Business / Companies
NSSA chairman embroiled in underhand Rainbow Tourism Group takeover bid
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NSSA chairman Emmanuel Fundira
NATIONAL Social Security Authority (Nssa) chairman Emmanuel Fundira, who is former chairman of African Sun Limited, and an ex-Rainbow Tourism Group (RTG) senior executive Paula January are accused of scheming a corporate raiding plot to knock down RTG's market value ahead of a planned swoop on the company counter for shares at an undervalued price, an investigation has shown.
The secret plan involves destabilising the company and creating a negative market sentiment to collapse the share price, and preventing potential strategic investors from putting money into the hospitality group to run down its value.
Nssa is the major shareholder in RTG, which is performing well, with a 91,6% equity stake in the Zimbabwe Stock Exchange (ZSE)-listed company.
The statutory pension fund is however planning to offload 56% of its shares, over time, hence the on-going plot to devalue its shares to ensure cheap stock cumulative buying.
ZHL Capital, which is part of ZimRe Holdings, is Nssa's financial advisory firm in the disposal of its 56%. Nssa is talking to several potential buyers locally and internationally. That is the stock Fundira and his business allies are targeting.
Fundira, who is deeply intertwined in hospitality activities, is conflicted as former African Sun chair with residual interest on the one hand; and current chairperson of Nssa which controls RTG on the other.
African Sun, which was ZSE-listed until 2023, is now listed on the Victoria Falls Stock Exchange and runs 10 hotels.
Fundira is a leading safari industry operator and has tourism assets in South Africa. He still has indirect interest in African Sun business affairs.
In addition, Fundira is heavily invested in the hospitality and tourism industry. He owns and is chief executive of Astoc Leisure Group. He is also the Safari Operators Association of Zimbabwe president and past chairperson of the Zimbabwe Council of Tourism.
Upon taking over Nssa, Fundira signed an agreement not to be involved in hospitality issues as RTG is a competitor to African Sun. He is however meddling in hospitality affairs in violation of the agreement.
This comes at a time the Zimbabwe Anti-Corruption Commission (Zacc) has launched an investigation into alleged money laundering against RTG and its executives.
The allegations basically involve a series of payments in salaries, gratuities, allowances and bonuses, some of them backdated due to lagging remunerations caused by the Covid -19 global pandemic and cashflows constraints.
Market watchers say Fundira and Paula January instigated the investigations through their behind-the-scenes manoeuvres to create internal turmoil within RTG and fuel negative market sentiment to erode share value. That destabilisation will help knock down stock value, aiding and abetting the planned incremental process of buying of the shares Nssa has put on public offer.
Manipulation of share prices to undervalue stock and take over a company is illegal in Zimbabwe and many other countries. Corporate raiders however still find ways to drive down and undervalue shares to take over companies.
After Fundira and his close ally Paula January's clandestine manoeuvres, the anti-corruption body has obtained a search and seizure warrant, authorising its officers to seize payroll records, employment contracts, and other financial documents related to top RTG executives.
RTG has been cooperating with Zacc through the board, but is challenging the warrant which it sees as a witch-hunting exercise driven by external forces with ulterior motives and vested interest. Insiders at Nssa say Fundira is part of the scheme as he prefers a pliant executive at RTG which will enable him to pursue his interests. He was appointed Nssa chairman in May 2023 to supervise the management of the US$1.2 billion fund and ensure fiduciary to the company, but information at hand shows he doing the opposite for self-interest.
Nssa has diversified interests in banking, finance, real estate and hospitality sectors.
From a shareholding of 32% in 2012, Nssa has over the years strengthened its grip on RTG and has over the last few years attempted to influence events at the hotelier. This was the case during Fundira's predecessor, Arthur Manase's time at the helm of the pension fund.
ZSE rules demand that Nssa dilutes its 91.6% shareholding. The threshold is 35%; above that a waiver would be required.
Market watchers see Fundira's manoeuvres and the underhand activities as a way to create a negative market sentiment in the company to devalue its share price to buy stock at a cheap price.
