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Chivayo hijacks US$40m corrupt ZEC deal

by Staff reporter
28 May 2024 at 12:47hrs | Views
CONTROVERSIAL businessman Wicknell Chivayo, who is close to President Emmerson Mnangagwa and other high-profile government officials, corruptly got a windfall from a murky Zimbabwe Election Commission (Zec) US$40 million tender to supply electoral material for the 2023 general elections, inflating some invoices by up to 235%, an investigation by The NewsHawks has revealed.

The NewsHawks has been investigating the story since last year's elections after getting tips that Zec under chairperson Priscilla Chigumba had entered into a shady deal with Chivayo and his business partners to supply biometric voter registration kits for the disputed polls.

The procurement deal to supply the kits, equipment and other election materials was valued at US$40 million in total.

In terms of the agreement obtained by The NewsHawks, the advance payment was US$19 957 301.00 (about US$20 million).'

That was 50% of the contract value.

This means the closed tender, which was selective or restricted - given to Chivayo and others without a competitive bidding process and transparency on account of time limits for the polls and patronage - was worth US$39 914 602, about US$40 million.

The deal was approved by the Office of the President and Cabinet (OPC) - drawing in President Emmerson Mnangagwa and Chigumba, evidence gathered shows.

This investigation began with the gathering of tips and pieces of information before threading together a complete picture.

As Zimbabwe moved towards elections in August last year, Zec in February initiated a procurement process and handpicked Chivayo, an ex-convict and his partners to supply key electoral requirements: Biometric voter registration kits and voting materials.

Critical materials always needed during elections include registration kits, polling day materials, ballot boxes and ballot paper, voting booths, indelible ink and ink pens (including invisible indelible ink).

Electoral equipment, including information technology hardware, software, and peripherals, power supplies such as generators and solar panels, and communication gadgets are needed.

In this case, the agreement specifically focused on biometric voter registration (BVR) kits and any other voting materials that were needed.

Investigations, supported by documents and individual testimonies, show that Chivayo, in collaboration with local businessmen Mike Chimombe and Moses Mpofu, through Better Brands Security (Pvt) Ltd, entered into an agreement with a South African company, Ren-Form CC, on 13 February 2023 to participate in Zimbabwe's election tenders.

Ren-Form is a Johannesburg-based integrated digital, commercial and security printing firm. It is located at 9 Trump St, Selby South.

Better Brands Security is part of Zanu-PF gold dealer Pedzai "Scott" Sakupwanya's group of companies, including Better Brands Jewellery, Better Brands Petroleum, Better Brands Construction and the Scott Foundation.

The companies are based at No. 72 Cambridge Drive, Greendale, Harare.

Better Brands Security has no specialty, capacity or experience in the procurement of election equipment and materials.

In the agreement, the South African company proposed to supply, install, train and support a suitable solution that will meet the needs of Zec, including providing new "world-class" biometric voter registration kits as well as the required software to ensure that the commission could register and efficiently update the voter management system ahead of the high-stakes elections.

A memorandum of agreement (MoA) signed by the parties shows that it was resolved Ren-Form would charge market rates, while Better Brands Security would put mark-ups, inflating the prices through extra fees and commissions to maximise profit and raise enough money to pay hidden parties and individuals.

Ren-Form chief executive officer Thomas Michael Du Sart signed the agreement on behalf of his company as the contractor, while Everson Chatambudza signed on behalf of Better Brands, referred to as the partner.

The parties agreed that Better Brands would remain in the shadows as it will engage the electoral body behind-the-scenes, with Ren-Form formally engaging Zec, but in the process factoring in hidden individuals and costs, thus inflating the prices.

"The contractor will act as the prime contractor and will prepare and submit the proposal.
The contractor will be the point of the contact to the customer and will own the overall customer relationship and satisfaction," the agreement says.

"The contractor shall offer the best available pricing to the partner, which is market related, and the partner shall be entitled to add a mark-up and/or service fees and or commission as applicable to the pricing provided and which the contractor shall present to Zec," the agreement says.

"An addendum to this agreement shall be created by the contractor for each bid to Zec, detailing the pricing and all the commissions, fees and mark-ups payable by the contractor to the partner and shall be signed by the parties.

"The proposal will be prepared by the contractor who will designate a representative and will act as the leader for the proposal.

"The partner agrees to provide the necessary liaison effort with Zec to allow the contractor to draft and write the proposal that describes the requirements and provides the necessary solution for Zec and thus to submit the most responsible proposal practicable."

The agreement itself shows Better Brands Security's role is shadowy, suggesting an intention for corruption.

