Stealing From The Sick …PSMAS Executives Stole US$700K Meant For Drug Purchases

by | Apr 28, 2023 | Latest, Local News | 0 comments

Staff Reporter

Premier Service Medical Aid Society boss, Farai Muchena and three of his senior executives squandered US$702,386 which was meant for drug purchases.

This is after they distorted facts to Fidelity Printers in a gold deal.

Appearing before Harare magistrate Stanford Mambanje Muchena, 54, were jointly charged with Victor Chaipa, 49, Cosmas Mukwesha, 50, and Polite Mugwagwa, 41.

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

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

It is in the state case that in 2020, the PSMAS board, with the objective of generating foreign currency for the procurement of pharmaceutical drugs and other related medical equipment, passed a resolution authorising management to venture into buying and selling gold.

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, founded by civil servants.

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

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

The court heard that on July 13, 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.

The court also heard that Muchena 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.

It is alleged that with the intention of stealing money from PSMAS, Muchena, Chaipa, Mukwesha and Mugwagwa, acting in connivance, then deviated from using the society’s procurement team to buy gold. Instead, the quartet allegedly engaged 18 private agencies unknown to PSMAS for gold buying.

“From the period extending from 2019 to 2022, accused persons received gold from five of the private agencies which was then sold to Fidelity by the accused persons realising cash amounting to US$702,386.80 having misled Fidelity Printers that they needed hard cash for the purchase of drugs and pharmaceuticals, well knowing that they wanted the cash for themselves,” the prosecution says.

They allegedly converted the proceeds to personal use.

It is alleged that other PSMAS executives observed that the society was not benefiting from the gold-buying project as no drugs and pharmaceuticals were being procured for PSMAS hospitals and clinics yet records indicated that gold was being sold. External auditors, RBM Auditors, were hired to investigate.

The audit concluded that the quartet received and converted all the money realised from the sale of gold to Fidelity Printers to their own use, the state said.