Zimbabwe Police Probe Telecoms Giant, Econet, Over Money Laundering

A man shows a wad of the new Zimbabwe two-dollar notes he received from a bank in Harare on November 12, 2019. Jekesai NJIKIZANA / AFP
A man shows a wad of the new Zimbabwe two-dollar notes he received from a bank in Harare on November 12, 2019. Jekesai NJIKIZANA / AFP


Zimbabwean police are investigating the country’s top mobile telephone operator Econet Wireless for suspected money laundering, according to a search warrant issued Friday.

Police want the telecommunications giant to disclose its customers’ details and records of all transactions conducted within the first half of 2020 as a stand-off between the government and the company mounts.

In a dramatic move, the government last month abruptly suspended mobile money transactions provided by telephone operators, the most widely used platform to make and receive payments in the crisis-ridden country.

The services continued for daily individual transactions but were capped for merchant transactions.

Information Ministry Permanent Secretary Nick Mangwana blamed mobile money transfer platforms for galloping inflation, and said that the government was in “possession of impeccable intelligence” that telephone service providers were involved in illicit activities that were sabotaging the country’s economy.

The government also suspended all trade on the country’s stock exchange, which it accused of being complicit in illicit financial activities.

In Friday’s search warrant, police specialist investigator Mkhululi Nyoni said he had “reasonable grounds to suspect that Econet Wireless… is involved in money laundering activities”.

Police said there is information that the firm has fraudulently created fake subscribers to transfer mobile money to other accounts, to be converted to cash.

“The runners would in turn buy foreign currency in the black market before being externalised (abroad),” said the warrant.

The company, which has some 10.5 million customers, was ordered to surrender all the requested documents within seven days.

Econet’s spokesman Fungai Mandiveyi declined to comment.

Mobile money payments account for most electronic payment transactions in the country, which is critically short of bank notes.

Zimbabwe is being buffeted by its worst economic crisis in over a decade, including scarcity of basics like fuel and cornmeal.



Econet seeks $3.1 bln damages from Bharti Airtel

South Africa-based Econet Wireless is seeking at least $3.1 billion in damages from Bharti Airtel in a dispute over ownership of Airtel Nigeria, according to a suit Econet said it had filed on Wednesday.

Bharti acquired the African operations of Kuwaiti company Zain in 2010, including 65 percent of Zain Nigeria, renamed Airtel Nigeria, but a Nigerian court ruled on January 30 that its ownership of the unit was “null and void” because co-founder and 5 percent shareholder Econet had not been consulted on the transfer.

Econet claims its stake was unfairly cancelled when Zain took control in 2005, so any decision made since then without it, including the transfer to Bharti from Zain, is void. The Nigerian court upheld that claim.

Bharti, the world’s fifth-biggest mobile phone carrier by subscribers, said on Feb. 8 that its stake in the Nigerian unit was “completely safe” and it had appealed against the verdict.

A Bharti spokesman said the company had not been informed of any lawsuit.

“Econet has yet to put forward its claim for damages to the arbitral tribunal,” he said in a statement emailed to Reuters.

The document Econet said it had filed to court stated: “The claim for damages and equitable compensation against the applicant and some of the respondents might be in excess of $3 billion.”

“The above estimated damages might also be in addition to a claim for $100 million received by the applicant as fees for the management of VNL (Vee Networks Limited, a former name of Airtel) for a period of six years, which sum should have accrued.”

Bharti’s spokesman said the Econet stake had not been cancelled but had been set aside pending final resolution of litigation on the matter.
Nigeria contributes about 9.5 percent to Bharti’s consolidated operational profits, the company says.