News / National
4 rogue firms' accounts frozen
28 May 2023 at 02:59hrs | Views
BANK accounts belonging to four major basic commodity distributors have been frozen for suspected economic sabotage, while unscrupulous manufacturers and pharmaceutical companies also face the same consequences this week, the Financial Intelligence Unit (FIU) has said.
Businesses have been implicated in economic malpractices, including blatantly refusing to transact in the local currency or switching off point-of-sale machines.
In a statement yesterday, the FIU, a unit of the Reserve Bank of Zimbabwe (RBZ), named the four entities, saying these malpractices were not only criminal offences prosecutable in courts of law, but also administrative violations, punishable under the Bank Use Promotion Act and the Exchange Control Act.
"On May 24 2023, the FIU froze the bank accounts of four major distributors, namely, Saxin Trading, Simrac Enterprises, Brainscope Investments and Munella Enterprises, which have been diverting basic commodities to the informal market while refusing to supply the same to established retailers who pay for and sell goods in the local currency," said FIU.
The FIU said locally produced basic goods have flooded the informal market, with vendors — suspected to be agents of established retail outlets — now only accepting US dollar payments.
On their part, retailers have pegged their products either exclusively in US dollars or at exorbitantly high prices in the local currency, which has left most consumers in a fix. Others have been accused of running small tuckshops in downtown Harare, where they are pushing huge consignments of their products in hard currency only.
In an interview with The Sunday Mail yesterday, FIU director-general Mr Oliver Chiperesa elaborated on the FIU's action, saying more
companies are under the microscope.
"This coming week we are now going for the manufacturers as well, because those intermediaries connive with manufacturers to starve the formal shops and to supply those informal traders who don't pay taxes, who buy exclusively in United States dollars.
"All the manufacturers are actually chief culprits in this regard, because they are the ones who push those products through the intermediaries," he said.
"So they (manufacturers) will be our priority. We are also looking at the drug suppliers, pharmaceutical companies because we have noticed that pharmacies are some of the traders who are using the highest rates in the market."
Mr Chiperesa said some pharmacies are using "mad rates" as high as 4 000 to US $1 dollar.
"These are always pointing fingers to pharmaceutical companies, some who access foreign currency at the auction and then they go and sell their medicines to pharmacies exclusively in US dollars."
Writing in his weekly column for The Sunday Mail last week, President Mnangagwa said the authorities are aware that some businesses were disconnecting point-of-sale gadgets, discouraging sales in local currency, abusing the foreign currency auction system and channelling goods to the informal market through a shadowy network of agents.
Business organisations speak out
The Zimbabwe National Chamber of Commerce (ZNCC) said they are not afraid to disassociate with any member found working in connivance with shadow agents in the name of ditching the Zimbabwe dollar.
ZNCC chief executive officer, Mr Christopher Mugaga said:
"That is where the word sabotage perfectly fits in, I can't imagine a wholesaler or retailer building a fiefdom of shadow agents to push their products into the black market just in the name of refusing the Zimbabwe dollar."
He said as an organisation, they will never support such unlawful activities.
"If anyone is caught doing this and is a member of our organization we will churn them out of our structures," he said.
Confederation of Zimbabwe Retailers (CZR) president, Mr Denford Mutashu urged business to exercise restraint and continue operating within confines of the law.
"Business and the general public should not panic as ongoing engagements between Government and the private sector are progressing well with the common goal of stabilising the economy."
Speculative and forward pricing tendencies are driving inflation and have caused significant price disparities.
Businesses have been implicated in economic malpractices, including blatantly refusing to transact in the local currency or switching off point-of-sale machines.
In a statement yesterday, the FIU, a unit of the Reserve Bank of Zimbabwe (RBZ), named the four entities, saying these malpractices were not only criminal offences prosecutable in courts of law, but also administrative violations, punishable under the Bank Use Promotion Act and the Exchange Control Act.
"On May 24 2023, the FIU froze the bank accounts of four major distributors, namely, Saxin Trading, Simrac Enterprises, Brainscope Investments and Munella Enterprises, which have been diverting basic commodities to the informal market while refusing to supply the same to established retailers who pay for and sell goods in the local currency," said FIU.
The FIU said locally produced basic goods have flooded the informal market, with vendors — suspected to be agents of established retail outlets — now only accepting US dollar payments.
On their part, retailers have pegged their products either exclusively in US dollars or at exorbitantly high prices in the local currency, which has left most consumers in a fix. Others have been accused of running small tuckshops in downtown Harare, where they are pushing huge consignments of their products in hard currency only.
In an interview with The Sunday Mail yesterday, FIU director-general Mr Oliver Chiperesa elaborated on the FIU's action, saying more
companies are under the microscope.
"This coming week we are now going for the manufacturers as well, because those intermediaries connive with manufacturers to starve the formal shops and to supply those informal traders who don't pay taxes, who buy exclusively in United States dollars.
"All the manufacturers are actually chief culprits in this regard, because they are the ones who push those products through the intermediaries," he said.
"So they (manufacturers) will be our priority. We are also looking at the drug suppliers, pharmaceutical companies because we have noticed that pharmacies are some of the traders who are using the highest rates in the market."
Mr Chiperesa said some pharmacies are using "mad rates" as high as 4 000 to US $1 dollar.
Writing in his weekly column for The Sunday Mail last week, President Mnangagwa said the authorities are aware that some businesses were disconnecting point-of-sale gadgets, discouraging sales in local currency, abusing the foreign currency auction system and channelling goods to the informal market through a shadowy network of agents.
Business organisations speak out
The Zimbabwe National Chamber of Commerce (ZNCC) said they are not afraid to disassociate with any member found working in connivance with shadow agents in the name of ditching the Zimbabwe dollar.
ZNCC chief executive officer, Mr Christopher Mugaga said:
"That is where the word sabotage perfectly fits in, I can't imagine a wholesaler or retailer building a fiefdom of shadow agents to push their products into the black market just in the name of refusing the Zimbabwe dollar."
He said as an organisation, they will never support such unlawful activities.
"If anyone is caught doing this and is a member of our organization we will churn them out of our structures," he said.
Confederation of Zimbabwe Retailers (CZR) president, Mr Denford Mutashu urged business to exercise restraint and continue operating within confines of the law.
"Business and the general public should not panic as ongoing engagements between Government and the private sector are progressing well with the common goal of stabilising the economy."
Speculative and forward pricing tendencies are driving inflation and have caused significant price disparities.
Source - The Sunday Mail
