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Senior Court Reporter 

Four top executives of PSMAS appearing in court on charges of fraud, forgery and theft have been granted bail of $50 000 to $100 000 each but are barred from attending work or having dealings with PSMAS staff as part of their bail conditions.

PSMAS Holdings CEO Farai Muchena, group strategy and performance executive Victor Chaipa, managing director and executive director corporate affairs Shingai Mabuto and company secretary Cosmas Mukwasha are facing charges of over payment of US$486 000 and almost $14,5 million in board holiday allowances that should never have been paid, a fake audit report and allowing a themselves 15 beneficiaries on one subscription.

The general bail is $50 000 each but Harare regional magistrate Mr Taurai Manwere ordered Muchena and Mabuto to pay another $50 000 bail on a matter they are separately appearing.

Mabuto is also appearing on a separate charge of fraud of $6 797 481 after he allegedly added five medical aid beneficiaries on top of the maximum of 10 stipulated by PSMAS and was ordered separately pay the same bail amount.

Muchena and Mukwesha are also jointly charged with fraud and forgery after they allegedly tendered Premier Service Holdings company annual returns to the Registrar of Companies purporting that they had been audited by Grant Thornton, while knowing that no audit had been undertaken. 

Circumstances leading to their arrest are that sometime in 2003, PSMAS formed PSMI, as its medical investment arm. PSMAS owned the entire shareholding. The company was set up to own facilities such as clinics, pharmacies and hospitals that were needed by PSMAS members, most of whom are civil servants.

But then PSMI later formed other investment vehicles, Clay Dust Mining Company and Premier Service Microfinance that had little to do with treatment and medical aid. 

So in February 2019, a holding company called Premier Service Holding Company was formed to manage the activities of the society’s subsidiaries, which included PSMI.

Between January 2015 and January 2017, PSMI appointed Colonel Wellington Tutisa, Cecilia Alexandra, Richard Gundani, Vimbikai Magnes Kusema, Loveness Dumwa, Miriam Chahuruwa, Shaw and Dr E Purazi as board members on contracts that extended to January 2018.

The terms and conditions of service for the board members were guided by 2015 PSMI board terms of reference and the board fee structure.

In December 2018, Muchemwa, Chaipa and Mabuto allegedly diverted PSMI funds by approving yearly payments of holiday allowances to board members, well knowing that they were not entitled to benefit from such allowances.

They allegedly paid US$45 902 to board chairman Col Tulisa, US$22 249 to vice chairman Cecilia Alexander and US$6 746 to each of the other board members for a total of US$243 000. PSMAS allegedly lost US$115 373.

In 2019, they also allegedly approved payment of $243 000 and $5 084 176 in 2020.

The court heard that last year $9 372 522 was paid in holiday allowances.