11 April 2014

Zimbabwe: How Intelligence Organisation Siphoned U.S $70 Million Loan Facility

FURTHER details have emerged on how the shadowy CIO squandered US$70 million provided by the Chinese government through state-controlled financial institutions following hints on the issue by deputy foreign Affairs minister Chris Mutsvangwa last week.

Enquiries by the Zimbabwe Independent this week showed the Chinese government gave the CIO US$70 million for shady joint ventures, but the money was siphoned through fraudulent means via bogus front companies, including Farmers' World formed in order to access loans.

In an interview this week with the Independent, Mutsvangwa said joint ventures were formed with the CIO in order to get government to guarantee the loans.

Mutsvangwa said Farmers' World, a joint venture between the Chinese and CIO, failed to repay a loan to a Chinese state-controlled bank. "So they thought by using the CIOs in a joint venture they would get government as a guarantor and in so doing, they first got US$30 million and another US$40 million," Mutsvangwa said. "Such loans under-performed, but the Chinese bank now has no way of recovery besides placing the loan in the books of government."

This comes after reports by Global Witness last year CIO was given US$100 million for its operations ahead of the controversial 2013 elections. While this could not be independently verified, the CIO has not publicly confirmed or denied the report.

According to Global Witness, the CIO "appears to have received off-budget financing from Sam Pa, a businessman based in Hong Kong".

It is said reliable sources showed how Sam Pa appears to have provided a significant sum of money, said by one intelligence document to be US$100 million, to the CIO. Global Witness also said Sam Pa provided 200 Nissan pick-up trucks to the CIO in return for diamonds and accessed business opportunities in the cotton and property development sectors.

In 2013 former Finance minister Tendai Biti said Treasury paid close to US$76,5 million in external loan repayments and the bulk of it went to China, with that of Farmers' World also involved.

Prior to last year's elections, MDC-T leader Morgan Tsvangirai claimed CIO were running two operations codenamed "Operation Blackhawk" and "Operation Spider-web" financed to the tune of US$100 million in a bid to prevent him from winning the polls.

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