A SOUTH African law firm that acted as a conduit for information between a “whistleblower” and the Reserve Bank of Zimbabwe (RBZ) is instituting legal action against the c
entral bank for allegedly withholding its client’s payment after helping the police nab a high-profile businessman and political figure.
The law firm, Herman van Eeden based at 41 De Havilla Crescent at Persequor Technopark suburb in Pretoria, alleges that the RBZ is withholding more than $2 billion, about 10% of the estimated prejudice that the state suffered as a result of alleged fraudulent activities by the Chinhoyi-based tycoon who has since been arrested based on the information the law firm supplied to the bank.
Although it was not possible to obtain comment from Van Eeden, a senior partner in the law firm confirmed yesterday that lawyers were processing a legal suit against the RBZ for reneging on its promise to pay its client’s bounty. The senior partner who cannot be named for professional reasons, told the Zimbabwe Independent that the law firm acted as an “agent” in channelling information supplied by the whistleblower, who did not want to be identified.
“But they are now in breach of the contract and we are resorting to legal action to recover what is owed to us on behalf of our client,” the senior lawyer said.
Gono’s spokesman Fortune Chasi on Wednesday said he was not aware of any litigation or threats to sue the RBZ.
“We don’t operate on the basis of making promises we don’t fulfil,” Chasi said.
The Independent understands that the law firm handled information provided by the whistleblower on Cecil Muderede, a former Central Intelligence Organisation (CIO) operative, who is out on bail, jointly charged with Irvin Mereki and Terence Mutasa for externalising more than US$1,3 million and R700 000.
Muderede is also facing 21 counts of defrauding the Grain Marketing Board (GMB) of 7 915 metric tonnes of grain valued at more than $63 million at the time. The Independent understands that at the time of his arrest, Muderede had just bought a building and properties firm, Posso Brilhante Properties, from a South African businessman, Sergio Gomes. He had also bought a transport firm in South Africa called Nemini for which he had deposited R1,5 million. He had used 20 000 metric tonnes of maize as surety for the purchase of the transport company. He has since lost both firms after his arrest. Gomes, through his lawyers, Hauptfleisch Legal Firm, repossessed the transport company when Muderede defaulted on his monthly premium, a condition that was part of the Memorandum of Agreement.
Muderede now risks losing his Mabelreign-based transport company, CRCM situated at 3 Faber Road. The Zimbabwe Republic Police’s economic crimes unit has already impounded Muderede’s Ford vehicle, registration number PF2557-GP, as the investigations into his operations continue.
Police have also impounded a computer, which is understood to have been thoroughly frisked for any valuable information.
The Independent understands that when police searched Muderede’s Mabelreign transport company, they stumbled on information that implicated beleaguered Telecel chairman James Makamba in illegal foreign currency dealings, prompting his arrest. It is understood that police found documents showing money transfers done from Muderede’s Absa account to a Telecel account in Luxembourg.
Muderede would sell maize to a company in South Africa called Industrial Commodity Holdings owned by one Piet Greyling. The company would then resell the maize to the GMB. The GMB paid the company in foreign currency. To avoid detection, Muderede would transfer his money from his South African bank account to New York and then back to Zimbabwe under the name Oakleen Investments, Muderede’s investment vehicle.
The Independent understands that all this information was passed on to the head of investigations at the RBZ, one Retired Major Santu, who is understood to have since left the central bank.
The RBZ set up the Whistleblower’s Fund “to pay for quality information that assists in exposing violations of standing exchange control regulations”. The fund, in a monetary policy statement delivered in December 2003 by Gono, said payment to whistleblowers had been pegged at 10% of the recovered value and would be paid in foreign currency “for use as they see fit”.
Back then Gono said under-invoicing or transfer pricing at the shop floor, false forex loan repayments, deliberate or late acquittal of export earnings, collusion to over-invoice imports were among some of the “unethical behaviour and conduct which will earn whistleblowers some foreign exchange bonuses”.
A communication centre has since been set up in the RBZ for reporting illegal foreign currency dealings.