BY Desmond Chingarande GOKWE-NEMBUDZIYA legislator Justice Mayor Wadyajena (Zanu PF) who is accused of fraud and money laundering involving US$5,8 million together with his three co-accused were yesterday granted $200 000 bail each by Harare magistrate Stanford Mambanje.
Wadyajena and his alleged accomplices Cottco managing director Pious Manamike, marketing manager Maxmore Njanji, Fortunate Molai also of Cottco and Chiedza Danha, director for Pierpont Moncroix Mauritius were all ordered to deposit the money with the clerk of court.
As part of their bail conditions they were ordered to surrender surety of their properties, not to interfere with State witnesses, to report once every Friday at a police station near their place of residence and to surrender passports.
Manamike and Njanji surrendered their passports on their initial remand.
In granting them bail, Mambanje said bail was a constitutional right and that the accused should enjoy their liberty before trial.
He ruled that the investigating officer did not provide evidence in court when he said Wadyajena and other accused persons and some managers at Cottco Zimbabwe used to hold secret meetings.
He said the State did not provide substance when they alleged they would interfere with witnesses.
Allegations are that sometime in 2019, the accused persons acting in common purpose hatched a plan to defraud the Cotton Company of Zimbabwe [Cottco] of millions of United States of America dollars through fictitious purchase of goods purportedly for use by the company.
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In pursuit ofย their plan, on January 28 2019 they opened a shelf company Pierpont Moncroix (Pvt) Registration Number 898/2019 in which Danha and Euphrasia Mupedzisi were directors.
On March 14, 2019, Cottco raised an internal requisition for the supply of 3 200 000 special high carbon bale ties to cater for the 2019 ginning season.
The requisition was allegedly signed by Manamike and Njanji on the same date. A comparative schedule of suppliers for the supply of the bale ties was raised by Molai, where four companies namely Brown Engineering Group [Pvt] Ltd, submitted its quotation valued at US$2 005 416,17 dated January 21, 2019, Hebei Hanwu Cotton Machinery Co Ltd based in China quoted the same supplies at US$1 439 984, Burmetal Turkey submitted a quotation of US$1 307 881,77 and Pierpont Moncroix Mauritius quoted US$2 649 289,97.
A comparative schedule evaluating the four companies was done and Pierpont Moncroix Mauritius was recommended by Molai ahead of the other competitors to supply the bale ties at US$2 649 289,97 despite being the most expensive.
๐ด๐๐๐๐ ๐๐ ๐๐ ๐๐จ๐ซ ๐๐จ๐ค๐ฐ๐-๐๐๐ฆ๐๐ฎ๐๐ณ๐ข๐ฒ๐ ๐๐จ๐ง๐ฌ๐ญ๐ข๐ญ๐ฎ๐๐ง๐๐ฒ, ๐๐ฎ๐ฌ๐ญ๐ข๐๐ ๐๐๐ฒ๐จ๐ซ ๐๐๐๐ฒ๐๐ฃ๐๐ง๐ ๐๐ง๐ ๐๐๐๐จ๐ฆ๐ฉ๐ฅ๐ข๐๐๐ฌ ๐ ๐ซ๐๐ง๐ญ๐๐ $๐๐๐ ๐๐๐ ๐๐๐ข๐ฅ, ordered to surrender their passports and report to police once every Friday pic.twitter.com/81dcruIGPI
— NewsDay Zimbabwe (@NewsDayZimbabwe) August 18, 2022
It is alleged on March 14, 2019, Manamike acting in common purpose with his co-accused persons approved a fraudulent purchase order in favour of Pierpont Moncroix Mauritius valued at US$2 528 000 purporting that the firm was going to supply 3 200 000 bale ties to Cottco.
On March 15, 2019, Danha acting in connivance with the other co-accused persons sent an email to Molai and attached a purported tax invoice from Giant Equipment LLC, USA, invoicing the same bale ties that had been previously awarded for supply by Pierpont Moncroix Mauritius.
She further advised that payment be made to Giant Equipment LLC, USA.
Pursuant to their plan, on March 20 2019, Manamike who is a signatory to Cottco CBZ Bank foreign currency account, authorised a foreign telegraphic transfer of US$1 896 000 to Giant Equipment PLC, USA.
On the same date, US$1 896 000 was debited from Cottcoโs CBZ foreign currency account number 20156880042 and credited to Giant Equipment LLC, USA under reference 190320190TT0393.
The telegraphic transfer form describes the payment as 75% down payment of US$2 528 000 being the total invoice value for the bale ties, leaving a balance of US$632 000.
