Zimbabwe News and Internet Radio

Air Zimbabwe bosses looted US$11m

HARARE – A forensic audit report on Air Zimbabwe’s aviation insurance has implicated senior managers in the looting of nearly US$11 million over a four-year period between 2009 and 2013. 

The Air Zimbabwe CEO when Navistar was roped in, Dr Peter Chikumba, told the auditors that he had never approved the deal
The Air Zimbabwe CEO when Navistar was roped in, Dr Peter Chikumba, told the auditors that he had never approved the deal

The report, compiled by BCA Forensic Audit Services and which was released as far back as December 28, 2013, exposed the industrial scale corruption at the national carrier and recommended the criminal prosecution of senior managers.

So far no arrests have been made.

It’s alleged that AirZim (Private) Limited acting managing director, Grace Pfumbidzayi, who was suspended last year, authorised “fraudulent” payments to Navistar Insurance Brokers, a firm given the contract without going to tender.

The Air Zim fleet, which has eight planes, is insured for US$750 million per aircraft per incident, but for a period of about two months in early 2009, its planes took to the skies without any insurance after Navistar, received but failed to remit the premiums.

“Grace Pfumbidzayi appears to have connived with Navistar and executed transactions which according to available evidence are fraudulent,” the auditors said.

“The transactions resulted in the airline losing material amounts of foreign currency… On the basis of the available evidence, Grace Pfumbidzayi and Innocent Makore (acting group chief executive officer) who are senior employees of the airline appear to have acted in cahoots with Navistar Insurance Brokers resulting in the airline being prejudiced of a total of 5,895,695.49 euros (about $8.1 million) and $1,298,827.88 which amounts were paid out to Navistar by Air Zimbabwe allegedly for services rendered which services are not supported by any documentation from Navistar other than the debit notes (invoices) from Navistar.

“The investigation also established that the airline was exposed to a potential prejudice of $1,862,370.52 being a total for which paper trail which appear fraudulent were prepared, and had it not been for this investigation the amount was going to be paid to Navistar by the airline.”

The company who served Air Zimbabwe before March, 2009, Marsh Insurance Brokers,  charged an average of 125,000 euros (about $171,000) per annum as brokerage fees. Navistar, however, was paid 300,000 euros (about $410,000) per quarter, translating to 1.2 million euros (about $1.6 million) annually – nearly ten times what Marsh was charging.

“While the amount which was being charged to Air Zimbabwe by Navistar Insurance Brokers increased by 86 percent, the premiums charged by the international reinsurers remained more or less constant … The charges have been described by many of Air Zimbabwe’s current and former executives as fraudulent, a position which is supported by findings of this investigation,” BCA says.

“In addition to paying a fraudulent flat broker’s fee of 300,000 euros per quarter for the period April 4, 2009, to April 3, 2013, some of Air Zimbabwe’s executives made several other fraudulent payments to Navistar Insurance Brokers, which resulted in the airline suffering actual financial prejudice of 5,895,695.49 euros and US$1,298,827.88 and potential financial prejudice of US$2,227,570.22…”

While Navistar was taking the 300,000 euros per quarter payments from Air Zimbabwe, it was also taking commission from Air Zimbabwe’s insurers in the United Kingdom.

The Air Zimbabwe CEO when Navistar was roped in, Dr Peter Chikumba, told the auditors that he had never approved the deal — which is not supported by any standard legal contract — and BCA concludes that Pfumbidzayi entered into the arrangement by herself.

Working with other senior managers, Pfumbidzayi actively pushed through the payments to Navistar. Once, when there was a delay of a US$305,000 payment to Navistar, Munesu Munodawafa, who is Pfumbidzayi’s uncle and a former managing director of the National Railways of Zimbabwe (NRZ), wrote to Air Zimbabwe asking them to expedite the payment.

The auditors concluded: “Consideration should be made not to involve Munodawafa in decisions to be made in connection with issues arising from this investigation as he is conflicted…

“During the course of the investigation, we held a meeting with Munodawafa in which meeting he expressed his view that the payments of 300,000 euros per quarter by Air Zimbabwe to Navistar are not fraudulent.

“All other executives of Air Zimbabwe (including the former group chief executive officer Dr Peter Chikumba) with the exception of Grace Pfumbidzayi accepted that the payments of 300,000 euros per quarter were baseless and fraudulent.”

The Transport Secretary — who was a principal director at Vice President Joyce Mujuru’s Office between 2008 and 2012 — also stands accused of on three occasions failing to assist BCA in getting Zinara, which also falls under his brief, to explain suspicious payments it has made on behalf of Air Zimbabwe.

