Zimbabwe: Gideon Gono's criminal and corrupt deeds out in the open

On the 25th of May 2009, Mugabe said this defending Gideon Gono's stay as the Reserve Bank of Zimbabwe governor, " He is not a thief, he has done no wrong. Prove the wrong he has done, that's the crime he is alleged to have committed -- that he stood by this man Robert Mugabe, who must collapse so that there is regime change."
On the 31st of May 2009, soon after that myopic and paranoid outburst by Mugabe, Gilbert Muponda who used to own the company ENG CAPITAL in Zimbabwe and made numerous headlines in Zimbabwe during the years 2003 and 2004 when Gideon Gono (who had just been appointed RBZ governor)was accusing him of sabotaging Zimbabwe's economy, at long last decided to speak out and let us know his side of the story. He wrote a letter to Mugabe telling him of Gideon Gono's criminal and corrupt deeds concerning ENG CAPITAL Z$35billion worth of shares that Gideon Gono grabbed for himself for only
Z$2,9billion thereby prejudicing ENG CAPITAL creditors, investors and contributories of at least Z$32,1 billion back then in 2004 when a billion Zimbabwean dollars was equivalent to millions of US dollars. You can read for yourself the letter that Gilbert Muponda wrote to Mugabe on the URL link below.
http://www.kubatana.net/html/archive/opin/090531gm.asp?sector=ECON&year=0&range_start=1

After reading through it I came to the conclusion that Gideon Gono started sabotaging the Zimbabwean economy right from day one when he was appointed governor of RBZ. To quote Gilbert Muponda's own words which are very true, "Using the Anti-Graft mantra RBZ Governor Gideon Gono devised an unjust self enrichment scheme targeting business leaders, arresting, harassing, intimidating, exiling and black mailing Zimbabwean entrepreneurs whose businesses were causing an economic growth in Zimbabwe." If that is not sabotaging Zimbabwe's economy, then what is? ENG CAPITAL was doing well, it had a market value of US$ 175 million, just before Gono descended on it with his economic sabotaging fangs and liquidated it. Gilbert Muponda explained clearly what he meant by Gideon Gono's unjust self-enrichment schemes, for those of you who are lazy to go to the URL I provided let me copy and paste for you what he said.

I will briefly describe for you one specific example about what I mean by unjust self-enrichment schemes .I am sure you were told that ENG CAPITAL had many cars, and these cars were the only assets that ENG had. The correct and accurate facts are that ENG was a Group of Companies, which Companies had Directors, Managers and employees and the cars were for the use of these members of staff who ran the various companies which made up ENG CAPITAL.

Below is a brief ENG Group Structure:

ENG HOLDINGS GROUP STRUCTURE

- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE

ADDITIONAL MAJOR ASSETS OWNED:

- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services ? (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 25 % Zimbabwe News Papers Group - Zimpapers Limited
- Allied Conveyor Belts PVT LTD
- River Drilling PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares

ENG Group was liquidated and managed to repay its creditors.

ENG assets above included a parcel of more than 600 million Century Financial Holdings ( Now CFX BANK) of these 600 million we were able to track 309 Million Shares sold to Network Investments and Kwangwari Enterprises which are investment vehicles in which Gono reportedly has interests. The 309 Century Financial Holdings Limited Million shares in question were sold through Fidelity Stock brokers on or around May 13, 2004. Within the same week an announcement was then made that CFX Bank was taking over Century Holdings. The shares were sold to Gono’s reported consortium for Z$2,9 billion when ENG had spent $35 billion to accumulate the shares, thereby prejudicing ENG, Creditors, Investors and contributories of at least Z$32,1 billion.

As ENG contributory and shareholder, I wrote to the Zimbabwe Stock Exchange Chief Executive Mr Emmanuel Munyukwi asking for an investigation because we had agreed with the majority of creditors that the shares should not be sold but rather swapped with creditors and investors instead of selling them at an unreasonable price. But the 309 Century /CFX Financial Holdings million shares were somehow clandestinely sold and that transaction enabled CFX Bank to take over Century Holdings Limited.

This allowed the reverse listing of CFX Bank on to the Zimbabwe Stock Exchange. Without those 309 Century Holdings Limited million shares owned by ENG the CFX/Century merger would have never happened. Gono and his proxies became the new controlling shareholder of the new merged bank. Is this by design or accident, Gono then forced out the Mr Sean Maloney who had helped to put together the transaction. Mr Sean Maloney had to leave the country under unclear circumstances. Part of the same shares snatched From ENG were later transferred to Premier Bank Financial Holdings which is reportedly owned by Governor Gono.