In terms of the Exchange Control Regulations, all foreign payments must be acquitted within 90 days, which meant that the 90 days in respect of payment to Giant Equipment LLC, USA was expiring in June 2019.
On June 18, 2019, Manamike and Njanji originated a letter to CBZ Bank head of exchange control at Pearl House, Harare, seeking extension of acquittal of payment made to Giant Equipment LLC, USA.
Attached to the letter to CBZ Bank was a purported letter from Giant Equipment LLC, USA confirming that 16 containers of bale ties were sailing to Beira with the first four expected to arrive on June 23, 2019, second batch by end of July 2019 and the last batch in September 2019.
The letter to CBZ Bank was counter-signed by Manamike and Njanji as authorised signatories and the payment that was made to Giant Equipment LLC.
Investigations established that no bale ties were imported into the country by Giant Equipment LLC, USA from the date of the transfer of the US$1 896 000 and the US$632 000 converted into Zimbabwean dollars, instead 25 Freightliner horse trucks were imported into Zimbabwe by Giant Equipment LLC, USA between 2019 and 2020 and the importer was cited as Mayor Logistics (Pvt] Ltd a company that is owned by Wadyajena and Mayor Logistics.
The 25 trucks have a combined invoice value of US$1 506 600. Further investigations established that all the trucks were registered under Mayor Logistics (Pvt) Ltd.
Further investigations established that Giant Equipment LLC, USA does not specialise in the supply of bale ties but is into the supply of trucks and earthmoving equipment.
To date, the payment to Giant Equipment LLC USA has not been acquitted since March 2019, and Cottco has been red-flagged by the central bank.
Onย November 11, 2019, Manamike and Njanji acting in concert with the other co-accused persons and in furtherance of their defrauding scheme allegedly approved a second purchase order to Giant Equipment LLC, USA valued at US$1 106 000.
In terms of the order, delivery lead time was stated as three months after a down payment of 40% and the balance before delivery. The purchase order was approved despite the fact that Giant Equipment LLC, USA had failed to deliver on the first order.
When the order was approved, Cottco had no money and the order was parked for nine months until August 31, 2020 when Manamike and Njanji approved processing of the order with payments made in three batches.
Instead of making a telegraphic transfer to Giant Equipment LLC, USA as per the order, payments were done in local currency to Afrozurich International Private Limited, a local bureau de change in a currency swap arrangement, where Cottco traded its Zimdollars for United States dollars.
In the arrangement, Cottco transferred $50 000 000, $36 305 200 and $39 805 200 from its various account numbers into Afrozurich International Private Limited CBZโs account number 02125554430012 in return for an equivalent value of US$1 106 000.
In October 2021, Molai acting in common purpose with her co-accused persons and in furtherance of their scheme forwarded an email to Memory Chivanga (who was acting treasurer at Cottco from May 2021 to January 2022) which she had previously sent to Chiedza Danha. In the attachments of the email was a signed purchase order No 124889 for bale ties dated October 19, 2021 to Prerpont Moncroix Mauritius amounting to US$4 578 078,50.
In her email, she requested that Cottco treasury advise on the payment of the deposit for the order. The deposit required was US$2 500 000.
No physical paperwork was received by Cottco treasury office and treasury was only able to raise US$750 000 as deposit which was paid through Cottcoโs CABS account number 1125257148 on November 15, 2021 to Energy Park (Pvt) CBZ account number 23738610171 on the instruction of the accused persons.
It is further alleged that on November 23, 2021, US$363 900 being part of transfer to CBZ Energy Park account of US$750 000 was later transferred to Maropafadzo Energy (Pvt) Ltdโs Ecobank account and US$421 000 was transferred to Energy Park Bulk Fuels (Pvt) Ltd the following day.
Investigations established that Energy Park [Pvt] Ltd is in the fuel industry and sells fuel in bulk and direct to retailers and not bale ties.
On March 8 and 14, 2022, two further payments were processed from Cottcoโs CABS account number 1125257148 of US$450 000 to Maropafadzo Energy (Pvt) Ltd CBZ Bank account number 02925639340021 and US$1 000 000 to the same companyโs Ecobank account number 5783600043224 respectively as requested by the supplier. A total of US$2 200 000 was paid against the order of US$4 578 078,50.
Payments to Maropafadzo Energy (Pvt) Ltd being part of the order for bale ties were further transferred into various accounts of individuals and corporates both local and international for procurement of services which have nothing to do with the purpose for which the funds were transferred for at Cottco. No bale ties were imported from Pierpont Mauritius (Pvt) Ltd.
The State alleges Cottco was prejudiced US$5,8 million and nothing was recovered.
The accused persons are also facing money-laundering charges after they went on buying spree using Cottco funds.
