A TOTAL of US$100 million was initially at stake in the controversial diamond mining deal which has angered President Robert Mugabe who this week took an unprecedented step to publicly accuse former Zimbabwe Mining Development Corporation (ZMDC) chairperson Godwills Masimirembwa of demanding and receiving about US$6 million bribe, it emerged yesterday.
This came as the scandal deepened amid conflicting narratives by those close to Masimirembwa and William Ato Essien, the Ghanaian tycoon at the centre of bribery allegations.
Sources close to Masimirembwa say the money received by the diamond company Gye Nyame Resources, a public-private partnership initially between state-owned ZMDC and Bill Minerals of Ghana, was a "commitment fee" which eventually went into operations, not a bribe.
However, Essien last night told the Zimbabwe Independent from Ghana he brought in US$5,9 million in 2011 in cash and the money was taken by Masimirembwa. Gye Nyame chairperson Manson Mnaba confirmed Essien brought the money although he does not know whether Masimirembwa took it. Mugabe said on Tuesday the ex-ZMDC chairperson got the money. The case is now under police investigation.
When the deal was initially brokered, it was supposed to be worth US$100 million.
Gye Nyame was initially a joint venture between the ZMDC and Bill Minerals before the shareholding structure changed. The new structure comprises ZMDC, which has 50%, Zimbabwe Republic Police Trust (20%), Essien (24%), and Dantor (6%), a company representing the interests of local shareholders, Itai Munyeza and Blessmore Chanakira.
Essien was originally involved in another business venture, First Capital Plus Zimbabwe, a micro-finance institution, where he had 49% together with Munyeza and Chankira who controlled 51%. Itai, First Capital Plus Zimbabwe CEO, is African Sun CEO Shingi Munyeza's young brother. Blessmore is a distant relative of Kingdom Bank founder Nigel Chanakira.
Asked about his involvement in the deal, Itai yesterday denied any knowledge of the corruption case, referring all questions to Masimirembwa and Essien. "I am not involved in the issue," he said. "This is about the two of them."
Essien told the Independent from Ghana last night he had given Mugabe all the documentation and evidence showing his US$5,9 million was taken by Masimirembwa.
Ex-ZMDC chairman Godwills Masimirembwa
"I have submitted all relevant documents to the head of state and at an appropriate time I will be able to give you a comment," he said without providing details. Asked about the US$100 million initial capital which was supposed to be raised, Essien said: "The initial arrangement was we were to invest US$23 million into the country; we have documentation and bank statements to show that. Like I indicated, the US$5 915 000 we paid went into the pockets of the ex-chairman of the ZMDC, that is the executive content that I can give to you."
Essien was supposed to pay in total US$23 million for his 24% stake in the US$100 million deal. ZMDC and the police trust equities were to be secured through mineral rights, while Dantor was going to borrow locally to fund its shareholding.
Gye Nyame later applied for US$10 from two local banks to fund its activities and it brought equipment worth US$4,5 million.
But sources close to Masimirembwa insist Essien's US$5,9 million contribution, which they claim was "commitment fee", went into the first phase of developing the mine.
However, Essien said: "The issue of commitment fee is always known as commitment fee. This would mean that you can have access to the money and use it for the project but this was not the case, so it can never be a commitment fee.
"A commitment fee will always bear some sort of a receipt but this is not that ... So it cannot be commitment fee because I did not get access to it to utilise for the project -- that is why it cannot be referred to as commitment fees."
Mugabe said after he paid his money in cash to Masimirembwa, Essien initially could not come to Zimbabwe to finalise business arrangements because the ex-ZMDC chairman told him he would be arrested without clarifying why.
Investigations show that Essien believed he could possibly be arrested because of the experiences of his business partner is Kingsley Attah Ghansah who was last year detained and sentenced to a five-year jail term before he was acquitted on appeal for possessing more than 7kg of gold.
Asked if it was true Ghansah was his business partner, Essien said: "Correct, but as we speak now the evidence of the gold has still not been returned to him. As you know when you are acquitted and discharged in such a case you are supposed to get back your goods. So that is where it stands now."
After meeting ex-Mines minister Obert Mpofu in Washington DC and later again in Bulawayo, now in the presence of Police Commissioner-General Augustine Chihuri, Essien consolidated his case as Masimirembwa allegedly failed to explain his threats that the Ghanaian would be arrested if he came to Zimbabwe.
Investigations show Essien had been given a free rein which saw him appointing his own people to head management and operations at the mine. Other sources said Munyeza and Chanakira were the initial sponsors of the project until six months ago when Gye Nyame executives wrote a letter to local banks advising them that the duo was no longer involved with the company.
It is understood before Munyeza and Chanakira were eased out of the company, they had been instrumental in setting up operations and had been approaching banks to get funding for the project which a survey by SRK Global claims has a concession valued at US$10 billion.
Sources say Mugabe's threats against Masimirembwa and others triggered serious panic among those who were involved in the Marange diamond fields where so many have been tainted by corruption activities.
One of the mining companies, Canadile Mining was in 2010 forced to shut down amid allegations of corruption. Its director Lovemore Kurotwi's case is still in the courts. Canadile executives were arrested over a botched US$2 billion investment.
Mpofu was accused of soliciting a US$10 million bribe, a charge he denied. Kurotwi and 11 others involved in Canadile, who included Robert van der Merwe, Yehuda Licht, Anorld Neil Lange, Subithry Naidoo, Kuberin Packrisamy, Marco Chiotti, Minesh Bungwadeen, Viken Arslanian, Komalin Packirisamy, Vejayanakumar Pickirisamy and Allan John Sawyer, were blacklisted after the company was kicked out of Chiadzwa.