The Sunday Mail
Kudakwashe Mutandi
INDEPENDENT financial services group DeVere has allegedly been operating without a licence while investigations show that it is helping wealthy individuals and companies to externalise money through offshore accounts, prejudicing the country of the much-needed cash.
The Reserve Bank of Zimbabwe (RBZ) and the Securities Commission of Zimbabwe (SECZ) confirmed last week that the firm is not licensed.
There are allegations that DeVere and other unlicensed financial institutions are laundering and externalising foreign currency through offshore accounts.
DeVere, which operates from its plush Mount Pleasant offices, came to Zimbabwe in 2010 under a strategic alliance with ailing investment bank Tetrad.
The company initially operated from Tetrad offices for two years before they parted ways on January 31, 2013 in what they jointly called a ‘‘mutual separation’’.
Much of the funds are spirited away to the tax havens of the Channel Island, an archipelago of British Crown dependencies.
Also, among the offshore institutions to which Zimbabwean savings have long been siphoned to include the scandal-hit HSBC, which recently made headlines for helping rich individuals to evade tax in their respective countries.
The other accounts are with Standard Bank Jersey and Generali Internationale Ltd, which banks with Citibank Channel Islands, account number 411420019.
The funds are routed through Citibank New York ABA Routing number 021000089.
Investigations revealed that DeVere employees target wealthy individuals which they pester until they meet the company’s Investment Advisory head and Area Manager, Mr Shane Heldberg.
It is during the meetings with Mr Heldberg where potential clients are allegedly enticed to externalise money through what has emerged as dubious investment vehicles administered by DeVere.
A senior company executive with Devere, who preferred anonymity, said the company mainly lured many into their schemes by promising higher returns and security.
“It boggles the mind to think that these DeVere people are mopping up savings out of this country day in day out under the radar, escaping the eye of the monetary authorities.
“If at all they have a licence to carry out the business, what category of financial institution are they and which regulatory authority’s jurisdiction do they fall under?
“Yesteryear, the RBZ ran battles with foreign-owned banks who were sitting on huge deposits but were refusing to lend to local companies and going to the extent of keeping long positions on their Nostro accounts.
“These institutions had unacceptably low deposit-to-loan ratios compared to their locally owned compatriots. Is this not a case of economic sabotage?” quipped the senior banking executive.
However, DeVere head of media and public relations Mr George Prior said they were complying with the country’s laws.
“We are an SEC-recognised company that is indigenised and fully compliant with the company establishment laws and regulations.
“We offer a suit of products with an international remit and do not deal in local securities,” he said.
Securities Commission of Zimbabwe chief executive Mr Tafadzwa Chinamo warned financial advisory firms to operate within the confines of the exchange control regulations.
He said only one advisory firm was registered with SEC, raising questions about the legality of DeVere’s operations.
In a notice, SEC said: “It is an offence in terms of Section 5 of the Collective Investment Schemes Act to operate collective investment scheme which is not registered by the Commission.
“Only registered schemes are allowed to invite persons to become participants in a collective investment scheme, give advice, manage or operate a collective investment scheme in Zimbabwe.
“The commission will cause the prosecution of all persons who operate/manage unregistered schemes.
“Local operators should therefore take this opportunity to register and in the meantime, SECZ is working with foreign regulators to establish the authenticity of such agents and the products they offer.
“The investing public should always ask for proof of legitimacy of the agent and should report to SECZ when offered any investment product by an unregistered person.
“Members of the public are advised not to deal with unlicensed persons as they risk losing their hard-earned money.”
Authorities at the RBZ said they were not aware of the existence of DeVere although the institution is taking deposits, meaning its operations should be supervised by the central bank.
In its recent monetary policy, the RBZ said it was seeking to harness financial resources for the furtherance of monetary objectives in the face of tight liquidity since dollarisation.
In the past year, a number of financial institutions were placed under curatorship, judiciary management and liquidation.
The RBZ has since pursued various measures aimed at promoting stability in the financial sector, chief among them capitalisation of banks and other financial institutions and promote good corporate governance.
These have been named as some of the major reasons behind bank failures and escalating non-performing loans currently standing at 16 percent as at December 2014.
