Zinara boss in $3m Infralink scam

HARARE - Zimbabwe National Roads Administration (Zinara) financial director Simon Taranhike has been suspended over a "currency trading scheme" at Infralink (Private) Limited (Infralink) – a joint venture firm with South Africa (SA)'s Group Five set up to manage the Plumtree-Mutare highway project.

Albert Mugabe, the roads manager's chairman, yesterday confirmed the development and said the relatively new purse man was sent away to pave way for investigations.

“There are some... procedures that are supposed to be followed when making payments and we have discovered some irregularities with regards to our payment systems, hence the decision to suspend Taranhike..,” he told the Daily News by telephone.

While Mugabe could not provide details about reasons for the suspension, it is understood that the Zinara chief financial officer was sent on forced leave Wednesday for unilaterally seeking to pay the Development Bank of Southern Africa (DBSA)'s arrears – believed to have shot to $17 million as at May – through third parties and which unofficial arrangements had netted the company over $3 million.

"We understand that Taranhike was suspended for orchestrating these currency swops of American dollars for rands. This is not only Illegal under Zimbabwean law, but it might be seen as blatant money laundering," said a source this week, adding the Reserve Bank of Zimbabwe had repeatedly pronounced itself that "such activities as three-tier pricings not only drained the economy, but devalued bond notes that are currently circulating in the market".

“And so, by allegedly instructing Infralink to pay premiums of 20 percent on the dollar and above the going black market rate of 15 to 16 percent for hard currency, Taranhike not only landed himself in trouble by resorting to these unsanctioned means or option, but wasn’t aware that they were using an agent who was already under the radar of authorities,” they added.

In one particular payment forming the basis of Infralink's troubles and flagged by the Central Bank in May, the DBSA received $300 000 worth of rand from a South African company called Solar Watt at the instruction of the Zinara subsidiary and in a development that risks sucking in at least two local banks, which have been processing the company’s payments.

And following a report on the suspicious transactions to John Mangudya's RBZ, further investigations have revealed that Infralink – also 30 percent owned by SA's Group Five – had already paid $2,5 million to $3 million using this "hot money" to DBSA over the past three months.

While sources have indicated that the regional lender might have been part to the dodgy cash transfers unwittingly, Taranhike was taking the stick for risking the organisation and their partners' reputation through these unauthorised transactions, and which were also carried out at inflated prices.

“I believe the DBSA was unaware of the settlement structure by Infralink in all these instances and, surely, the man at the centre of this mess or any other participants must be sanctioned to enable authorities to get to the bottom of this criminal conspiracy,” they said.

“What's also particularly worrying for the government is the signal – of this economic indiscipline by a state-owned enterprise – and its moral implications on the actions of private sector players. From another view, this whole fiasco also beggars the question about whether Jorum Gumbo’s ministry wasn’t quite aware about these issues.”

With Infralink being a major debtor of the DBSA after accessing a $206 million facility to upgrade the Plumtree-Mutare highway, the Zinara subsidiary has been struggling with its payments such that the 10 year-loan could now be extended by another 12 months.

Taranhike could not be reached for comment as his mobile was not reachable and did not respond to text messages sent to him 48 hours ago.

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