An estimated US$140 million worth of rough diamonds are said to be missing from the repositories of Minerals Marketing Corporation of Zimbabwe (MMCZ) and Zimbabwe Consolidated Diamond Company (ZCDC).
Previous auctions indicate that Zimbabwean diamonds fetched between US$400 per carat to as much as US$12,000 per carat.
In her recently released 2019 report, Auditor-General Mildred Chiri revealed that both the MMCZ and ZMDC cannot account for up to 350,000 carats of diamonds which were kept in their vaults.
The Parliamentary Portfolio Committee on Mines and Mining Development chaired by Shurugwi South legislator (Zanu PF) Edmond Mkaratigwa held a hearing Monday, demanding answers.
Environment and minerals watchdog, the Zimbabwe Environmental Law Association (ZELA), was also invited to present an explanation for the development.
Chiri’s investigation also showed serious diamond stock reconciliation loopholes which she said could provide the avenue for misappropriation.
She also reported that some diamonds were sold in the Zimbabwean dollar to local customers, who later spirited the precious gemstones outside the country, pocketing foreign currency in the process.
The identities of the customers were not revealed, even to the auditor general herself.
In her report, Chiri stated: “In 2019, 297 660, 41 carats of diamond stock held at MMCZ was not counted at the time of the stock count. These parcels were packed for customers and held at MMCZ. However, at year-end, during the stock count, these stocks were not included in closing inventories.”
“In 2018, 41 699 85 carats of diamond stocks held at MMCZ were excluded from the stock count. It was assumed at the time that these stocks had been sold to customers. An additional 13 222, 85 carats were excluded from the final stock sheet in error,” Chiri’s report reads.
The ZCDC management in response to Chiri’s findings indicated that the company would in future engage a diamond stock controller to prevent such leakages, but the auditor general raised the flag saying such loopholes are mostly a result of deliberate corrupt actions.
“So the stock reconciliation problem was attributed to systems challenges. However, sometimes, laxity in systems can be created to enable corrupt or fraud behaviour to thrive,” Chiri noted.
Chiri’s report further reveals that the MMCZ, in December 2019, could not account for five carats worth slightly over US$2,000. The diamonds conveniently went missing during a Close Circuit Television (CCTV) breach.