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PSMAS CEO Farai Muchena, 3 others Steals US$700k To Buy Gold

Four Premier Service Medical Aid Society (PSMAS) managers appeared at the Harare Magistrates Court on Thursday on allegations of stealing US$702 386 from the company which was meant for drug purchases.

PSMAS CEO Farai Muchena, 54, appeared before Harare magistrate Stanford Mambanje jointly charged with Victor Chaipa, 49, Cosmas Mukwesha, 50, and Polite Mugwagwa, 41.

Chaipa is PSMAS’ strategy performance executive, Mukwesha group secretary, and Mugwagwa the performance manager.

The four were not asked to plead to theft charges and were remanded in custody pending bail applications.

Allegations were that in 2020, the PSMAS board passed a resolution authorising management to venture into gold trade.

The objective was to generate foreign currency for the procurement of pharmaceutical drugs and other related medical equipment.

The board resolved that staff members from PSMAS’ procurement department were to act as buyers and agents for buying the gold on behalf of the medical aid scheme.

PSMAS had other investment projects including cannabis growing and a shareholding in a bank.

On 18 February 2021, PSMAS executives, acting on the board resolution, allegedly handed over the projects of gold buying, cannabis growing and the micro finance business to subsidiary, Premier Service Holding Company after opting instead to focus on their core business – health insurance.

It is further alleged that on 13 July 2021, Muchena sent a memo to PSMAS’ principal officer requesting funding for the gold project, which had been allocated to the holding company for implementation.

The funding request amounted to US$237,794, with US$108,674 as pre-trading funding, alleges the prosecution.

Muchena is also alleged to have advised PSMAS about the formation of a company styled Claydust, solely for buying and selling gold to Fidelity.

In response, PSMAS disposed of its Zimbabwe Bank (ZB) shares totalling 65,9643 valued at US$38,000 in order to fund the gold-buying project.

Muchena, Chaipa, Mukwesha and Mugwagwa, acting in connivance, then deviated from using the society’s procurement team to buy gold.

Instead, the suspects allegedly engaged 18 private agencies unknown to PSMAS for gold buying.

From 2019 to 2022 the accused persons allegedly received gold from five of the private agencies which were then sold to Fidelity and they realised US $ 702 386,80 and converted the money to their own use.

External auditors, RBM Auditors, were hired to investigate. The audit concluded that the suspects received and converted all the money realised from the sale of gold to Fidelity Printers for their own use.

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