(formerly IRIN News) Journalism from the heart of crises

Little hope of lost maize millions being repaid

[Zimbabwe] Morgan Tsvangirai, MDC Leader
Obinna Anyadike/IRIN

Ari Ben-Menashe, the man at the centre of Zimbabwe opposition leader Morgan Tsvangirai's treason case, has been ordered to repay millions of dollars to the Zambian goverment in a maize deal gone wrong, the Financial Gazette reported.

However, the Zambian government is unlikely to see the US $6 million plus interest the London Court of International Arbitration (LCIA) ordered repaid after as Ben-Menashe's Carlington Sales Company, which was contracted to supply 50,000 mt of maize in the late 90's, has been liquidated.

Ben-Menashe's name hit headlines this year when Movement for Democratic Change (MDC) leader Tsvangirai and two others were arrested for allegedly plotting to kill President Robert Mugabe. Tsvangirai met Ben-Menashe with a view to hiring his public relations company Dickens and Madson to improve the MDC's image abroad. He was then secretly filmed saying he wanted to "eliminate" Mugabe, leading to the treason charges.

The Financial Gazette reported that the 50,000 mt of maize was never delivered. South African bank Nedcor, acting on behalf of the Zambian government asked the court to get the money back.

However, despite the positive judgment, Willem Kruger, Nedcor's head for legal affairs said: "We are unable to effect our rights in terms of the arbitration because Carlington has liquidated itself."

The maize scandal goes back to 1997 when the government decided to buy 100,000 mt of maize through the Canadian based Carlington Sales Company at a price lower than the Zambian price. Ten percent of the final price of US $24 million was forwarded by the Bank of Zambia to cover shipping costs but the maize never arrived. The contract was renegotiated several times as the Zambian government battled to raise the money. Eventually US $5.24 was paid for 50,000 mt but still the maize never arrived.

An additional US $2 million was allegedly paid to Ben-Menashe on the orders of former president Frederick Chiluba so that Ben-Menashe's public relations company could lobby for investment in Zambia's mines.

However, the newspaper said Ben-Menashe claimed that he was forced to bribe many Zambians and claimed that former opposition politician Paul Tembo was murdered because he was going to testify on his behalf. The judge rejected his offers to provide evidence of this calling it a delaying tactic.

The LCIA ordered Ben Menashe to pay Nedcor, to whom the Zambian government had ceded the contract, US $4,988,508 for breach of contract plus interest of US $1,120,313. He was also ordered to pay the court costs, the newspaper reported.

Kruger said Nedcor was currently trying to recover some of the money from the Carlington liquidation process.

Reacting to news of the court settlement rights monitoring group Afronet chief executive Ngande Mwanajiti told IRIN: "The Zambian government hasn't done anything about it. The people involved are still serving in government."

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