adminchairman, Mr Godwills Masimirembwa, said Zimbabwe lost US$2 billion investment because the Core Mining and Marange Resources diamond mining venture excluded the principal investor Benny Steinmeitz Group Resources.
Mr Masimirembwa said this during re-examination by chief law officer Mr Chris Mutangadura in the on-going trial of Core Mining director Lovemore Kurotwi and former ZMDC chief executive Dominic Mubaiwa.
The duo is accused of defrauding Government of US$2 billion in 2009.
Kurotwi is alleged to have claimed to Government that BSGR was the guarantor in a joint venture agreement with Core Mining and ZMDC while Mubaiwa unlawfully prepared and entered into an unapproved agreement between Marange Resources and Core Mining.
“Zimbabwe lost the investment of US$2 billion which the BSGR was prepared to bring into the country,” said Mr Masimirembwa.
“It also lost the initial US$200 million capital injection that BSGR was prepared to pay upon the signing of the joint venture agreement.
“That joint investment was lost because the joint venture agreement which was concluded excluded the BSGR Group not withstanding the clear authority and directive from the Government that BSGR Group was the investor and had to guarantee obligations of Core Mining.”
Asked by presiding judge Justice Chinembiri Bhunu to explain if the loss to Government was potential or actual, Mr Masimirembwa said:
“It would be potential My Lord because we remain with the resources but struggle to exploit it because of no availability of investors.”
Justice Chinembiri Bhunu further asked Mr Masimirembwa to explain the prejudice that Government suffered because of the failure of the deal.
Mr Masimirembwa said the prejudice arose because the “specific concession” was awarded to Core Mining, a struggling company owned by Kurotwi, which was failing to bring investment into Zimbabwe.
When asked why BSGR was not re-engaged, Mr Masimirembwa said the firm was no longer available to Zimbabwe as an investor.
“Re-engaging BSGR does not mean they will come on board because of the reputation of the ZMDC of engaging in a faithful manner was shattered by accused one (Kurotwi) and two (Mubaiwa),” he said.
Earlier on defence lawyer Ms Beatrice Mtetwa quizzed Mr Masimirembwa on the alleged prejudice. The witnesses said ZMDC lost in terms of the business plan and failed to conduct exploration and geological work.
Mr Masimirembwa was also asked how the Canadile joint venture declared a dividend when it was not performing.
He said it was a dividend declared from a “paltry US$11 million investment”.
The diamond mining and exploration, Mr Masimirembwa said was capital intensive and Marange Resources was surviving on “hand to mouth”.
He said the Marange diamond project required huge investors.
‘The income base is not sufficient to raise enough money to invest in serious exploration, which the BSGR investment would have achieved,” he said.
Mr Masimirembwa dismissed claims that former ZMDC company secretary and legal advisor Mr Tichaona Muhonde was paid off to testify against Kurotwi and Mubaiwa.
“It’s clear that what Mr Muhonde was paid is a terminal package considering his length of service. It is customary terminal benefits given to employees when an employment contract is severed,” he said.
The defence accused Mr Masimirembwa of not carrying out thorough investigations saying he did not establish the nationality of the Israeli investor, a claim he dismissed.
He had been asked if he established the nationality of Mr Benny Steinmeitz, owner of BSGR, who is listed by the Forbes Magazine as the third wealthiest man from Israel with an empire valued at US$5,9 billion.
The trial continues on May 30.
Online Reporter