Ten million dollar insurance scam exposed at Air Zim

An Air Zimbabwe insurance scam has netted about $10 million for senior staff according to a financial audit

SW Radio Africa
By Tererai Karimakwenda
27 January 2014

A financial audit company, hired by new management at Air Zimbabwe, has uncovered an insurance scam that netted about $10 million for senior staff, according to the state-owned Herald newspaper.

The report alleges that Air Zim’s company secretary, Grace Pfumbidzayi, authorised fraudulent payments to Navistar Insurance Brokers in a four-year aviation insurance scam.

Pfumbidzayi is alleged to have acted in cahoots with Air Zim’s acting group chief executive officer Innocent Makore. and together they are accused of having prejudiced the company of millions of dollars. Other senior staff members have also been implicated.

The money was allegedly paid out to Navistar “for services rendered”, and invoices were provided, but no services were rendered.

The Secretary for Transport and Infrastructural Development, Munesu Munodawafa, is also alleged to have acted to protect Pfumbidzayi, who is said to be his niece. But Munodawafa is not named as a beneficiary of the scam.

The audit report, dated December 28th 2013, was compiled by BCA Forensic Audit Services after a new board at Air Zim became suspicious of insurance premium payments made between April 2009 and April 2013.

According to the Herald, Pfumbidzayi switched insurers in that period and ditched Marsh Insurance brokers for Navistar, who then charged nearly 10 times what Marsh had been charging for insurance. In addition, the switch by Pfumbidzayi was done “unprocedurally, illegally and in violation of the tender procedures”.

The BCA auditors are reported to have described some of the payments made to Navistar as “outrageous” and recommended that those involved be prosecuted. They also suggested that President Robert Mugabe be informed of the scam, “due to its magnitude”.

The former Mayor of Harare and MDC-T shadow Minister for Transport, Elias Mudzuri, told SW Radio Africa that he was shocked at the magnitude of the theft at Air Zim, as it almost equalled the budget of an entire ministry.

“Sometimes you think that civil servants are professionals who are there to serve the nation. But this shows that some of these people at parastatals are there to milk the companies instead of making them run. But these people never get arrested. Instead it’s the small criminals that are prosecuted,” Mudzuri said.

He explained that in Zimbabwe there exists a culture of not holding public officials accountable for their actions. This is how they are able to get away with stealing millions and not be prosecuted.

Mudzuri added: “There is no order and I always get annoyed when people cry about corruption but they are doing nothing to ensure there is proper accountability and transparency. Look at ZBC and the Medical Society where all MPs get insured.”

Mudzuri was referring to recent revelations that Cuthbert Dube, a senior manager at the Premier Medical Aid Society, was receiving a monthly salary of over $200,000. Exorbitant salaries for senior staff were also exposed at the state-broadcaster, ZBC. Both institutions are owned by government.

Mudzuri said: “The chief executives of these companies have to answer for what is happening. It is their duty to make sure the blood of the institution runs. And government should do something to make sure that all these parastatals are accountable.”

According to the Herald, Navistar chairman Patrick Chingoka told the auditors that he was not aware of the fraudulent payments made to the company and recommended a criminal investigation into dealings by management at the insurance company.

In 2013, Air Zim dealt with a series of strikes by staff who were demanding better wages and working conditions. The national airline also faced massive debts and had an airplane impounded by creditors in London. The insurance scam deals a further blow to the company at a time when government is trying to lure tourists back to the country.

4 Responsesto “Ten million dollar insurance scam exposed at Air Zim”

  1. mike hondo says:

    this is just the tip of a very big iceberg and all zimbabweans know that that all the zanu pf mujibas in charge of government parastatals are on the fiddle big time, the problem here is that the lack of a a decent local airline is strangling all zimbabweans in a much bigger way than any sanctions ever could, and even the diaspora who want to visit their relatives cant do so because we have to suffer long stop overs in countries and sit at airport runways for many wasted hours even before you arrive in harare where you will be picked on by greedy customs and immigration people who are also stooges and sellouts with their noses in the trough thanks to zanu pf who have filled these posts with incompetent relatives and girlfriends who are all making their little scams in every corner of the airports and dont even start me off on the flight attendants and crew.We in the diapora just choose to avoid zimbabwe and travel to countries where we are treated like human beings when in transit and not like suspected enemy agents and spys. someone needs to sort out this mess its a national disGRACE
    You wonder why there is no forex in the country its because everyone gives airzim , the zimbabwean airports a very wide berth.These thieves and fraudsters should be made an example of and they should be strung up for the crimes and destuction they have caused zimbabweans

    • Chimbwido Warvet says:

      Thanks Mike Hondo for telling us about this rot. I will make sure next time you come to Zimbabwe that you have a good time. I will ensure these fat cats are brought to book for the diaspora guys to go through without following immigration formalities which are a bit tedious and unduly monotonous for you. You will not even pay tax as a returning diaspora/resident.

      • mike hondo says:

        Excellent news! see i knew deep down you are really a nice chap! with all zimbabweans interest at heart. i like this new style of politics lets just hope for real change as in europe we have open borders can you ever imagine open borders in zimbabwe or in africa as a whole so us africans can be truly free

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