FORMER Hwange Colliery Company (HCC) managing director Fred Moyo has been arrested on allegations of defrauding a local mining firm of $2,7 million, it has been learnt.
Moyo, who was arrested on Monday, allegedly signed an agreement sometime in April 2011 with shareholders of the Midlands-based gold miner, OX Mining, to take over the company upon full payment of a purchase price of $2,5 million.
Police spokesperson Assistant Commissioner Charity Charamba last night confirmed the arrest.
“He was arrested on Monday over fraud charges and is going to court tomorrow (today). I cannot give you further details,” she said.
The former HCC boss reportedly managed to pay only $850 000, contravening the purchase agreement which required full payment of the purchase price by end of June 2011, thereby making the sale null and void.
However, Moyo is alleged to have fraudulently secured a
$2 million loan from ZB Bank using OX Mining’s assets as security despite the fact that he was neither a director nor shareholder of the firm.
He is said to have later also secured $700 000 from Stanbic Bank using the miner’s assets to secure borrowing.
The move has prejudiced OX Mining owners Ox Drilling, Dirk Benade, and Sydney Steyn, who have a $2,7 million debt which is not of their doing.
According to information gathered by NewsDay, Moyo is currently seeking to sell 25% of the mine at $10 million.
Moyo”s lawyers GN Mlotshwa and Company could not be reached for comment at the time of going to print.
Moyo left HCC after the expiry of his five-year contract mid last year.