Before Fundira, Manase tried to bring in African Bush Camps after Nssa bought Nick Van Hoogstraten's shares for US$20 million in December 2021, although the shares were overvalued at US$10 million.
New frontier Capital Pvt Ltd were the financial advisors representing African Bush Camp in the deal.
In a letter dated 31 January 2022 addressed to Manase, New Frontier managing director Desmond Matete said the transaction would be a non-cash-based transaction of complimentary tourism and hospitality assets.
The plan however collapsed after Manase's departure, which opened the door for Fundira, who is heavily invested in the tourism industry.
Fundira came in at a time RTG was seeking to expand by, among other things, acquiring Montclaire Hotel in Nyanga. Nssa, through its subsidiary National Building Society, is however stalling the acquisition by delaying to guarantee the availability of cash despite promising to do so.
The group is also seeking external investors, but the timing of the Zacc investigation is seen as an external attempt to scuttle plans.
Because of his interests in tourism industry, the Office of The President and Cabinet specifically barred the Nssa chair from involving himself in Nssa's tourism interests, including at RTG.
His appointment letter dated 21 August 2023, states that "Dr Fundira should recuse himself from any Nssa decisions that have a bearing on the tourism sector where he has vast personal interests."
Documents and audios obtained by The NewsHawks suggest Fundira has been operating in the shadows, primarily through Paula January, a former Kadoma Hotel and Conference Centre general manager, who was dismissed from the group after a child drowned at the hotel pool on 30 September 2019 under suspicious circumstances. The alleged drowning incident was controversial.
The audios suggest Fundira has been supplying Paula January with sensitive information including payroll details of RTG executive, for onward transmission to Zacc, to settle personal scores. Zacc investigating officers have in turn kept Paula January informed about their investigation, including sending her messages via WhatsApp, while conducting a meeting with RTG board members.
Paula January and Fundira's involvement
In several revealing audios between Paula January and various parties, she is heard saying she would unleash Zacc on RTG executives. She said she was motivated by the fact that she received a low package upon resignation after working for the group for 18 years. .
However, records show Paula January resigned in a huff after the group launched investigations into the controversial drowning incident.
In a conversation dated 18 October 2023, Paula January states that she was aware that RTG executives had been given gratuities. In one audio she is heard saying "let me look for an email from Fundira; Fundira, Fundira…"before reading the exact amounts each RTG executive received.
She also said she would use her influence to ensure lifestyle audits are carried out on executives, while claiming connections with very high offices in the land.
In the audios, she mentions that she had instigated the Zacc probe.
She also mentions that she was in constant touch with Fundira, showing they are working together in their project.
Paula January confesses Fundira had a personal dislike of RTG chief executive MacGerald Tendai Madziwanyika and shares details of a meeting the Nssa chairperson had with the RTG boss in Dubai.
The NewsHawks confirmed the Dubai meeting.
Asked to comment on the allegations, Fundira denied having a working relationship with Paula January and dismissed the allegations of plotting to manipulate RTG share price for his own business interest.
"The true position is that I do not have any working relationship with so called Paula January (whoever she is) nor do I have access to RTG financial information in as much as RTG is a subsidiary of NSSA of which I am an NED (non-executive director) and chairman," he said.
"It is however common cause that RTG have a reporting line to the executive at Nssa as a subsidiary and that as a public-listed entity they have their own board chaired by Mr Douglas Hoto."
Fundira further said he had no executive oversight on RTG, although it is a Nssa subsidiary.
"All these allegations are totally unfounded and can be put to test and proved in the passage of time," he said.
Paula January also said she does not know Fundira and suggested that the audio leaks were doctored.
"Unfortunately I don't do voice notes after my past experiences with RTG. We are living in the times of technology and things can be doctored. I moved on with my life and I have been here in Malawi for four years. I actually wish RTG well and by the way, who is Fundira and what does he do at RTG?," she asked.
