Probe RBZ role in allegedly gold scandal, Veritas

A local legal think tank has called for an investigation into the operations of the Reserve Bank of Zimbabwe (RBZ) after the central bank was implicated in illegal gold deals and money laundering in the Al Jazeera series.

According to Veritas, the Al Jazeera documentary “The Gold Mafia” has tarnished the RBZ’s reputation and triggered suspicion within global financial markets, multi-lateral financial institutions, and the general Zimbabwean public.

“In the interests of transparency and accountability, an investigation should be undertaken to ascertain precisely what the bank and its subsidiary companies have been and are doing and whether their activities have been lawful,” says Veritas.

It says there are at least three ways in which such an investigation could be conducted.

The Minister of Finance and Economic Development could order an investigation into the bank’s activities in terms of section 38 of the Reserve Bank of Zimbabwe Act.

The section gives persons conducting an investigation power to demand documents and answers from all officers, employees and agents of the bank.

In terms of the law, anyone refusing to supply such documents and answers on demand can be imprisoned for up to three months.

Second, the Auditor-General could be directed to conduct a forensic audit of the bank’s financial statements and the financial statements of its subsidiaries.

Section 309 (2)(b) of the Constitution says that at the request of the Government, the Auditor General may carry out a special audit of the accounts of any statutory body or government-controlled entity.

And section 6 (1)(a) of the Audit Office Act gives the AG the function of auditing the accounts of public entities on behalf of the National Assembly.

So the AG could conduct a forensic audit at the direction of either a government Minister or the National Assembly.

The President can also appoint a commission of inquiry to investigate the activities of the bank and its subsidiaries.

“An audit or investigation conducted in any of those ways would have the sufficient legal authority to uncover wrongdoing on the part of the Reserve Bank and to override any right to secrecy conferred by section 60 of the Reserve Bank of Zimbabwe Act,” says Veritas.

It suggests that an audit or investigation could be done in partnership with reputable international audit firms or agencies so that all stakeholders – international markets, multi-lateral financial institutions and the general public – are satisfied that the exercise has been conducted thoroughly and fairly.-ebusinessweekly