In several cases, money transmitted to Navistar was supposed to be forwarded to international insurers. However, there is a disparity of millions of euros between what the international insurers actually charged and what Navistar received from Air Zimbabwe.

BCA concludes that the difference was converted to personal use by management at Air Zimbabwe or Navistar or both.

Navistar board chair, Patrick Chingoka, told BCA he was not aware of the payments and recommended that criminal proceedings be instituted against management at the insurance brokerage firm.

BCA says it identified possible criminal acts and calls for police investigations targeting the airline’s former CEO Innocent Mavhunga, Pfumbidzayi, Nicholas Mujere (Air Zim acting general manager), Norbert Machingauta (Air Zim strategy and economic manager), Patience Tichagwa (Air Zim finance and administration manager), Oswell Matore (former Air Zim finance and corporate services general manager), Givemore Nderere (Navistar managing director), Vukile Hlupo (Navistar director) and Orton Mawire (Navistar finance director and company secretary).

Pfumbidzayi, BCA says, on several occasions tried to justify payments to Navistar by claiming the airline was trying to “bust sanctions”.

However, Air Zimbabwe was not under sanctions and insurance companies interviewed by BCA said they could not comprehend how the economic embargo could have interfered with the insurance sector and the national carrier.

The forensic report also reveals how Pfumbidzayi authorised a payment of US$360,448 to Navistar for insurance cover for two Airbus planes leased by Air Zimbabwe – in the full knowledge that they were already insured by the lessor.

The report also reveals how Zimre, now BaobabRe, took US$422,304.56 from Air Zimbabwe but failed to remit it to Willis Limited, Air Zimbabwe’s International Insurance broker, resulting in Air Zimbabwe’s insurance cover being cancelled.

“On the basis of available evidence, it appears to us that during the period February 1, 2009 to March 31, 2009, Air Zimbabwe was flying with no aviation insurance cover as the underlying risk carriers cancelled the cover,” the auditors said.

“The premium in question was also not refunded to Air Zimbabwe.”

The auditors also accused Navistar of “theft by conversion” over payments for the hanger property by Air Zimbabwe totalling US$796,079.80.

“The premiums were not remitted by Navistar to the insurer resulting in the airline suffering a double exposure as they lost the US$796,079.80 at the same time as its hangar property were not insured for the period April 2009 to March 2013 as no payments were made to the insurer in respect of the premiums.”

In that scam, the auditors said Navistar would, at the beginning of every year, approach Altfin Insurance Company and request for policy documents for Air Zimbabwe’s hangar property.

“We understand that Tafadzwa Nderere who is employed by Altfin would print policy documents and release them to Navistar. We understand that Tafadzwa Nderere is Givemore Nderere’s brother [CEO of Navistar].”

Armed with the policy document, Navistar would surrender it to Air Zimbabwe together with their debit note for the annual premium of US$205,000 – but no premiums would be forwarded to Altfin and consequently no insurance existed.

  • bobsled

    If anyone was not convinced of Zanu PF graft and graft and incompetence this is another convincing narrative to that effect. Pane here bazi rehurumende rakatasanuka? Where are the politicians charged with the responsibility to protect our resources? Basa ndoremaslogan and consolidating positions by hook and crook…

  • Sithu

    This is nothing more than jealousy and hypocrisy of the West and their allies attempting to justify their illegal filthy sanctions on our tender and loving country. When the big financial institutions of the West take funds from people nothing is said about it. When Zimbabweans use these same business strategies, it is deemed corruption. Since when is corruption a bad thing? It is a standard business strategy in use globally. We are supreme when it comes to our business strategies and we are untouchable and proud of it. Long live our legends and icons of our business world in Zimbabwe.

    • manzoni

      What? Panevanhu here?

    • Chiredzisister

      The way you are defending this corruption I can see that you are related to one of the looters and you have benefited from it or you own that insurance company. Your arguments are baseless. You should be ashamed of yourself for uttering this rubbish.

      • Timex007

        Yes, I agree. This Sithu fellow must surely be one of the looters or closely related to one of the looters. How can someone justify such shameless acts of theft and corruption.

      • inini1545

        You are missing the point, sithu is being satirical, I noticed this style of writing eludes you. Open your mind and explore other ways other than the conventional writing style which is rather cumbersome.

