NewsSouthern AfricaMugabe deputy sucked into $350 million graft storm


Posted on Tuesday, 21 June 2016 12:43

Mugabe deputy sucked into $350 million graft storm

By Janet Shoko

Photo©Victor R. Caivano AP/SIPAOne of Zimbabwe President Robert Mugabe's deputies has been accused of trying to influence the country's power utility to get an expensive $350 million loan from a Botswana-based finance company without following proper procedures.

According to media reports, Mugabe recently blocked Vice-President Phelekezela Mphoko from facilitating the deal between the Zimbabwe Electricity Supply Authority (Zesa) and Botswana's Capital Management Africa (CMA) after concerns were raised about his son's involvement and the flouting of procedures.

Mugabe rejected the loan deal

If the deal had been approved, CMA would have given Zesa the money at 20 percent interest an annum and the cash would have been used as a guarantee for a $1,2 billion loan from the China Exim Bank. The Chinese bank offered the loan for the refurbishment of Zesa's Hwange Thermal Power Station.

Mphoko reportedly tried to influence Zesa to get the expensive loan from CMA because his son had a five percent stake in the Botswana-based company.

One of the conditions of the loan was that the repayment of the loan would be done through an offshore account belonging to Mphoko's son and registered in Mauritius. Mugabe reportedly blocked the deal because it was considered to be suspicions.

"Mugabe rejected the loan deal," the privately owned Zimbabwe Independent newspaper qouted a senior government official saying. "He warned him (Mphoko) not to be involved in Zesa affairs, effectively blocking the arrangement".

Mphoko is Zimbabwe's former ambassador to Botswana. His family has shares in the Botswana Stock Exchange listed Choppies, which has several stores in Zimbabwe. He is one of Zimbabwe's two vice-presidents.

Zesa has been rocked by several scandals in the past few months involving millions of dollars.

In one of the deals, Energy minister Samuel Undenge is accused of using his influence to force Zesa to award a tender for an emergency power station to Mugabe's in-law. The deal would see Zesa producing expensive electricity and the cost would be passed on to consumers through tariff reviews.

Undenge has been accused of forcing Zesa to pay convicted fraudster Wicknel Chivayo's Intratrek $5 million without a bank guarantee for a solar project worth $200 million that is yet to take-off.

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