News / Local
Police, ZACC probe 3 PSMAS bosses
27 Apr 2023 at 01:23hrs | Views
Police this week picked up for questioning three Premier Service Medical Aid Society (PSMAS) managers over allegations of fraud, corruption and criminal abuse of office.
The three, who are still assisting with investigations, are Polite Mugwagwa, Nhamo Marandu and Stanley Dehwe.
Police and the Zimbabwe Anti-Corruption Commissioner (ZACC) are jointly conducting the investigations.
The three were said to have been picked up on Monday by the police and yesterday they were still assisting with the investigations.
National police spokesperson Assistant Commissioner Paul Nyathi confirmed the investigations were in progress.
"We are conducting investigations and we can't say much at the moment," he said. "We have picked up some suspects for questioning over allegations of fraud, corruption and abuse of office. We will, however, release more details tomorrow."
In an interview yesterday, ZACC spokesperson, Thandiwe Mlobane confirmed that they were conducting joint investigations with the police over the PSMAS case.
"What I can say is that ZACC and the ZRP are doing joint investigations over alleged corruption and abuse of office," she said.
This is not the first time that some bosses at PSMAS have been arrested for various offences, including fraud.
In September last year, four executives of PSMAS were arrested on charges of fraud, forgery and theft over payment of US$486 000 and almost $14,5 million in board holiday allowances that should never have been paid, a fake audit report and allowing themselves 15 beneficiaries on one subscription.
The suspects were PSMAS Holdings CEO Farai Muchena, PSMAS group strategy and performance executive Victor Chaipa, PSMAS managing director and executive director corporate affairs Shingai Mabuto and PSMAS company secretary Cosmas Mukwesha.
There were three alleged crimes, each involving at least one of the four, that have seen Premier Service Medical Aid Society taking a serious hit.
The police arrests were initiated by the Zimbabwe Anti-Corruption Commission.
Muchena, Chaipa and Mabuto were jointly appearing on four counts of theft after they allegedly awarded board members thousands of dollars in holiday allowances that they were not entitled to.
Mabuto was also appearing on a separate charge of fraud of $6 797 481 after he allegedly added five medical aid beneficiaries on top of the maximum of 10 stipulated by PSMAS.
Muchena and Mukwesha are also jointly charged with fraud and forgery after they allegedly tendered Premier Service Holdings company annual returns to the Registrar of Companies purporting that they had been audited by Grant Thornton, while knowing that no audit had been undertaken.
Circumstances leading to their arrest are that sometime in 2003, PSMAS formed PSMI, as its medical investment arm. PSMAS owned the entire shareholding.
The company was set up to own facilities such as clinics, pharmacies and hospitals that were needed by PSMAS members, most of whom are civil servants.
But then PSMI later formed other investment vehicles, Clay Dust Mining Company and Premier Service Microfinance that had little to do with treatment and medical aid.
In February 2019, a holding company called Premier Service Holding Company was formed to manage the activities of the society's subsidiaries, which included PSMI.
Between January 2015 and January 2017, PSMI appointed Colonel Wellington Tutisa, Cecilia Alexander, Richard Gundani, Vimbikai Magnes Kusema, Loveness Dumwa, Miriam Chahuruwa, and Dr E Purazi as board members on contracts that extended to January 2018.
The terms and conditions of service for the board members were guided by 2015 PSMI board terms of reference and the board fee structure.
In December 2018, Muchemwa, Chaipa and Mabuto allegedly diverted PSMI funds by approving yearly payments of holiday allowances to board members, well knowing that they were not entitled to benefit from such allowances.
They allegedly paid US$45 902 to board chairman Col Tulisa, US$22 249 to vice chairman Cecilia Alexander and US$6 746 to each of the other board members for a total of US$243 000. PSMAS allegedly lost US$115 373.
In 2019, they also allegedly approved payment of $243 000 and $5 084 176 in 2020.
The court heard that in 2021 $9 372 522 was paid in holiday allowances.
The three, who are still assisting with investigations, are Polite Mugwagwa, Nhamo Marandu and Stanley Dehwe.
Police and the Zimbabwe Anti-Corruption Commissioner (ZACC) are jointly conducting the investigations.
The three were said to have been picked up on Monday by the police and yesterday they were still assisting with the investigations.
National police spokesperson Assistant Commissioner Paul Nyathi confirmed the investigations were in progress.
"We are conducting investigations and we can't say much at the moment," he said. "We have picked up some suspects for questioning over allegations of fraud, corruption and abuse of office. We will, however, release more details tomorrow."
In an interview yesterday, ZACC spokesperson, Thandiwe Mlobane confirmed that they were conducting joint investigations with the police over the PSMAS case.
"What I can say is that ZACC and the ZRP are doing joint investigations over alleged corruption and abuse of office," she said.
This is not the first time that some bosses at PSMAS have been arrested for various offences, including fraud.
In September last year, four executives of PSMAS were arrested on charges of fraud, forgery and theft over payment of US$486 000 and almost $14,5 million in board holiday allowances that should never have been paid, a fake audit report and allowing themselves 15 beneficiaries on one subscription.
The suspects were PSMAS Holdings CEO Farai Muchena, PSMAS group strategy and performance executive Victor Chaipa, PSMAS managing director and executive director corporate affairs Shingai Mabuto and PSMAS company secretary Cosmas Mukwesha.
There were three alleged crimes, each involving at least one of the four, that have seen Premier Service Medical Aid Society taking a serious hit.
The police arrests were initiated by the Zimbabwe Anti-Corruption Commission.
Muchena, Chaipa and Mabuto were jointly appearing on four counts of theft after they allegedly awarded board members thousands of dollars in holiday allowances that they were not entitled to.
Mabuto was also appearing on a separate charge of fraud of $6 797 481 after he allegedly added five medical aid beneficiaries on top of the maximum of 10 stipulated by PSMAS.
Muchena and Mukwesha are also jointly charged with fraud and forgery after they allegedly tendered Premier Service Holdings company annual returns to the Registrar of Companies purporting that they had been audited by Grant Thornton, while knowing that no audit had been undertaken.
Circumstances leading to their arrest are that sometime in 2003, PSMAS formed PSMI, as its medical investment arm. PSMAS owned the entire shareholding.
The company was set up to own facilities such as clinics, pharmacies and hospitals that were needed by PSMAS members, most of whom are civil servants.
But then PSMI later formed other investment vehicles, Clay Dust Mining Company and Premier Service Microfinance that had little to do with treatment and medical aid.
In February 2019, a holding company called Premier Service Holding Company was formed to manage the activities of the society's subsidiaries, which included PSMI.
Between January 2015 and January 2017, PSMI appointed Colonel Wellington Tutisa, Cecilia Alexander, Richard Gundani, Vimbikai Magnes Kusema, Loveness Dumwa, Miriam Chahuruwa, and Dr E Purazi as board members on contracts that extended to January 2018.
The terms and conditions of service for the board members were guided by 2015 PSMI board terms of reference and the board fee structure.
In December 2018, Muchemwa, Chaipa and Mabuto allegedly diverted PSMI funds by approving yearly payments of holiday allowances to board members, well knowing that they were not entitled to benefit from such allowances.
They allegedly paid US$45 902 to board chairman Col Tulisa, US$22 249 to vice chairman Cecilia Alexander and US$6 746 to each of the other board members for a total of US$243 000. PSMAS allegedly lost US$115 373.
In 2019, they also allegedly approved payment of $243 000 and $5 084 176 in 2020.
The court heard that in 2021 $9 372 522 was paid in holiday allowances.
Source - The Herald
