print logo

Diamond firm ACR charged with fraud over Chiadzwa claim

 SW Radio Africa 15 November 2019

The London listed diamond firm in the middle of a legal battle for ownership of the controversial Chiadzwa alluvial diamond site, has been charged with fraud, as the government strengthens its claim of the area. (1164 Words) - By Alex Bell

Share

African Consolidated Resources (ACR) said on Monday it faces allegations of unlawfully acquiring diamond claims at Chiadzwa by using subsidiary companies that were unregistered at the time, a process the authorities considered fraudulent.

"ACR has been legally advised that this should make no difference to the validity of the (Chiadzwa) Claims and accordingly that the charges are groundless," the company said.

ACR was forced off the site at gunpoint in 2006 and have been fighting a protracted court battle ever since over their ownership rights.  The parastatal Zimbabwe Mining Development Corporation (ZMDC) took over, joining forces with two South African owned companies to mine the diamond site. The High Court confirmed ACR's title in a September 2009, which was followed by a Supreme Court ruling earlier this year, which said that all mining operations at Chiadzwa must be suspended until the issue was finalised.

The High Court has since rescinded its 2009 ruling, citing irregularities in the acquisition and registration of the Chiadzwa claim. ACR's Andrew Cranswick said the company has appealed this decision, and added that the new fraud claims "are clearly groundless."

 

This latest development in Zimbabwe's unraveling diamond saga comes as diamond firm Canadile has been kicked off the Chiadzwa claim. Canadile, one of the joint ventures with the State's ZMDC, has been blacklisted by Zimbabwe, after six of its directors were charged with fraud. The six executives are linked to the Canadile Mining group, which is a joint venture firm with the parastatal ZMDC and a South African company, Core Mining and Minerals. Among the arrested group was Core Mining director Lovemore Kurotwi and suspended ZMDC chief executive Dominic Mubaiwa.

 

On Wednesday, High Court Judge President Justice George Chiweshe ordered the immediate release of Lovemore Kurotwi. He also criticised police for ignoring a High Court order that was issued on Saturday, telling police to arraign Kurotwi or release him. Four more members of the arrested group were eventually granted bail by Harare provincial Magistrate Mishrod Guvamombe on Wednesday, who only refused to release Dominic Mubaiwa whom he said was the principal offender in the case.

"The State failed to establish that the accused persons are not good candidates for bail although it cannot be denied that this is a serious offence," the Magistrate said in his ruling.

He continued: "But as regards the second accused (Mubaiwa) he is the principal offender and his circumstances are different from the rest, hence he will remain in custody to allow the police to carry out their extraterritorial investigations."

 

The four that were granted bail had faced a week behind bars on Wednesday evening after the State invoked Section 121 of Criminal Procedures act, used to further remand detained persons. The State eventually revoked this decision, resulting in the release of the four. The State's Chief Law Officer Chris Mutangadura has said the State will not challenge this decision, but will appeal the High Court's decision to free Kurotwi.

"We are complying with the order for him to be released but we are appealing on a point of law. The state is challenging the decision by the High Court in order to set the law straight," Mutangadura said in an interview after the ruling on Wednesday.

 

The Canadile Mining group has for months been at the centre of allegations of rampant smuggling out of Chiadzwa, where an estimated 2000 carats of gems are leaving the fields illegally a day. But there are warnings that these recent arrests are deliberately clouding deeper corruption of the diamond industry. The MDC has said this week the arrested group are merely "low-level officials." The party said in its 'Real Change Times' newsletter this week that the arrests "vindicates the MDC about the dearth of transparency and due process in the granting of concessions and mining rights in the diamond-rich area."

 

"The party however feels the officials that have been arraigned so far are 'small fry.' The real powers behind the deals, supported by the military junta, remain in the shadows," the MDC said.

 

The ZMDC now has 100% ownership of the claim it shared with Canadile, strengthening the government's share of the lucrative profits Chiadzwa is set to make.  But there is still no sign of where the profits are going, and even Prime Minister Morgan Tsvangirai has recently admitted that the national Treasury is not benefiting "meaningfully" from diamond revenues.

"There were high expectations, but let me tell you that Chiadzwa diamonds have not produced 'eldorado'," said Prime Minister Tsvangirai at a pre-budget seminar in Victoria Falls last week.

Economic Planning and Investment Promotion Minister, Tapiwa Mashakada, meanwhile told the same meeting last week that three more licences have been issued, to Chinese investors looking to extract gems from Chiadzwa.  Mashakada said the licences were granted to Sino-Zimbabwe, a joint commercial entity between the Chinese government and Zimbabwe with business interests in various sectors. Chinese firm Anjin is already mining the area, while China's 'Red Army' has reportedly struck an 'arms-for-diamonds' deal that is driving the plunder of Chiadzwa.

The UK's Daily Mail reported in September how the deal made by Mugabe's loyal security forces and the equally notorious Chinese People's Liberation Army, has resulted in millions of dollars worth of industrial diamonds being mined and airlifted to China. The stones, which are not pure enough for commercial sale, are flown directly out of Chiadzwa where an airstrip was built last year. In return Zimbabwe's military is given weapons to keep propping up Mugabe's regime.

The deal between Zimbabwe and China was reportedly set up by General Constantine Chiwenga, who is believed to have made the arrangement during a trip to China last year. At the same time the Mbada mining firm, the other joint venture with the ZMDC, is reportedly fronted by Robert Mugabe's pilot Robert Mhlanga, and a host of Chinese partners.

This dark side of the diamond industry in Zimbabwe is the complete opposite of the picture that the Mines Ministry has been trying to paint, to force the international trade watchdog, the Kimberley Process, to allow full diamonds exports from Zimbabwe to resume. Sales were barred last year after human rights abuses and reports of rampant smuggling at Chiadzwa, but Mines Minister Obert Mpofu now insists that all is above board.

Mpofu claims are contrary to ongoing reports of smuggling and abuses at the hands of the military still in control of Chiadzwa, where a looming health crisis is also indicative of the dire situation there.

At least 16 people have recently died and hundreds more are ill after a cholera outbreak in the area. Most of the cases are reportedly linked to illegal diamond mining activities in Chiadzwa, where miners live in unhygienic conditions.

Originally published by SW Radio Africa. © www.streetnewsservice.org

 

 

SNS logo
  • Website Design