Reserve Bank Of Zimbabwe Sanctions 18 Companies Over Alleged Forex Frauds

(AFRICAN EXAMINER) – Eighteen companies are to face sanctions from the Reserve Bank of Zimbabwe (RBZ) for allegedly abusing the country’s foreign exchange auction system.

Dr John Mangudya, the RBZ governor on Tuesday said the companies face allegations of flouting the Statutory Instrument 127 of 2021 (SI 127) put in place to provide for penalties against “errant entities that were at the forefront of abusing the foreign exchange auction system to the detriment of the stability of the economy.”

Investigations by the Financial Intelligence Unit and the Bank’s Exchange Control Division established the entities were abusing the system.

“Going forward and in line with the recommendations from the business community on the need to continue to enhance stability in the economy, the Bank’s efforts to foster compliance in terms of SI 127 shall be limited to outliers that wantonly abuse the foreign exchange auction system, exchange rate manipulation and noncompliance with anti-money laundering rules and regulations.”

“The Bank has a duty of care to ensure that the significant progress that the economy made since the introduction of the foreign exchange auction system in June 2020 continues on an unabated positive trajectory whilst at the same time protecting consumers and fostering compliance to engender fair play in the economy,” said Dr Mangudya.

He said the Central Bank focuses on business’s reality check, self-discipline, self-monitoring and peer-review, would sustain inflation and exchange rate stability that are necessary for the economy to continue to rebound.

The companies facing sanctions include Africa Steel, Classic Energy, Clorex Energy, Duo Valley Commodity Brokers, Explochem, Faircclot Investments, Flicknik Enterprises, Georgia Petroleum, GlenuLas Trading, Kimya Investments, Mutare Mart & Exchange and National Foods.

Others are Natural Stone Export, Nuvert Trading, Phirebrook Investments, Souzrce Fuels, Tettola Investments and Westvillle Investments.

RBZ introduced weekly foreign exchange auctions to replace the interbank market and determine the Zimbabwe dollar (ZWL) exchange rate.

Zimbabwe government believes the auction platform will enhance transparency and efficient distribution of scarce foreign currency.

Last year the country established the foreign currency-based Victoria Falls Stock Exchange in an effort to attract forex trading.