There is inherently mens rea - criminal intent or guilty mind - in the agreement and hidden clauses.

Investigations by The NewsHawks show that the Zec deal had hidden parties, high-profile individuals, and costs in it.

A number of names of top government officials and Zec executives surfaced as the corporate veil covering hidden beneficiaries was pierced.

There was also name-dropping, with Mnangagwa's name cropping up as Chivayo and others suggested he was involved, either telling the truth or leveraging his stature and public office to secure the deal and the money.

Investigations also show the true parties involved were not fully disclosed or were hidden behind shell companies, intermediaries and in the shadows.

So the actual costs or terms of the agreement were not transparent;  concealed from some officials of the contracting authority, Zec, or other stakeholders in government and non-state actors.

This lack of transparency in the Zec deal inevitably led to corruption and bribery, conflict of interest, overpricing or inflated costs, uncompetitive tendering, breach of procurement regulations, fraud, collusion, lack of accountability, and  money laundering or other illicit activities.

The Zec deal - a gigantic feast for Chivayo - is all those things or acts of malfeasance rolled in one.

The use of Better Brands Security behind the scenes was designed to conceal some individuals and officials involved in the background, including intermediaries or agents distributing undisclosed commissions or fees.

This explains why there were mark-ups or inflated prices for voting materials, with extortionate price escalations by up to 235% in some cases.

The NewsHawks also ascertained that there were undisclosed relationships between Zec as the contracting party and Ren-Form executives as well as government officials.

The main agreement overlay secret side deals and appendices which were not disclosed to all parties, as suggested by the mutual agreement that Better Brands should be under the radar, while secretly engaging Zec.

The NewsHawks found that Zec did not even do due diligence, did nothing to ensure transparency and accountability, or to implement robust procurement procedures and oversight mechanisms.

The final invoice contained procurement market price and then extra fees to cover "cuts", bribes and kickbacks for those who played different roles behind the scenes.

Put differently, the Zec tender was steeped in patronage, cronyism and influence peddling - all amounting to corruption.

In cahoots with Ren-Form officials, Chivayo later fraudulently amended the agreement to remove his fellow business partners and grabbed the money for himself, 66% of the payments, a letter of complaint by Chimombe and Mpofu says.

The parties agreed that Ren-Form would invoice and receive payments from Zec, before depositing Better Brands' portion into a South African bank account.

Payments are made into South African bank accounts, for instance First National Bank, (Sandton branch), or Standard Bank account number 002742659, (Southdale branch), hence allowing the parties to move their funds across the borders, breaching Zimbabwean and South African anti-money laundering and banking regulations in the process.

The payments, paid outside the country to avoid local scrutiny, violate Zimbabwe's Money Laundering and Proceeds of Crime Act.

Similarly, they breach South Africa's anti-money laundering laws to the extent that they seek to conceal the source of funds.

Anti-money laundering requirements in South Africa are primarily governed by the Financial Intelligence Centre Act of 2001, which has undergone subsequent amendments to strengthen its provisions.

Financial crimes are transnational in nature, as illicit flows of money take place across borders.

The proposal for the supply of biometric kits from Ren-Form to Zec - addressed to Chigumba - had following payment terms: 50% with order, 35% on delivery of kits to Harare and 15% on project approval and sign-off.

Ren-Form subsequently sent an invoice dated 28 October 2023 for 50% down or advance payment of the contract value.

It was dispatched to the Office of the President quoting US$19 957 301 (total US$39 914 602) for actioning.

Documents also show the ministry of Finance directed the Reserve Bank of Zimbabwe (RBZ) and CBZ Bank to make payments to Ren-Form for its services.

The NewsHawks also unearthed several invoices sent to Zec and the Office of the President between March 2023 and March this year.

The government made payments to Ren-Form which have now overlapped into this year.
The payments were made after requests from the ministry of Finance either to the RBZ or CBZ.

For instance, a payment of US$8 964 603 was made after a directive from the ministry on 4 April 2023 to settle an invoice issued on 3 March.

The ministry also issued directives for the payments of US$2 145 000 on 5 May 2023, US$3 544 526 on 5 June 2023, US$4 128 500 on 27 July 2003, US$5 million on 1 February 2024, US$3 946 626.50 on 9 February, US$5 731 979 on 27 February and US$4 989 325 on 8 March.

In a bid to get a lion's share of the money, Chivayo connived with Ren-Form officials to change the agreement and payment terms.

Documents show Chivayo backstabbed his partners in collusion with Ren-Form executives to change the agreement and pay the money into a separate account for immediate transfer to his account.

