CFX Bank is facing US$350 000 fraud charges arising from a transaction by a local company for the supply of agricultural equipment from abroad.
Regional magistrate Mr William Bhila is expected to pass judgment on November 3 after the bank closed its defence on Tuesday.
The State is pressing fraud charges against the bank in a transaction involving RTO Engineering which had approached the financial institution to source foreign currency to buy agricultural equipment and spare parts. The equipment was for the Government Mechanisation Programme run under the auspices of the Reserve Bank of Zimbabwe last year.
It is the State case that after RTO Engineering had been allocated Z$16,1 trillion for the programme in March last year, it approached several banks seeking the foreign currency to pay for the agricultural machinery. It emerged that CFX Bank had some free funds to offer and after some consultations, RTO Engineering transferred the Z$16,1 trillion into the CFX Bank Treasury account.
The company also gave the bank three invoices from the foreign suppliers of the agricultural equipment Marchesan Implementos of Brazil, V Fernandez and MG Hamill of England with a total value of US$350 000.
A week later, RTO Engineering received some swift transfer copies from CFX Bank as confirmation that the bank had processed the payments to the three foreign suppliers. On receipt of these confirmations, RTO Engineering faxed them to the suppliers to enable them to start packaging the equipment pending deposit of the funds into their foreign bank accounts.
Working on the value dates indicated on the swift transfer confirmations, nothing came through to the suppliers who then advised RTO Engineering that their confirmations were not genuine. The company then contacted CFX Bank and their then treasury director Washington Chidziwo who at first maintained that the transmissions were genuine, later admitted that they were dummies. In court, Chidziwo admitted that the bank was involved in parallel market activities.
Despite assurances that the bank would resolve the issue, nothing came out resulting in RTO Engineering reporting the matter to the police.
Police investigations later revealed that after CFX Bank received the Z$16,1 trillion from MBCA Bank, it transferred it into the accounts of seven beneficiaries without the knowledge of RTO Engineering. And at the time that the bank generated the alleged dummy swift transfers, the funds had already been transferred to the seven beneficiaries.
The bank in its defence maintains that it got instructions from a Paradzai Chakona to transfer the money to the named beneficiaries. Chakona who testified for the bank, was unknown to RTO Engineering.
CFX is being accused of misrepresentation to RTO Engineering in that they had made payments to foreign suppliers through dummy swift transfers well knowing that they had already transferred the funds to beneficiaries unknown to RTO Engineering.
The State led by Mr Obi Mabahwana called six witnesses including Chidziwo.
In its defence, CFX Bank represented by Mr Addington Chinake of Kantor and Immerman pleaded not guilty to the fraud charges. The bank said that it could not be held liable for the unlawful and illegal transfers that formed the basis of the case.
It is the bank’s contention that the transaction between RTO Engineering and other third parties were illegal and the company should seek recovery of the disputed funds from one Muneer Kazi and Chakona.
Chidziwo testified that the Z$16,1 trillion had come from Chakona. On the swift transfers, Chidziwo told the court that these were generated from details supplied by Muneer Kazi who later gave instructions to cancel them. Source: TH