        • bravery

          Hmm, if it’s an attempt at satire then he failed miserably. It makes more sense to view what he’s saying as what he actually meant. To that end, he’s a thief, just.like them in this article

      • CHARLIE

        Chiredzisister u are right the eat from the same plate manje its gona come out we are going to sale yo properties to recover our money


      How serious are u man mr sithu

  • Cafe Wha

    Grace Pfumbidzayi started at UM as a flight attendant. She did some studies ending up as coperation secretary. How she became CEO, I have no clue. Corruption at Air Zim is rampant. Viscount aircraft spares disappeared from UM stores without a trace. There was massive corruption in the purchasing department. Heads should roll and people should be prosecuted for letting Air Zim take to the sky without insurance cover.
    In Zim the gravy trains are the parastatals and quassi government departments as proof from Zbc, Psmas and Nrz.

    • Timex007

      Someone here says that they still remember the disappearance of the Viscount aircraft engines and other spare parts that were also “conveniently mixed” with some Boeing 707 / 737 parts still needed by the national airline.


      I think the responsible ministers and permsec should be fired as well how can they let this rot happen under them

  • Dex Stocker

    I think the corruption has been on going a long, long time, maybe it has got bigger, maybe they just got caught.
    I recall when I was a Traffic Officer the rumours over the purchase of the Viscount 800’s. One of which never flew (as I recall). That was when senior management was all white.
    I can also remember the former Asst. Traffic Manager, Joe Shalovsky’s deputy leaving AirZim and being got up in some fraud at Zisco concerning a soccer teams transport.
    I was audited when Station Officer Kariba as I could not account for constant shortages. I found out after leaving UM that the young white Traffic Assistant was rading the takings on my off days and somehow covering her tracks. The auditor gave me a clean sheet from a personal perspective. The same young lady I discovered went to work for a Kapaenta rig owner. She house sat for him whilst he was on extended leave and when he returned there she had disappeared along with all his furniture!

    • Timex007

      Interesting insight there, Dex Stocker. As I see it, the root cause of the spread of corruption is the fact that culprits do not get punished or even where they get punished it’s not enough to deter others. And when others see perpetrators of corruption walk scot-free, others often say, “Why not, when others get away with it?” I’ve known the lady mentioned in the Air Zim corruption case above, since the early 80s. What a sweet, sociable, beautiful and intelligent young lady she was in school and as an air hostess too. I still recall how everyone admired her when she took study leave to further her education at the local varsity and came back to work in the legal department at the national airline. I often wonder what the purpose of education is when the so-called educated ones rank high among the most corrupt and greedy ones.

  • Promise

    If the insurance company charged $171 000 per year, this translates to $42 750 per quarter. The insurance company was however paid $410 000 instead of $42 750 per quarter! The magnitude of this theft is as obscene as that of Cuthbert Dube! Kuba sa Cuthbert Dube!

  • TBlaze

    I personally am happy that Dr. Peter Chikumba was not a part of the scandals and his subordinates acted against his directives. I like his ideas that he kept sharing about the vision he had for air zim and the business sector in general (not in the article). I can safely say he is a man of integrity who believes in serving GOD and his country because I know him.

    • Timex007

      Ummmh before you go too far TBlaze, I suggest you do a Google or general internet search based on the following phrase: “Peter Chikumba Air Namibia Gambia”

    • Cafe Wha

      You don’t know this man who used to be called “short cat”. Some of the rot transpired under his watch.

  • Onslo Mukundi

    Looting time…

    Matibili is sleeping…. Alooter continua?

  • truth

    How can the country develop and progress when corruption becomes part of culture

  • Cde Tichatongawo

    I am surprised that no arrests have been made yet with such clear blow by blow account of how the national carrier was fleeced of millions. Kana vanhu vachida havo action can be taken. Happyson is gone, today Cuthbert atevera so why are these brazen culprits still walking. Some power that be must be eating with them. I bet my sorry black ass havana zvavanoitwa vanhu ava.

  • riman09

    This long peddled lie that Zimbabwe is, or has been under sanctions [except for the year under Ian Smith] has finally been exposed.

    Now even fraudsters use it to commit massive embezzlement.

  • igwe

    This type of blatant looting calls for a death sentence, no amount of jail time will ever be commensurate with such crimes, we no longer have a national airline to talk about thanks to these imbecile criminals, we need to get lessons from our erstwhile Chinese friends…

  • vortex zimbabwe

    This of course is all part of the governments policy of looting the country without impunity. The theft of copper wire, kilometres of it along the railway line is a case in point – ha talk of responsible government – that’s what Ian Smith spoke of decades ago. He said I told you so”11