She said she had lost touch with the goings-on at RTG, despite he audio conversations which have been verified with other persons involved suggest otherwise.
But information gleaned from audios and other sources show that Fundira and Paula January do not only know each other very well, but also work together closely. Their denials are contradicted by clear evidence, suggesting a cover up of their activities.
Chronology of Events
Acting on information provided by Paula January, who is working with Fundira, Zacc first descended on RTG Corporate Office on 13 September 2023, armed with a search and seizure warrant for fraud. The charge emanated from a five-year strategy retreat held in Dubai by the board and senior managers.
The anti-corruption body demanded cabinet authority for the trip as well as travel and payment records.
RTG however applied for an urgent stay of execution, which the High Court granted on 18 September 2023. RTG argued that as a listed company, officials do not require cabinet approval to travel. RTG won the court application as the judge dismissed the search and seizure warrant.
But Zacc returned on 28 February 2024 with another warrant alleging money laundering and illegal foreign currency dealings. The body sought payroll and employment records of six senior executives; Madzivanyika, Napoleon Kudakwashe Mtukwa, Tapiwa Mari, Tichaona Gabriel Hwingwiri, Laurence Dhemba, and Shupikai Marware, facing serious allegations.
However, RTG filed another urgent chamber application for stay of execution, which the High Court granted on 5 March 2024. The hotelier cited confidentiality concerns and a lack of connection between the required documents and the allegations.
The company argued it is not possible to prove money laundering and externalisation through salaries, and saw the move as an attempt to sensationalise the event to the public.
RTG lawyers also argued that the court application did not specify who the allegations are against, that is whether they were against the company or executives.
Nevertheless, in both cases, the company said that the documents sought by Zacc would not help the case.
The RTG board then tasked its Audit and Risk Committee and Human Resources Committee chairpersons to engage Zacc.
The board members met Zacc investigators on 12 March where the anti-corruption body presented bank statements of the six executives.
Zacc questioned salary deposits made by the group into the executives' accounts.
Although RTG questioned how salary deposits could be linked to externalisation, the board conducted an internal audit, reconciling all transactions with payroll records, board approvals and external audit certificates.
The board was satisfied that all payments were authorised and wrote to Zacc on 4 April 2024 informing the body of the results of the internal investigation.
Zacc did not respond.
The letter signed by Hoto highlighted that the board had done investigations and was satisfied that all payments were above board.
The board's verification exercise included reviewing employment contracts, examining payrolls for the 24-month period (2022-2023), reviewing bank payment instructions from RTG to the banks, referring to a special payroll audit report by an independent Chartered Accountant firm and reviewing associated board resolutions, including those focusing on shortfalls due to a salary freeze during the Covid-19 era.
It also included analysing board resolutions on the financial implications as a result in changes of contracts, including gratuity payments and allowances in the old contracts. In addition, the board also reviewed bank statements provided by Zacc.
Hoto said RTG had taken the matter seriously. He also explained why multiple-deposits were made.
"Additionally, it is crucial for Zacc to consider the contextual challenges faced by RTG during the period under review," Hoto wrote.
"Notably the company experienced cash-flow challenges, necessitating staggered payments , and underwent a value for money audit by our major customer, the Government of Zimbabwe, leading to delayed debt settlements.
"Furthermore, numerous payroll payments were made outside the monthly salary, accompanying gratuities, bonuses, Covid-related shortfall payments, and motor vehicle allowances.
"In conclusion, the RTG board is pleased to affirm that all payments made to our senior executives were conducted with transparency and integrity."
Zacc then went quiet, but returned on 28 January, with the same search and seizure warrant after High Court judge Justice Deme dismissed RTG's appeal.
RTG has filed a notice of appeal against the judgement issued on 15 January.
Among other reasons, the hotelier is arguing that the court erred by contradicting itself in ruling that an offender needs not be identified in the warrant of search and seizure, while also finding a non-existent conflict between section 50(2) of the Criminal Procedure and Evidence Act [Chapter 9:07] and scholarly opinion, both of which, in fact, agree that the offender must be identified in the warrant.
