment of very substantial amounts of money ostensibly for the purchase of tractors, motor vehicles and generators which were never delivered to the Reserve Bank of Zimbabwe.
13.46 Forensic audits are in order in the public interest to check the possibility of fraudulent collusion between DR GIDEON GONO and the companies that received hefty sums of money under signature of DR GIDEON GONO but never delivered the products to the Reserve Bank of Zimbabwe.
13.47 Efforts by External Auditors to have DR GIDEON GONO correct this anomaly were summarily dismissed by promises that management was going to look into it. This, however never happened.
13.49 The overall effect of DR GONO’S very suspicious payments for no deliveries is that the Public has been defrauded of millions of its money.
13.50 External Audit reports for 2006; 2007; 2008 and 2009 as can be easily verified present explicit examples of the multiple cases of prejudice as submitted by the writer. The total prejudice is a least US$15 million and DR GIDEON GONO’s consistent air of indifference on this raises more questions on his commitment towards safeguarding the nation’s gross foreign exchange reserves.
13.51 The other very disturbing irregularity is that the bulk of these assets fully paid for but never received by the Reserve Bank of Zimbabwe are not reflected in the books of accounts of the Central Bank.
13.52 This raises a more fundamental question of how the audited accounts of the Reserve Bank of Zimbabwe, particularly for 2006, 2007, 2008 and 2009 were signed off when they omitted the glaring anomalies the Auditors themselves had picked.
13.53 The prominent reason for this is that external auditors of the Reserve Bank are themselves compromised in that they get direct payment of fees from the Reserve Bank itself and such fees are negotiated and agreed upon with the Reserve Bank. It can not be ruled out that the External Auditors tend to look the other way on areas where they pick anomalies to avoid financial sanction.
Motor Vehicles and Generators
13.54 On 27 September, 2007, DR GIDEON GONO directed the Reserve Bank of Zimbabwe’s procurement Division to acquire for him 10, 4×4 Prado vehicles which he later took delivery of for his own undisclosed personal use. This same practice was the norm in later years and months.
13.55 Also DR GIDEON GONO fraudulently signed an acknowledgement of debt on 3 March, 2009, with Trade Access (Pvt) Limited, Oasis Motors for US$5.2 million ostensibly for vehicles and generators allegedly delivered to the Reserve Bank. The signing by DR GIDEON GONO had the effect of obliging that such debts be paid by the Reserve Bank of Zimbabwe yet not all cars and generators were supplied whilst some of the cars actually went to destinations that were neither the Reserve Bank nor legitimate Government beneficiaries. The effect was, therefore, to defraud the Reserve Bank and hence the Public.
. ..to be continued. . .