Air Zimbabwe executive weeps at guilty verdict over insurance scam

AN AIR Zimbabwe executive who bled the airline of millions of dollars in a "fraudulent" aviation insurance deal wept yesterday as she was told she faces jail. Grace Pfumbidzayi, the national flag carrier's former company secretary, was the nexus of a $10 million insurance swindle that "favoured" Navistar Insurance Brokers, a Harare magistrate ruled yesterday as she convicted her of criminal abuse of office.

Pfumbidzayi "planned and executed" the fraudulent transactions "in connivance" with the airline's former CEO, Peter Chikumba, said regional magistrate Fadzai Mthombeni.

Chikumba and Pfumbidzayi, who attended court coming from home, were remanded in custody to today for sentencing - the clearest signal the magistrate was considering a custodial sentence.

The prospect of going to jail appeared to drive Pfumbidzayi to the edge, as she took the witness stand - at the invitation of her lawyer Advocate Webster Chinamhora instructed by Andrew Muvirimi - to plead with the magistrate to be allowed to go home to her children.

With tears rolling down her cheeks, Pfumbidzayi told the magistrate: "Whatever I did, and no matter how misguided it was, I did in good faith. The court found out that it amounted to a criminal conduct and for that I apologise for my actions."

She pleaded for a non-custodial sentence, stating that she was even ready to perform community service.

"Your worship, I'm comfortable with anything that makes me go back home to my children at the end of the day," she said, wiping her tears.

Prosecutors elected to pursue the lesser charge of criminal abuse of office while police wind up their fraud investigation targeting several current and former Air Zimbabwe executives.

Mthombeni, after a fully contested trial, acquitted the duo on an alternative charge of contravening the Procurement Act.

Criminal abuse of office, for which they had entered "not guilty" pleas, attracts a prison term of up to 15 years or a fine of $3,000.

Mthombeni said that Pfumbidzayi, 50, and Chikumba, 60, had broken all company procedures to appoint Navistar as the airline's insurer in 2009. The airline, which previously paid Marsh Insurance Brokers 125,000 euros per annum as brokerage fees, suddenly found itself paying Navistar 300,000 euros per quarter, translating to 1,2 million euros annually - nearly 10 times what Marsh was charging.

The increase in premiums was not matched by any commensurate increase in Air Zimbabwe's fleet size or expansion of its route network. In fact, some aircraft were actually grounded at the time.

Mthombeni told Pfumbidzayi and Chikumba: "You connived and showed favour to Navistar, and Navistar would receipt large amounts of money which Pfumbidzayi would authorise without any queries. You cannot account for that money.

"This offence was well planned and well executed. You cannot hide behind your fingers and allege that you were not aware of the crisis that had befallen the airline as far as insurance issues are concerned.

"You knew of the crisis way back and you had ample time to follow the correct procedure, but you did not follow the procurement procedure because you knew you had already appointed Navistar fraudulently. You had a duty and you knew what was expected of you."

Mthombeni said Chikumba was a crafty operator who had tried to leave some deniability in his illegal actions. Chikumba insisted during the trial that he had referred all insurance matters to Pfumbidzayi as the company secretary in charge of legal affairs.

"Chikumba as the group CEO was not supposed to entertain the presentation by Navistar because with his position he knew that they were supposed to go to tender. He was at the helm of the airline when insurance was paid through Navistar," the magistrate said.

"He received a letter from Navistar thanking him for their appointment and he just pushed it to Pfumbidzayi, ordering her to act relevantly. He had pre-planned this and knew that what they had done was not above board. He chose his words carefully when he ordered her to act relevantly.

"The question is, is it practical as he wants the court and the world to believe that his hands are clean? The answer is 'no!' He wanted to cover his tracks but he did not cover them well."

Mthombeni added that the failure by Pfumbidzayi to produce minutes in which there was a resolution to appoint Navistar shows that the management was not involved in the appointment of Navistar as she had initially claimed.

In aggravation, prosecutor Daniel Muchimbiri urged the court to impose a custodial sentence, adding that the pair had been convicted of a serious offence which attracts a prison term of up to 15 years.

"The court must not lose sight of the seriousness of the offence and in this case a fine will trivialise the offence and send a wrong message to the society," argued Muchimbiri. "A short and sharp prison term is most appropriate in the circumstances."

Chikumba, through his lawyer Admire Rubaya, pleaded for a non-custodial sentence. He said there was no monetary prejudice to the airline as was initially presented by the State.

Advocate Chinamhora weighed in, adding: "The court must take notice of the fact that the fraud charge as was initially brought by the State was not brought up in trial meaning they were not charged with fraud.

"There was no evidence led before this court to establish the amount of prejudice suffered by the airline."

The magistrate rejected Rubaya's application to have them remanded out of custody pending their sentencing today.