"A fortiori, there was a serious misdirection in finding no need to identify the offender, while simultaneously holding that the evidence presented to 1st Respondent accurately identified the crime committed by individuals not named in the warrant; which sought specific contracts and payrolls from named individuals, further demonstrating that it was, in fact, a warrant for the search of evidence of a crime," the notice of appeal reads.
"The learned judge incorrectly concluded that commonplace exchange of money raised reasonable suspicion of money laundering, without explaining which aspects of money laundering justified the issuance of the challenged search warrant; especially when the requested records were subject to regular audits, demonstrating propriety and undermining the sensibility of a vague warrant that appeared more as a witch hunt."
RTG Response
In a written response to The NewsHawks's questions, RTG acknowledged the importance of Zacc in combating corruption, but said it was challenging the search and seizure warrant because it cannot be possible to prove the charge of money laundering by seizing its payroll and employee contracts.
The company said stock exchanges worldwide are legally designed to be the most secure investment platforms, subjected to routine audits and oversight by multiple regulatory bodies that assure transparency and compliance.
"As a publicly listed company on the Zimbabwe Stock Exchange, RTG undergoes rigorous scrutiny from various regulatory and government agencies, including the RBZ, Financial Intelligence Unit, National Economic Conduct Inspectorate (NECI) and Zimra. In addition, it is a legal requirement to undergo independent audits from external auditors every year. These agencies have been set up by operation of law to have unhindered access to documents without having to revert to the courts of law for the rights to obtain documents from an entity," RTG said.
The company said it has also tried to cooperate with Zacc through its directors.
"This was done in the spirit of openness, cooperation and engagement so as to avoid a confrontational approach and to retrieve the matter from the public view that had been occasioned by the various search and seizure warrants," RTG said.
"Such engagements were conducted in April 2024 in which, by agreement with Zacc, the Board of RTG undertook a detailed audit of all transactions in the area of concern as indicated by Zacc. Such audit was for the period January 2022 to January 2024. On completion of these thorough checks, the Board of RTG then wrote to Zacc to meet and close the matter as no wrong doing had been found. Zacc did not respond."
RTG said during the period of interest to Zacc, the company's activities had been checked by a number of entities including the Reserve Bank of Zimbabwe (RBZ), National Economic Conduct Inspectorate (NECI), Zimbabwe Revenue Authority (Zimra), Financial Intelligence Unit (FIU) and external auditors.
In May 2023, RBZ checked five-year statements for the local and non-residents accounts. It also visited its offices in South Africa as it sought to ensure exchange control regulations for non-resident accounts were being followed.
RTG added RBZ was satisfied with the company's exchange control status and renewed the exchange control authority by three years.
NECI examined the company's bank statements for the local and non-resident accounts, petty cash schedules, trial balances and some source documents. This was after the company was being accused of violating the Banking Act through a tip-off.
"RTG was cleared of any wrongdoing and was found to be in compliance with all relevant Acts. RTG was cleared of all the claims brought forward to NECI," the company said.
Between August 2023 and March 2024, Zimra examined trial balances, bank statements and cash books as it conducted an audit of all tax heads.
"RTG was found to be compliant with all relevant tax regulatory framework and cleared all forms of tax evasion," it said.
The FIU in March 2024 also looked into its operations to check on any violations of the Banking Act, Exchange control and externalization of funds.
RTG said the company was not shown to be involved in any wrongdoing whatsoever.
In addition, RTG said external audits were being done annually to provide assurance to the shareholders of the company. The company said these regulatory agencies and auditors are given unfettered access to company-wide transactions in all fields.
"RTG ‘s conduct has been in compliance with ZSE, Company law and all other relevant legislations and the external auditors' reports are clean," it said.
RTG stated due to the assurances provided by law and routine checks, investors anywhere in the world should have the confidence to invest on the Zimbabwe Stock Exchange with the full knowledge that their investment is safe.
