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Informed government and banking sources told the Independent this week the minister is under fire from his bosses for receiving the cash amounts he is struggling to convincingly account for.
Undenge is said to be seeking refuge in Zanu PF, claiming he was a mere conduit for the ruling party’s funds even if he is not the treasurer as he battles to wriggle out.
A senior commercial banking executive told the Independent that on January 15 this year, Letina received a US$136 000 payment, while US$50 000 was deposited into Undenge’s Standard Charted Bank account on February 3. The US$136 000 to his wife was deposited into her Standard Chartered Bank account, although it ended up in an Old Mutual unit trust.
Unit trusts are funds that use collective money invested by many clients to purchase shares and other investments on behalf of customers. Old Mutual unit trusts offer a variety of options to help clients achieve their financial objectives, be they high returns or wealth preservation.
Apparently, the US$136 000 was in the money market fund which protects the capital and earns monthly interest. It invests in short-term interest-bearing securities. Interest accrues on the daily account balance and is paid at the end of each month.
Bank executives said this week after the suspicious payments to Undenge and his wife in January and February the Reserve Bank of Zimbabwe (RBZ)’s Financial Intelligence Unit (FIU), which combats illicit financial flows, money-laundering and financing of terrorism, moved in to investigate the minister. The investigation came after an official report was made to the RBZ.
Central bank government John Mangudya was unavailable for comment yesterday. He did not respond to calls and messages.
One bank official said: “A report on Undenge’s suspicious deposits was made to the RBZ in February. The FIU subsequently instituted investigations into the issue and gathered all the relevant details before confronting the minister.
“When asked to explain the deposits, Undenge claimed the money was for ‘the party’, although he did not provide evidence it was going to Zanu PF coffers. The cash was in his personal account and his wife’s Old Mutual unit trust investment portfolio.”
Efforts to get comment from Old Mutual and Standard Chartered were fruitless.
Sources said although the FIU was not convinced by Undenge’s explanation, they now await orders from their superiors on how to proceed.
“The minister’s explanation lacks plausible deniability; his claim the money was going to Zanu PF is unconvincing,” one bank official said. “It was his money, but the problem is that it’s a suspicious transaction, hence we raised the red flag.”
The issue has raised questions over the source of the money as Undenge has been financially struggling and even unable to pay US$350 maintenance for his teenage daughter. As recent as December last year, he lost his High Court bid to have the maintenance claim overturned, saying his daughter was now over 18, thus no longer legally entitled to his support.
Justice Mwayera however ruled that although the daughter was 18, she was still entitled to Undenge’s support to fund her university studies until the age of 35 in terms of section 20 of the constitution.
These disclosures come at a time Undenge is in the eye of a storm for unprocedurally facilitating about US$5 million payment to controversial businessman and ex-convict Wicknell Chivayo for the 100-megawatt Gwanda solar power project, worth US$200 million, which is yet to take off.
Undenge reportedly pressured the Zimbabwe Power Company (ZPC), a Zimbabwe Electricity Supply Authority (Zesa) subsidiary, to pay Chivayo US$5 million in the absence of a bank guarantee to protect public funds.
The minister is also accused of ordering Zesa to hire Fruitful Communications, a firm linked to Zanu PF Highfield West MP Psychology Maziwisa and former ZBC anchorman Oscar Pambuka, to carry out a media campaign despite the company having an internal public relations department.
As reported by the Independent last week, Undenge neglected or ignored technical expert advice that the US$194 million-a-year Dema diesel power plant deal would leave the struggling ZPC and Zimbabwe Electricity Transmission and Distribution Company (ZETDC), another Zesa subsidiary, in deeper dire straits.
The corrupt deal, given to President Robert Mugabe’s in-law Derick Chikore, elder brother to Simba who is married to the president’s daughter Bona, and Sakunda Energy boss Kuda Tagwirei, was later revised down by about 50% to US$83 million due to pressure. Monthly payments have gone down from US$16 million to nearly US$8 million. The minister also inherited dubious deals in which the country’s energy projects were given to shady businessmen with criminal records, ranging from fraud to drug trafficking.
Some of ZPC’s multi-million dollar tenders include Munyati solar (awarded to ZTE Corporation), Insukamini in Bulawayo (17 Metallurgical China) and Mutare peaking power (Helcraw).
Tenders were also awarded for the 300MW Kariba South extension, 600MW Hwange 7 and 8 extension (Sino Hydro), 30MW Gairezi hydro (Intratrek, BHL India, Angelique) and repowering of Bulawayo (17 Metallurgical), Munyati (Intratrek, Jaguar Overseas Limited) and Harare stations (Jaguar).
Some of the companies which initially lost the tenders ended up involved in projects. The deals were inflated by more than US$500 million, raising suspicions that Zesa managers and senior government officials, including ministers, were corruptly benefitting from the shady contracts.
An internal Zesa audit report seen by the Independent also shows ZETDC was prejudiced of over US$200 000 between February 2011 and March 2015, through unprocedural overtime payments in its Harare region offices.
Undenge last month claimed the power tenders were above board, but later made an about turn, saying he had nothing to do with it. He is now effectively blaming Zesa chief executive officer Josh Chifamba and ZPC managing director Noah Gwariro for the scandals.
Source-Independent
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