This grand heist has left Chimombe, a businessman and Zanu-PF activist who is as controversial as Chivayo, and Mpofu livid.

Chimombe and Mpofu on 24 April 2024 wrote to Ren-Form registering serious displeasure over the alleged breach of contract.

They also revealed that the amount being paid to Ren-Form was inflated by up to 235%, with the South African company paying Chivhayo 66% of the invoice fees on some transactions.

Chimombe and Mpofu complained bitterly that Ren-Form had violated the agreement reached on 13 February following two meetings in Johannesburg on 2 February.

"After we signed the contract under Better Brands, you conspired with one of our partners in the project, Mr Wicknell Chivayo, and unilaterally changed the contract to his company, Intratrek. Our agreement stated that you would pay our agreed commission into the FNB account for Better Brands," Chimombe and Mpofu say in their letter.

"However, for reasons known to you, you decided to cancel our agreement without consent of both parties. The cancellation of that agreement was fraudulently done. We have attempted to engage with you on several times, but you have chosen to continue making payments to Mr. Wicknell Chivayo.

"In this letter, we are writing to you in confidence to find a settlement. We will attach some of the proof of payments from the Zimbabwe government treasury department.

"We have the invoice you have charged Zec and are aware of the profits being made.

"For example, we are in possession of the initial quotation dated 20th of February 2023, valued at US$2 673 360.00 with quotation no.Q20022023_211.

 "Additionally, we have the subsequent quotation that you sent to Zec, with the value inflated to US$8 964 603.80, which is approximately a 235% increment.

"We are aware that as soon as funds are received into your Standard Bank account number 002742659 held at Southdale Branch, you immediately transfer more than 66% of the money received to Wicknell Chivayo's Intratrek bank accounts.

"This is clear evidence of your participation in money laundering, where you are overcharging the government of Zimbabwe and sending the overcharged money to individual accounts. This is in violation of South African laws and international laws."

The contract states that the money was supposed to be paid into Better Brands' First National Bank account in Sandton.

Chimombe and Mpofu say Chivayo betrayed them as they were supposed to receive 25% of the money being paid to him.

"This money has driven him crazy and that's why, if you check his social media, he is on a buying spree of cars, donating to different individuals across the country, yet he is failing to pay us what we agreed," they wrote.

The two suggested that the company should hold  all incoming payments to Chivayo until the matter is resolved.

"We urge you to consider the repercussions of your actions carefully. Your continued involvement in these fraudulent activities will not only damage your reputation but also put your company at significant risk of legal repercussions," they said.

"We could have gone through our lawyers and sought relief from the court, but we prefer not to air our dirty laundry in public."

Chivayo has been flaunting his wealth and splurging money like confetti at a wedding with reckless abandon on social media.

He has been buying cars for individuals for free and recently acquired a house in Gletwyn, Chishawasha Hills, Harare.

The cars are worth about US$3 million and have been dished out to Zanu-PF-aligned musicians, prominent individuals and members of his church, leaving many people asking where he is getting the money from.

As The NewsHawks investigation shows on this Zec contract, Chivayo gets his money from state procurement deals.

Chivayo's contract with local power utility Zesa, through its subsidiary Zimbabwe Power Company, is valued S$172 848 597.

The deal, dating back to 2015, has been characterised by charges of corruption.
There has been a fight over US$5 607 814.24 released in advance to Intratrek for the 100MW Gwanda Solar Project stalled by Chivayo's failure to deliver, arrest and prosecution.

Chivayo and his company were  charged with four counts of fraud, money laundering, and violation of exchange control regulations upon his arrest in 2018.

He was eventually acquitted. Chivayo leverages his proximity to power to make money.
These days he is always with Mnangagwa, including last weekend at his farm in Kwekwe.

After his visit to the President's Precabe Farm in Sherwood, Kwekwe, last weekend, Chivayo this weeked got another massive deal to partner high-speed satellite internet service provider Starlink, run by the world's richest man Elon Musk, through his shadowy company IMC Communications located at No. 53 Samora Machel Avenue at Karigamombe Centre.

Mnangagwa announced the licensing approval of Starlink in Zimbabwe, while also making it clear that Chivayo's dodgy company, IMC Communications, has got the deal - a brazen case of crony capitalism.

Efforts to get comment from Chivayo were unsuccessful as he read messages and did not reply. He also did not pick up calls for days.

Chimombe also ignored repeated calls and messages to engage on the issue.

Zec and Ren-Form executives were also not available to comment on the issue for days.


Source - newshawks
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