"Global capital is shy. In the modern world of intense competition for investment, it is important that in all our actions as a nation we exercise maximum discretion and restraint in safeguarding the investment attractiveness of our country as well as to ensure the continuity and growth of its corporates," it said.
The secret plan involves destabilising the company and creating a negative market sentiment to collapse the share price, and preventing potential strategic investors from putting money into the hospitality group to run down its value.
Nssa is the major shareholder in RTG, which is performing well, with a 91,6% equity stake in the Zimbabwe Stock Exchange (ZSE)-listed company.
The statutory pension fund is however planning to offload 56% of its shares, over time, hence the on-going plot to devalue its shares to ensure cheap stock cumulative buying.
ZHL Capital, which is part of ZimRe Holdings, is Nssa's financial advisory firm in the disposal of its 56%. Nssa is talking to several potential buyers locally and internationally. That is the stock Fundira and his business allies are targeting.
Fundira, who is deeply intertwined in hospitality activities, is conflicted as former African Sun chair with residual interest on the one hand; and current chairperson of Nssa which controls RTG on the other.
African Sun, which was ZSE-listed until 2023, is now listed on the Victoria Falls Stock Exchange and runs 10 hotels.
Fundira is a leading safari industry operator and has tourism assets in South Africa. He still has indirect interest in African Sun business affairs.
In addition, Fundira is heavily invested in the hospitality and tourism industry. He owns and is chief executive of Astoc Leisure Group. He is also the Safari Operators Association of Zimbabwe president and past chairperson of the Zimbabwe Council of Tourism.
Upon taking over Nssa, Fundira signed an agreement not to be involved in hospitality issues as RTG is a competitor to African Sun. He is however meddling in hospitality affairs in violation of the agreement.
This comes at a time the Zimbabwe Anti-Corruption Commission (Zacc) has launched an investigation into alleged money laundering against RTG and its executives.
The allegations basically involve a series of payments in salaries, gratuities, allowances and bonuses, some of them backdated due to lagging remunerations caused by the Covid -19 global pandemic and cashflows constraints.
Market watchers say Fundira and Paula January instigated the investigations through their behind-the-scenes manoeuvres to create internal turmoil within RTG and fuel negative market sentiment to erode share value. That destabilisation will help knock down stock value, aiding and abetting the planned incremental process of buying of the shares Nssa has put on public offer.
Manipulation of share prices to undervalue stock and take over a company is illegal in Zimbabwe and many other countries. Corporate raiders however still find ways to drive down and undervalue shares to take over companies.
After Fundira and his close ally Paula January's clandestine manoeuvres, the anti-corruption body has obtained a search and seizure warrant, authorising its officers to seize payroll records, employment contracts, and other financial documents related to top RTG executives.
RTG has been cooperating with Zacc through the board, but is challenging the warrant which it sees as a witch-hunting exercise driven by external forces with ulterior motives and vested interest. Insiders at Nssa say Fundira is part of the scheme as he prefers a pliant executive at RTG which will enable him to pursue his interests. He was appointed Nssa chairman in May 2023 to supervise the management of the US$1.2 billion fund and ensure fiduciary to the company, but information at hand shows he doing the opposite for self-interest.
Nssa has diversified interests in banking, finance, real estate and hospitality sectors.
From a shareholding of 32% in 2012, Nssa has over the years strengthened its grip on RTG and has over the last few years attempted to influence events at the hotelier. This was the case during Fundira's predecessor, Arthur Manase's time at the helm of the pension fund.
ZSE rules demand that Nssa dilutes its 91.6% shareholding. The threshold is 35%; above that a waiver would be required.
Market watchers see Fundira's manoeuvres and the underhand activities as a way to create a negative market sentiment in the company to devalue its share price to buy stock at a cheap price.
Before Fundira, Manase tried to bring in African Bush Camps after Nssa bought Nick Van Hoogstraten's shares for US$20 million in December 2021, although the shares were overvalued at US$10 million.
