Africa

Minister fingered in Air Zim scandal

Kudzai Mashininga

A letter signed by then transport minister Nicholas Goche appears to have authorised underhand dealings.

High-flyer: Air Zimbabwe lost millions of dollars in insurance fraud during the time Nicholas Goche  was the minister in charge of overseeing the parastatal. (Alexander Joe/AFP)

Cabinet Minister Nicholas Goche has been sucked into the Air Zimbabwe scandal in which top management has been accused of defrauding the airline of nearly $20-million in an insurance scam.

A letter submitted to an Air Zimbabwe internal disciplinary hearing shows that Goche authorised the contentious transactions in April 2009 when he was the minister of transport and infrastructure development. He is now minister of public service, labour and social welfare.

The airline has been rocked by the scandal that resulted from its appointment of Navistar Insurance Brokers in 2009 to handle the insurance of its planes. Disciplinary ­hearings against senior managers are in progress.

The insurance transactions are said to have violated the airline's tender regulations. There are claims of premiums being "fraudulently" overcharged by €5.1-million over a four-year period.

The letter signed by Goche and addressed to the then group chief executive Peter Chikumba is dated April 3 2009 and is on the transport ministry's letterhead.

It reads, in part: "Further to the letter from the permanent secretary for transport and infrastructure development dated March 25 2009 authorising Air Zimbabwe to make payment for the above through Colemont Insurance Brokers, this letter serves to authorise Air Zimbabwe to make placement of the necessary insurances directly on to the international market. Subsequent thereto, the necessary waivers in respect of this unavoidable administrative action shall be secured."

Boards fired
This week, Transport Minister Obert Mpofu fired all the boards under his ministry for nonperformance. This included the Air Zimbabwe board led by Ozias Bvute.

Contacted for comment, Goche promised to meet the Mail & Guardian but had not done so by the time of going to print.

"I am driving to Nyanga and I will come back tomorrow night and we have to sit down and talk," he said. "There are a lot of things concerning Air Zimbabwe. There were issues to do with fuel, insurance ... a lot of things so that they [Air Zimbabwe] could fly. We can't treat things in isolation. We have to sit down and talk."

The Air Zimbabwe internal disciplinary hearing has not summoned Goche.

A forensic audit report prepared by BCA Forensic Auditors concluded that senior managers at the airline had taken part in the looting of ­millions of dollars through the insurance scam.

Those fingered are group chief executive Innocent Mavhunga and acting managing director Grace Pfumbidzayi, who have both been suspended.

Internal disciplinary hearing
Other senior managers who may be called to appear before the internal disciplinary hearing are Nicholas Munjeri, the general manager for finance, Cephas Tarenyika, the general manager of technical services, and passenger manager Moses Mapanda.

The hearing is being chaired by Harare lawyer Wellington Pasipanodya, a partner at Manase and Manase Partners. A possible conflict of interest may arise as Wilson Manase of the law firm sits on the Metbank board together with the airline's chairperson, Ozais Bvute.

Manase's younger brother, Arthur Manase, is also a previous legal and corporate affairs manager at the airline.

The disciplinary hearing has found Pfumbidzayi guilty of the offences that are said to have been committed while she was company secretary, saying she was responsible for the insurance portfolio.

She is said to have been responsible for drafting and reviewing contracts and other related documents.

Pfumbidzayi was arrested on Thursday on fraud charges. Former chief executive Chikumba, who left the airline in 2011, has been questioned by the auditors but has not appeared before the disciplinary committee.

Flying without insurance
Documents submitted to the tribunal said Pfumbidzayi committed fraud by authorising payment of a fraudulent invoice valued at $142 300.

She was also alleged to have authorised a transaction for $1-million between November 2011 and April 3 2012 for two A320 Airbuses — a period during which the auditors found that the aircraft had not yet been purchased.

The auditors said at one time Air Zimbabwe airlines flew for two months without insurance after local insurer ZimRe had defaulted payments to Willis UK, a global insurer.

At that time, ZimRe had been placed under European Union sanctions but was said to have continued to collect premiums from Air Zimbabwe without remitting them to Willis UK.

The audit report alleged that Pfumbidzayi irregularly awarded an insurance contract to Navistar Insurance Brokers and failed to ensure that the payments Air Zimbabwe made were correct.

Pfumbidzayi pleaded that the insurance contracts were awarded with full knowledge of the chief executive and the board.

Among others allegations, Navistar was said to have "fraudulently" overcharged insurance premiums by €5.1-million between April 2009 and April 2013 and failed to remit $205 000 for damages to aircraft hangars between April 2009 and March 2010.

Air Zimbabwe was also said to have paid $360 000 as premiums for two A320 aircraft that had already been insured.

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