Bank under probe
THE police’s Criminal Investigation Department (CID) Fraud Squad is
believed to be investigating allegations that Trust Bank Corporation
externalised at least £500 000 (about $1 billion at parallel market rates)
to off-shore accounts in Europe, The Daily News has established.
According to documents made available to this newspaper, Trust entered
into an arrangement with Bract Investments Limited, a company registered in
the United KIngdom, which deposited and transferred funds from its account
with HSBC Bank PLC in the United Kingdom to the local financial institution’
s accounts in Germany and the UK.
Funds were deposited into Trust Bank’s account with Commerz Bank in
Frankfurt, Germany, numbered 40088182300, and to the financial institution’s
UK account with National Westminster Bank, numbered 04594185.
The transactions, amounting to £500 000, took place between June last
year and March 2003.
An official with an agency representing Bract in Zimbabwe said the
deal between the UK company and Trust was supposed to enable Zimbabweans
living abroad to send money to their relatives back home.
The money would be deposited by Bract into Trust Bank’s off-shore
accounts in Germany and the UK, and the local financial institution would
then convert that money into Zimbabwean dollars at parallel market rates and
transfer it to the Bract agent in Zimbabwe.
“Trust Bank Corporation was paying the transferred amounts in
Zimbabwean dollars at rates varying from $1 800 to $2 400 for each pound,”
according to a letter written to the
CID Fraud Squad by Chibune and Associates, legal representatives for
Bract Investments Limited.
The Zimbabwean dollar: British pound rate was fixed at $1 300 in
February when the government devalued the local currency.
It was not clear why Bract had decided to bring the transaction to the
attention of the Zimbabwean police, but in their letter, dated 9 April 2003,
the UK company’s lawyers said they believed that the transactions
contravened sections of the country’s exchange control regulations.
“We are of the view that the above transactions contravened various
provisions of Part II and IV of the Exchange Control Regulations SI 109 of
1996 as well as some provisions of SI 110 of 1996 as apparently there was
externalisation of funds and dealing on the parallel market by Trust,” the
lawyers said.
“Our client is willing to avail themselves in Zimbabwe,” the letter
added.
The lawyers also provided documents detailing dates of transactions,
bank branch codes from which the funds were transferred and the amounts
involved.
Although police sources this week said the Fraud Squad had approached
Trust about the transactions, the head of the Fraud Squad in Harare, who
identified himself only as Assistant Commissioner Nyakochwe, yesterday
refused to comment.
He referred all questions to police spokesman Wayne Bvudzijena, who
too declined to comment.
Steve Chibune of Chibune and Associates also would not discuss the
issue, saying he could only do so after receiving instructions from his
client.
Chris Goromonzi, Trust Bank’s executive director, confirmed that there
was a dispute
involving his bank’s off-shore accounts, but would not provide
details.
However, a prominent lawyer in the banking sector, who spoke on
condition of anonymity, said if Trust Bank was found guilty of contravening
exchange controls, it could be suspended or fined to enable the country to
recover the money it had been prejudiced of.
He said the bank, one of Zimbabwe’s fastest growing financial
institutions, could also lose its licence for contravening sections of the
Banking Act.
Zimbabwe is facing a severe foreign currency crisis and the Reserve
Bank of Zimbabwe has taken a tough stance against companies externalising
hard cash. The central bank has warned banks against illegal foreign
currency trading, saying they could be fined or have their licenses