New frontier Capital Pvt Ltd were the financial advisors representing African Bush Camp in the deal.
In a letter dated 31 January 2022 addressed to Manase, New Frontier managing director Desmond Matete said the transaction would be a non-cash-based transaction of complimentary tourism and hospitality assets.
The plan however collapsed after Manase's departure, which opened the door for Fundira, who is heavily invested in the tourism industry.
Fundira came in at a time RTG was seeking to expand by, among other things, acquiring Montclaire Hotel in Nyanga. Nssa, through its subsidiary National Building Society, is however stalling the acquisition by delaying to guarantee the availability of cash despite promising to do so.
The group is also seeking external investors, but the timing of the Zacc investigation is seen as an external attempt to scuttle plans.
Because of his interests in tourism industry, the Office of The President and Cabinet specifically barred the Nssa chair from involving himself in Nssa's tourism interests, including at RTG.
His appointment letter dated 21 August 2023, states that "Dr Fundira should recuse himself from any Nssa decisions that have a bearing on the tourism sector where he has vast personal interests."
Documents and audios obtained by The NewsHawks suggest Fundira has been operating in the shadows, primarily through Paula January, a former Kadoma Hotel and Conference Centre general manager, who was dismissed from the group after a child drowned at the hotel pool on 30 September 2019 under suspicious circumstances. The alleged drowning incident was controversial.
The audios suggest Fundira has been supplying Paula January with sensitive information including payroll details of RTG executive, for onward transmission to Zacc, to settle personal scores. Zacc investigating officers have in turn kept Paula January informed about their investigation, including sending her messages via WhatsApp, while conducting a meeting with RTG board members.
Paula January and Fundira's involvement
In several revealing audios between Paula January and various parties, she is heard saying she would unleash Zacc on RTG executives. She said she was motivated by the fact that she received a low package upon resignation after working for the group for 18 years. .
However, records show Paula January resigned in a huff after the group launched investigations into the controversial drowning incident.
In a conversation dated 18 October 2023, Paula January states that she was aware that RTG executives had been given gratuities. In one audio she is heard saying "let me look for an email from Fundira; Fundira, Fundira…"before reading the exact amounts each RTG executive received.
She also said she would use her influence to ensure lifestyle audits are carried out on executives, while claiming connections with very high offices in the land.
In the audios, she mentions that she had instigated the Zacc probe.
She also mentions that she was in constant touch with Fundira, showing they are working together in their project.
Paula January confesses Fundira had a personal dislike of RTG chief executive MacGerald Tendai Madziwanyika and shares details of a meeting the Nssa chairperson had with the RTG boss in Dubai.
The NewsHawks confirmed the Dubai meeting.
Asked to comment on the allegations, Fundira denied having a working relationship with Paula January and dismissed the allegations of plotting to manipulate RTG share price for his own business interest.
"The true position is that I do not have any working relationship with so called Paula January (whoever she is) nor do I have access to RTG financial information in as much as RTG is a subsidiary of NSSA of which I am an NED (non-executive director) and chairman," he said.
"It is however common cause that RTG have a reporting line to the executive at Nssa as a subsidiary and that as a public-listed entity they have their own board chaired by Mr Douglas Hoto."
Fundira further said he had no executive oversight on RTG, although it is a Nssa subsidiary.
"All these allegations are totally unfounded and can be put to test and proved in the passage of time," he said.
Paula January also said she does not know Fundira and suggested that the audio leaks were doctored.
"Unfortunately I don't do voice notes after my past experiences with RTG. We are living in the times of technology and things can be doctored. I moved on with my life and I have been here in Malawi for four years. I actually wish RTG well and by the way, who is Fundira and what does he do at RTG?," she asked.
She said she had lost touch with the goings-on at RTG, despite he audio conversations which have been verified with other persons involved suggest otherwise.
But information gleaned from audios and other sources show that Fundira and Paula January do not only know each other very well, but also work together closely. Their denials are contradicted by clear evidence, suggesting a cover up of their activities.
