RBZ seeks immunity to avoid repaying millions in looted forex

By Nomalanga Moyo

The Reserve Bank of Zimbabwe (RBZ) has appealed for immunity from prosecution as it seeks to dodge repaying millions of dollars it seized from foreign currency account holders during the height of the economic meltdown in 2007. 

The appeal which is before the Supreme Court, follows an order issued by a lower court in June compelling the RBZ to return $1 million it seized from Trojan Nickel Mine.

In October 2007, RBZ governor Gideon Gono moved control of all foreign currency accounts to the central bank.

This ‘centralisation’ proved to be an excuse for the central bank to seize billions of dollars kept by other banks and authorised forex dealers, on behalf of companies and non-governmental organisations.

Gono said the move was meant to prevent the total economic collapse following years of ruinous policies and ZANU PF corruption and mismanagement.

During the period Trojan Nickel Mine, which had an account with BancABC, lost over a million dollars to the RBZ, which the miner is reclaiming through the courts.

In June the High Court ruled in favour of Trojan Mine, despite efforts by the RBZ to distance itself from the firm, citing an absence of a contract. The central bank argued that Trojan Mine should direct its claim to BancABC.

In his decision, Justice Nicholas Mathonsi said the RBZ could not hide behind the proverbial finger, and must pay back.

But determined not to pay and perhaps fearing a floodgate of lawsuits from entities whose funds were similarly looted, the central bank now says it has found evidence proving that it is immune from prosecution.

At a hearing Thursday, RBZ lawyer Linos Mazonde told the Supreme Court that his client had acted in good faith and therefore must be immune to litigation, citing sections of the General Laws Amendment Act. The lawyer asked for more time to furnish the court with this ‘evidence’.

However, observers say the RBZ is coming up with all these excuses when it is obvious that it just does not have the funds to pay back what it owes. Economic analyst Masimba Kuchera said it was shocking that the central bank was seeking to use the law to abdicate its responsibility.

“For them to say BanABC or any other bank should be held responsible for the looted funds is shocking since the RBZ, as the financial services regulator, issued the directive to banks to surrender clients’ funds.

“The governor then used these to fund the quasi-fiscal activities that kept the regime afloat at the time. For them to try to seek recourse to the law for something which was illegal in the first place is shocking.

“It does not matter that the RBZ did not have a contract with Trojan Mine, the fact is that they issued the directive to the banks and expropriated other people’s funds which they converted to their own use,” Kuchera said.

Kuchera added that by trying to avoid paying back, the RBZ was demonstrating the culture of dishonesty that has come to be associated with the current government.

“And this does not inspire any confidence in anyone seeking to invest in the economy. What it means is that even local investors will not be keen to use normal banking channels for fear that their funds will be expropriated,” Kuchera said.

The Zimbabwe Aids Network (ZAN) is one of several donor funded organisations that lost more than $500,000 from Standard Chartered (Stanchart) Bank after the financial institution was forced to transfer the money to RBZ.

Despite suing both banks ZAN has received nothing, with the RBZ denying that it directed Stanchart to carry out the transaction. SW Radio Africa