Tendai Rupapa Senior Court Reporter
Metallon Gold Zimbabwe (Pvt) Ltd has been taken to court on allegations of externalising more than $30 million.
The Harare Magistrates’ Court yesterday heard how the company would transfer the money outside the country without approval from the Reserve Bank of Zimbabwe on the pretext it was repaying a loan.
At times it would claim it was paying for services rendered or paying its management.
It is also the State’s case that sometime in 2010, the company paid a dividend of $51 000 despite making a loss.
It is further alleged that in 2012 it also declared a dividend of $25 000 000 whereas the company had an operating profit of less than the dividend amount.
The company is represented in court by its secretary, Hapson Makotore.
Magistrate Ms Josphine Sande remanded the case to August 30.
Harare lawyer Mr Evans Moyo is acting on behalf of the company.
In 2015, the National Economic Conduct Inspectorate (NEIC) carried out an inspection into the business affairs of Metallon Gold following information alleging violation of Exchange Control Regulations.
It was discovered that the company allegedly externalised $31 million.
The prosecution, led by Mr Sebastian Mutizirwa, alleged that during the period extending from January 2009 to December 2013, Metallon Gold Zimbabwe externalised a total of $9 932 365 to Redwing United Kingdom Limited on the pretext that it was payment for management and services rendered to it by the UK firm.
From June 2011 to January 2012 the gold company allegedly paid out $5 800 000 to Stonhage Trust through Mtetwa and Nyambirai Trust disguised as loan payment whereas no such amount was due to Stonhage, the court heard.
It is the State’s case that Metallon Gold Zimbabwe also paid a dividend of $51 000 despite the company posting a loss.
It is further alleged that in 2012 it also declared a dividend of $25 000 000 whereas the company had an operating profit of less than the said amount.
By so doing, according to the State, the company financed a dividend from non- distributable reserves without Exchange Control approval.
During the period extending from June 2011 to January 2012, Metallon Gold Zimbabwe paid $87 871,00 to First Atlantic, a company domiciled outside Zimbabwe through Mtetwa and Nyambirai Trust disguised as loan repayment yet it did not owe First Atlantic.
They also heard that the company paid a dividend worth $12 200 000 to shareholders but failed to withhold tax payable to dividends paid to non-resident shareholders.
Also sometime in 2012, without authority from the Reserve Bank of Zimbabwe Exchange Control, the company allegedly wrote off an advance loan of $7 717 000 as uncollectable thereby technically externalising $7 717 000 being a loan advanced to its sister company in South Africa.