Thursday, 22 November 2018

RioZim Sues RBZ Over Breach Of Exchange Control Directives

Mining giant RioZim has sued the ReserveBank of Zimbabwe RBZ) to compel it to pay over $92 million dollars.

The law requires that gold miners sell all their gold to Fidelity Printers which is an arm of the RBZ. The RBZ then Exports the mineral and the companies now retain 55 per cent of the export earnings in United States Dollars. Previously, the companies were allowed to retain 50 %, up from 30% in 2016. The balance is then transferred to the companies’ local accounts via RTGS. RioZim alleges that RBZ breached the provisions of the exchange control directives and are therefore owed millions. In its filing at the High Court RioZim argues
RioZim Sues RBZ Over Breach Of Exchange Control Directives
RioZim Sues RBZ Over Breach Of Exchange Control Directives
During the period between June 1, 2016 and September 30, 2018, the plaintiff (RioZim) was entitled in terms of the directives to receive and access from the first and second defendants (RBZ and Fidelity Printers and Refiners) the amount of $84 297 364 in hard foreign currency, which amounted to 50% of its export proceeds, which amount in accordance with the exchange control directive RR101/2016 was to be kept in the first defendant’s (Fidelity Printers) Nostro account for allocation to the plaintiff.

In breach of the provisions of the exchange control directives … and notwithstanding numerous request/protests by the plaintiff to be allocated and be given access to utilise the foreign currency that it generated externally in order to meet its operational requirements, the plaintiff only received and was given access from the first defendant to $26 130 967 which constituted only 15% of the amount due to be allocated to the plaintiff in US$, as opposed to the stated 50%.

In breach of the exchange control directives the first and second defendants paid the balance of $58 166 397 to the plaintiff locally through RTGS payments as opposed to allocating the same to the plaintiff from the first defendant’s Nostro account and, therefore, the plaintiff was precluded from using the said funds externally in order to fund its operational requirements.

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