ENG directors and contributories asked the high court to set aside the sale of the shares and the matter action is still before the courts in Harare. We asked Zimbabwe Stock Exchange Committee to investigate. They refused. We asked the brokers for the identity of the buyer of our shares. They refused. The brokers indicated they were under serious pressure from individuals they couldn’t identify to maintain total secrecy on the identity of the buyer. Within a few days of raising the challenge of the CFX/Century shares Justice Minister Patrick Chinamasa specified me without affording me a hearing or an enquiry as required by the Constitution of Zimbabwe. The was specification at the instigation of Governor Gono .The specification was meant to harass, cow, intimidate and silence me from raising further complaint and challenges regarding ENG assets specifically these 309 million shares in CFX Financial Holdings.

Since the ENG shares in Century /CFX Bank Financial Holdings were irregularly transferred the Bank ownership remains in dispute. The ENG shareholders and contributories filed and sought a high court order to stop the transfer of the shares until the dispute had been resolved. The shares were still clandestinely transferred despite the pending high court application to resolve the dispute. After filing for this order My Lawyer the late Oscar Ziweni was also specified by the Minister of Justice and threatened, harassed and intimidated until he went into hiding. However the point remains ENG shareholders and contributories still lay claim to these shares and stake in Century/ CFX BANK which were looted by Governor Gono.

A few individuals directly involved in the illegal sale of the ENG shares in Century later confessed that the beneficiary of the transaction was Governor Gono. Cde President the description of the actions above constitutes unacceptable behavior by the Governor of the Reserve Bank. The transactions clearly show corrupt behaviour which when repeated at a massive scale as done by Governor Gono can bring down a country’s Economy. This is a significant part of what killed Zimbabwe’s Economy. I am sure other business people will have their stories to tell and many will have common features with what I have described above. This will be difficult to prove without a forensic audit of Independent Commission of Enquiry. And this will only be possible if Governor Gono is gracefully asked to recuse himself or go on paid leave whilst this is done. As a scholar of modern corporate Governance practices I believe the Governor will find this acceptable.

As you may probably recall Barbican Bank, Trust Bank and Royal Bank experienced a liquidity crisis similar to what Century /CFX Bank experienced during the same period. Barbican Bank, Trust Bank and Royal bank were then taken over and amalgamated to form Zimbabwe Amalgamated Bank (ZABG). Even though Century /CFX Bank faced the same situation it was not merged into ZABG. The reason was that Governor Gono was now the new controlling Shareholder and he was protecting his self-interests. Century /CFX Bank was placed into temporary curatorship only to reopen a few months with RBZ pumping huge amounts of money to protect Governor Gono’s new investment?. Your Excellency this is corruption. This is how the country goes down the drain.

ENG CAPITAL is not the only company that Gideon Gono targeted in his self-enrichment schemes during that time, the list of victimised business people is very long and as I read through the last section of Gilbert Muponda's letter I couldn't help but cry. This is the first time I have cried because of some issue other than the pains of love so my crying about it is worth writing about. I cried because I felt angry with myself and the rest of the Zimbabwean population for believing what the Gono-controlled media in Zimbabwe was saying about ENG CAPITAL and cheering on Gideon Gono back then in 2003 and 2004 while he harassed our fellow Zimbabwean business people whose positive contribution to the Zimbabwean economy was actually making the effect of the ZIDERA bill sanctions unnoticeable. If all those Zimbabwean business people that Gideon Gono harassed and caused to flee their businesses as well as flee the country had continued doing business in Zimbabwe I am very sure that the Zimbabwean economy would never have become so tattered and torn. The lesson learnt is never believe what the media says unless you know the true facts of the story and never believe one side of the story. I have copy and pasted the part of Gilbert Muponda's letter that made me cry with the hope that you too will realise what fools Gideon Gono made us and cry along with me.

The list of victimized businesspeople is rather long but it includes such luminaries as Dr Makoni, Mutumwa Mawere, James Mushore, Emmanuel Fundira, Otto Chekeche, Godfrey Jowa, Norman Sachikonye, Victor Chando, Durajadi Simba, Jeffrey Muzwimbi, William Nyemba, Nicholas Vingirai, Mthuli Ncube, Francis Zimuto , James Makamba, David Butau, Minister Chris Kuruneri, Nyevero Hlupo, Chris Goromonzi,John Moxon and many more. Mr President all these men above are true patriots who chose to set up businesses in their own country instead of neighbouring countries where they had similar opportunities and incentives. Is this normal to see a whole generation of entrepreneurs scandalized and lose all credibility and all at the same time all based on accusations raised and directed by one man? A lot of these individuals have been forced to settle in other countries where they are working, creating jobs and help build neighbouring economies whilst Zimbabwe is in desperate need for such skills and services.

