By Staff Reporter
Chinise bussineswoman Li Song’s trial for allegedly externalizing US$6,934,779.29 was delayed at the Harare Magistrate’s Court on Tuesday due to a contradictory document she submitted, which claimed to be from Ecobank and diverged from the bank’s previously established position.
During the police investigation, Ecobank provided a statement indicating that Eagle Italian Shoes Pvt Ltd had outstanding acquittals related to import documentation. However, in a contradictory statement reportedly released to Li Song as she prepared her defense, the bank claimed that the company had no outstanding acquittals, contradicting their earlier statement.
The hearing was postponed to August 30, 2024, to allow for additional investigation into the document’s origins, as the two parties agreed to delve deeper into the matter to verify the document’s authenticity.
The complainant in this case is Eagle Italian Shoe Company being represented by Kutaura Bond Taderera. The accused is Li Song who is a former Director of the same company.
Eagle Italian Shoes (Private) Limited specializes in producing leather footwear, catering to both domestic and global markets. To sustain its operations, the company depends on importing raw materials from various foreign nations.
Throughout the auditing period, the firm maintained two types of bank accounts—those denominated in Local Currency and those in Foreign Currency—with both Ecobank Limited and another local bank.
The agreement for each bank account stipulated that any authorized person could execute transactions. A bank signatory and director at the time, Li Song exploited this flexibility to authorize payments to Jacaranda Consulting Services and Skyone Import and Export Company, both foreign entities.
It is the State’s case that according to the audit findings, between June 1, 2020, and September 30, 2021, a total sum of US$809,407.83 was disbursed to these overseas firms.
It is also alleged that an affidavit submitted by the Head of Trade Operations and Exchange Control Manager, Mr. Nyaumwe, along with bank statements and bid documents pertaining to Eagle Italian Shoe Company, demonstrates that they have outstanding acquittals concerning import documentation.
The audit uncovered that the company had outstanding acquittals totaling US$405,200.66 from its available funds for payments made via a local bank over a span of three years, culminating on December 31, 2016.
There are no bills of entry or commercial invoices to substantiate that goods and services were indeed delivered to Eagle Italian Shoes (Private) Limited for all the payments made. This lack of documentation led to the suspension of the company’s accounts with its two banks due to the failure to present bills of entry.
Following investigations, the Reserve Bank of Zimbabwe furnished the police with details regarding auction allotments and foreign payments allocated to Eagle Italian Shoes Company and its subsidiary companies.
Specifically, DGL Investments Number Nine received auction allotments totaling USD$859,880.80, and through this entity, the accused made foreign payments amounting to USD$1,659,851.10.
Another company, Strengthened Investments (Pvt) Ltd, received auction allotments worth USD$1,018,101.21, and the accused proceeded to make foreign payments totaling USD$1,129,311.96 through this entity.
Additionally, Eagle Italian Shoes Pvt Ltd, which also benefited from auction allotments valued at USD$430,407.83, executed foreign payments amounting to USD$51,058,407.52 utilizing the same company.
In terms of the Reserve Bank of Zimbabwe exchange control regulations, companies that do make advance payments to foreign companies for goods have 90 days to submit proof of receipt of the goods by way of bill of entries and commercial invoices to the bank through which they would have made those payments.
Failure to submit bill of entries and other related documents such as commercial invoices may mean that the company would have externalized funds
Eagle Italian shoe (pvt) Ltd and its subsidiary companies, DGL 9 and Strengthened Investments accounts were awarded foreign currency during the period under review through the accused person Li Song.
The accused person took advantage of the scheme by utilizing the company and its subsidiary accounts company free funds to make payments to foreign companies which include Jacaranda Consulting Services and Skyone Import and Export Company.
The accused did foreign payments amounting to USD$6 934 779.29
The company’s bank accounts were eventually suspended after failing to submit bill of entries to Ecobank Limited and another local bank.
