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criteria procedures.
Mr Tichaona Muhonde was testifying during the trial of Core Mining director Lovemore Kurotwi and former ZMDC chief executive Dominic Mubaiwa.
The two are accused of defrauding Government of US$2 billion in a diamond mining deal.
“To my recollection the investor criteria was not complied with fully. Core Mining and first accused person (Kurotwi) were taken to approved investor status,” said Mr Muhonde a former ZMDC company secretary and legal advisor.
“I will underscore that this did not only apply to Core Mining but other diamond investors.”
ZMDC, he said, had to follow internal procedures such as evaluation of an investor, filing of expression of intent and non disclosure agreement to determine the financial capability of an investor.
He said Core Mining and New Reclamation Group had been referred to the ZMDC by the Ministry of Mines as Government approved investors.
Mr Muhonde said submissions of directorship and shareholding profile, non-disclosure agreement among other requirements were only done later in August 2009 after the joint venture agreements were already signed in July 2009.
“Evaluation process was short circuited and shortened because of their approval status. It was consequential,” he said.
“The board and technical committee insisted on the due diligence exercise notwithstanding the Ministry’s (Mines and Mining Development) position that they were approved investors.”
Mr Muhonde also said ZMDC was working under extreme pressure from the Ministry of Mines.
“Government was becoming impatient so we were told by ZMDC delay to find investors for Marange . . . there was this perceived failure to find investors by the ZMDC.
“Against this background as ZMDC we treated matters accordingly because we had requirements to comply with,” he said.
He said BSGR had pulled out of the joint venture as early as May 2009 when their conditions were not fulfilled and a deal was signed with Core Mining.
Mr Muhonde dismissed claims that he was paid to testify in the trial.
“I was shocked to read in newspapers that I was paid to be a witness. I was angered by the reports,” he said adding that he resigned from ZMDC through a mutual termination of employment following some acrimonious relations with his employer.
Under cross examination by defence lawyer Ms Beatrice Mtetwa, Mr Muhonde said that there was no actual prejudice suffered by the State since the US$2 billion investment was to be accrued over years.
He also said the ZMDC was not involved in the implementation of the joint venture between Marange Resources and Core Mining.
Justice Chinembiri Bhunu asked Mr Muhonde if he was aware he was arrested and jointly charged with Kurotwi and Mubaiwa.
He said he was not aware and was surprised of his arrest. The trial continues on July 2 with 11 more witnesses expected to testify.
Online Reporter