Acting on information provided by Paula January, who is working with Fundira, Zacc first descended on RTG Corporate Office on 13 September 2023, armed with a search and seizure warrant for fraud. The charge emanated from a five-year strategy retreat held in Dubai by the board and senior managers.
The anti-corruption body demanded cabinet authority for the trip as well as travel and payment records.
RTG however applied for an urgent stay of execution, which the High Court granted on 18 September 2023. RTG argued that as a listed company, officials do not require cabinet approval to travel. RTG won the court application as the judge dismissed the search and seizure warrant.
But Zacc returned on 28 February 2024 with another warrant alleging money laundering and illegal foreign currency dealings. The body sought payroll and employment records of six senior executives; Madzivanyika, Napoleon Kudakwashe Mtukwa, Tapiwa Mari, Tichaona Gabriel Hwingwiri, Laurence Dhemba, and Shupikai Marware, facing serious allegations.
However, RTG filed another urgent chamber application for stay of execution, which the High Court granted on 5 March 2024. The hotelier cited confidentiality concerns and a lack of connection between the required documents and the allegations.
The company argued it is not possible to prove money laundering and externalisation through salaries, and saw the move as an attempt to sensationalise the event to the public.
RTG lawyers also argued that the court application did not specify who the allegations are against, that is whether they were against the company or executives.
Nevertheless, in both cases, the company said that the documents sought by Zacc would not help the case.
The RTG board then tasked its Audit and Risk Committee and Human Resources Committee chairpersons to engage Zacc.
The board members met Zacc investigators on 12 March where the anti-corruption body presented bank statements of the six executives.
Zacc questioned salary deposits made by the group into the executives' accounts.
Although RTG questioned how salary deposits could be linked to externalisation, the board conducted an internal audit, reconciling all transactions with payroll records, board approvals and external audit certificates.
The board was satisfied that all payments were authorised and wrote to Zacc on 4 April 2024 informing the body of the results of the internal investigation.
Zacc did not respond.
The letter signed by Hoto highlighted that the board had done investigations and was satisfied that all payments were above board.
The board's verification exercise included reviewing employment contracts, examining payrolls for the 24-month period (2022-2023), reviewing bank payment instructions from RTG to the banks, referring to a special payroll audit report by an independent Chartered Accountant firm and reviewing associated board resolutions, including those focusing on shortfalls due to a salary freeze during the Covid-19 era.
It also included analysing board resolutions on the financial implications as a result in changes of contracts, including gratuity payments and allowances in the old contracts. In addition, the board also reviewed bank statements provided by Zacc.
Hoto said RTG had taken the matter seriously. He also explained why multiple-deposits were made.
"Additionally, it is crucial for Zacc to consider the contextual challenges faced by RTG during the period under review," Hoto wrote.
"Notably the company experienced cash-flow challenges, necessitating staggered payments , and underwent a value for money audit by our major customer, the Government of Zimbabwe, leading to delayed debt settlements.
"Furthermore, numerous payroll payments were made outside the monthly salary, accompanying gratuities, bonuses, Covid-related shortfall payments, and motor vehicle allowances.
"In conclusion, the RTG board is pleased to affirm that all payments made to our senior executives were conducted with transparency and integrity."
Zacc then went quiet, but returned on 28 January, with the same search and seizure warrant after High Court judge Justice Deme dismissed RTG's appeal.
RTG has filed a notice of appeal against the judgement issued on 15 January.
Among other reasons, the hotelier is arguing that the court erred by contradicting itself in ruling that an offender needs not be identified in the warrant of search and seizure, while also finding a non-existent conflict between section 50(2) of the Criminal Procedure and Evidence Act [Chapter 9:07] and scholarly opinion, both of which, in fact, agree that the offender must be identified in the warrant.
"A fortiori, there was a serious misdirection in finding no need to identify the offender, while simultaneously holding that the evidence presented to 1st Respondent accurately identified the crime committed by individuals not named in the warrant; which sought specific contracts and payrolls from named individuals, further demonstrating that it was, in fact, a warrant for the search of evidence of a crime," the notice of appeal reads.