This list includes some of the most gifted Bankers and Business people of our lifetime. It includes The Founders of the first Indigenous Merchant Bank, It Includes the founders of the first Discount House, It includes the first Black Entrepreneurs to form and list their own Financial Institution in Zimbabwe. All these men Your Excellency have been haunted out of the country, embarrassed and disgraced due to the vindictiveness of Governor Gono as he pursued long discredited economic policies. When such experienced and skilled business people are haunted out of their businesses and out of the country the impact is long term. Factories close, production is reduced, shortages become widespread and prices keep rising till hyper inflation becomes order of the day.

During the 1980s and 1990s the Government ran the much-vaunted Education for All campaign. That campaign produced millions of graduates. Including me. It is sad today that a majority of those products are today working and serving other nations whilst Zimbabwe is in desperate need of their skills and services. More than 80% of my former classmates at National University of Science and Technology are now based outside Zimbabwe.

Cde President other countries protect and support their business people and entrepreneurs. They give them incentives to remain, stay and be based in their country of birth. In the USA there are individuals like Warren Buffet, Steve Jobs, Bill Gates and many others. They live in America and if they were to re-locate else where I am certain the American Government will do everything it can to re-attract them. They do this because they know Entrepreneurs create jobs, provide services and make the economy prosper. In 2006 The richest Chinese man was the then 37 year old Wong Kwong Yu of Gome Appliances. Wong Kwong Yu has an estimated $2.3 billion US dollars in assets according to the Forbes business magazine. China has 108 other billionaires. And they all live in and operate from China. These are some of the people who have helped China become such an Economic powerhouse. The world over its rare for any country to be developed by foreigners in the absence of a vibrant local entrepreneurial community. Whilst Zimbabwe may look east its also important that it looks inside for its own business people and entrepreneurs. Under the direction of Governor Gono Zimbabwe lost too many talented individuals who are needed to revive the economy. It is therefore imperative that the RBZ be reformed and Governor Gono be re-deployed away from the Central Bank which must play.

The Media and those close to you tried to create impressions that ENG was brief case company premised on Financial Engineering and Financial gymnastics and creating money from thin air without real economic activity. This is false. I will clarify this by bringing to your attention 2 companies, which were part of the ENG Capital Group. ENG included River Drilling PVT LTD specialized in locating under ground rivers and water bodies. Its main activity was to locate such water bodies and bore hole drilling through out the country. This included drilling boreholes for schools and rural district councils. Allied Conveyor Belts was involved in manufacturing, servicing and installation of conveyor belts and elevators. At the time of ENG’s closure the Company was in the process of negotiating the refurbishment of all the Conveyor belts and systems at Hwange Colliery Company Limited. In addition it was finalizing an conveyor belt system export order worth US $ 2.8 million from an Angolan firm. It is clear a misleading impression was created that ENG specialized in cars or non-economic activities and these businesses I am highlighting were ignored and downplayed to try and create justification for the closure of ENG CAPITAL whilst ENG assets were stripped and looted as earlier described above.

I hope the above will give an indication of why the RBZ must be reformed and during that reform individuals like Governor Gono must gracefully be retired or redeployed. The above case about the ENG shares in Century / CFX Financial Holdings show how corrupt the Governor is. Your Excellency your reputation and legacy is on the line. Cde President you cannot be seen to be defending and protecting a corrupt man like Governor Gono. I am sure other cases of his corrupt behaviour will be brought to your attention since you have asked people to show you the Governor’s criminal and corrupt deeds.

After reading through this economic sabotage by Gideon Gono and remembering how around the same years, 2003 and 2004, Jonathan Moyo and Patrick Chinamasa drafted the POSA and AIPPA bills which consolidated no rule of law in Zimbabwe that the ZIDERA bill of 2001 had quoted as the reason for economic sanctions towards Zimbabwe, would I be wrong in suspecting that these three men are probably working as economic terrorists in their own countries. Excuse me if I am wrong, my thoughts must be a result of reading too many Robert Ludlum espionage novels.