"The learned judge incorrectly concluded that commonplace exchange of money raised reasonable suspicion of money laundering, without explaining which aspects of money laundering justified the issuance of the challenged search warrant; especially when the requested records were subject to regular audits, demonstrating propriety and undermining the sensibility of a vague warrant that appeared more as a witch hunt."
RTG Response
In a written response to The NewsHawks's questions, RTG acknowledged the importance of Zacc in combating corruption, but said it was challenging the search and seizure warrant because it cannot be possible to prove the charge of money laundering by seizing its payroll and employee contracts.
The company said stock exchanges worldwide are legally designed to be the most secure investment platforms, subjected to routine audits and oversight by multiple regulatory bodies that assure transparency and compliance.
"As a publicly listed company on the Zimbabwe Stock Exchange, RTG undergoes rigorous scrutiny from various regulatory and government agencies, including the RBZ, Financial Intelligence Unit, National Economic Conduct Inspectorate (NECI) and Zimra. In addition, it is a legal requirement to undergo independent audits from external auditors every year. These agencies have been set up by operation of law to have unhindered access to documents without having to revert to the courts of law for the rights to obtain documents from an entity," RTG said.
The company said it has also tried to cooperate with Zacc through its directors.
"This was done in the spirit of openness, cooperation and engagement so as to avoid a confrontational approach and to retrieve the matter from the public view that had been occasioned by the various search and seizure warrants," RTG said.
"Such engagements were conducted in April 2024 in which, by agreement with Zacc, the Board of RTG undertook a detailed audit of all transactions in the area of concern as indicated by Zacc. Such audit was for the period January 2022 to January 2024. On completion of these thorough checks, the Board of RTG then wrote to Zacc to meet and close the matter as no wrong doing had been found. Zacc did not respond."
RTG said during the period of interest to Zacc, the company's activities had been checked by a number of entities including the Reserve Bank of Zimbabwe (RBZ), National Economic Conduct Inspectorate (NECI), Zimbabwe Revenue Authority (Zimra), Financial Intelligence Unit (FIU) and external auditors.
In May 2023, RBZ checked five-year statements for the local and non-residents accounts. It also visited its offices in South Africa as it sought to ensure exchange control regulations for non-resident accounts were being followed.
RTG added RBZ was satisfied with the company's exchange control status and renewed the exchange control authority by three years.
NECI examined the company's bank statements for the local and non-resident accounts, petty cash schedules, trial balances and some source documents. This was after the company was being accused of violating the Banking Act through a tip-off.
"RTG was cleared of any wrongdoing and was found to be in compliance with all relevant Acts. RTG was cleared of all the claims brought forward to NECI," the company said.
Between August 2023 and March 2024, Zimra examined trial balances, bank statements and cash books as it conducted an audit of all tax heads.
"RTG was found to be compliant with all relevant tax regulatory framework and cleared all forms of tax evasion," it said.
The FIU in March 2024 also looked into its operations to check on any violations of the Banking Act, Exchange control and externalization of funds.
RTG said the company was not shown to be involved in any wrongdoing whatsoever.
In addition, RTG said external audits were being done annually to provide assurance to the shareholders of the company. The company said these regulatory agencies and auditors are given unfettered access to company-wide transactions in all fields.
"RTG ‘s conduct has been in compliance with ZSE, Company law and all other relevant legislations and the external auditors' reports are clean," it said.
RTG stated due to the assurances provided by law and routine checks, investors anywhere in the world should have the confidence to invest on the Zimbabwe Stock Exchange with the full knowledge that their investment is safe.
"Global capital is shy. In the modern world of intense competition for investment, it is important that in all our actions as a nation we exercise maximum discretion and restraint in safeguarding the investment attractiveness of our country as well as to ensure the continuity and growth of its corporates," it said.
Source - thenewshawks.com
