Zimbabwe news March 3, 2014

Zimbabwe Cricket mismanaged $6m ICC loan

Tristan Holme and Liam Brickhill
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A protest over salaries by Zimbabwe's cricketers has again brought to the fore Zimbabwe Cricket's financial problems, which have continued despite at least US $9 million being loaned by the ICC to the board. ESPNcricinfo can reveal that one reason for the financial mess is that ZC's top leadership apparently used a $6 million loan from the ICC to enrich a bank on whose board they sit and ignored a key condition of the loan.

The issue also raises an apparent conflict of interest: ZC chairman Peter Chingoka, vice-chairman Wilson Manase and former managing director Ozias Bvute all sit on the board of Metbank, one of Zimbabwe's leading banks. While Chingoka is a non-executive director on the Metbank board, Manase is chairman of the board and Bvute is a major shareholder in the institution.

ZC said the main purpose for the ICC loan was to service the current facilities with local banks so that it could borrow again but the plan was upset by the status of the financial market. Chingoka also said it was "wrong and malicious" to allege loss of money when Metbank themselves were owed the most amount of money. The ICC, meanwhile, has declined to respond to specific questions.

Recent effects of that debt have been public knowledge: last September, ZC called off a proposed visit by Sri Lanka on financial grounds and the current domestic season was delayed by two months after players went on strike over unpaid wages. That matter raised its head again in negotiations over payments for the upcoming World Twenty20, which have been deadlocked but due to resume on March 3.

ESPNcricinfo has learnt that from 2009, ZC took out US dollar loans from Metbank at interest rates of more than 20% - and possibly as high as 24% - despite knowing the ICC could arrange loans at international interest rates far below those that Metbank was offering.

In December 2011, after learning of ZC's high-interest loans from Metbank, the ICC loaned the cricket board $6 million with one rider: the money should be used to immediately retire ZC's existing debt. Instead ZC deposited the money in a non-interest-bearing account with Metbank for more than five months. Metbank would have benefited from the interest accruing on their high-interest loan to ZC, as well as from having ZC's money in the non-interest-bearing account available to loan to third parties. ZC would, by the same deal, have lost out twice.

The ICC loan was received by ZC on December 14, 2011; on January 18, 2012, ZC repaid $75,000 to Premier Bank, and another $50,000 to the same institution on March 15. It then repaid $1,758,211 to Interfin Bank on April 23, 2012 and $829,167 to FBC Bank on May 3.

It was not until May 25 that $3,287,623 was repaid to Metbank. With that amount sitting in a non-interest-bearing account for five months and 11 days, Metbank could have earned in the region of $300,000 by loaning it out to third parties at an interest rate of 20%. ZC would have paid around the same amount in interest on its loan from Metbank, which was attracting interest of more than 20% over that time period. Metbank could therefore have benefited by more than $600,000 from the two effects.

The knock-on effect of those decisions was that ZC's debt spiral continued, to the extent that the board had to seek a second ICC loan last month, worth $3m, so that it could pay the money owed to its contracted players, umpires, scorers and other employees. It was also able to announce its squad for the World Twenty20 after receiving an extended deadline from the ICC, and domestic cricket resumed last weekend.

The ICC knew about these indiscretions since at least March 2013, but did not take any action against the individuals involved. However, its latest loan came with the condition that ZC move its principal accounts away from Metbank, which it has now done. Media reports suggest the ICC is preparing to pay off ZC's debts to Metbank; that money will then be deducted from ZC's annual benefits from the ICC, which could amount to $25m over the next three years.

The malaise in Zimbabwe Cricket's finances has been a feature of the last decade. When Bvute took over the organisation's reins following Vince Hogg's resignation in 2004, ZC was $10 million in the black. The 2012 audit of their accounts shows net liabilities of $14,267,152, and total liabilities of $19,081,421.

The exact cost of the financial mismanagement to ZC is difficult to calculate because it is unclear how much they owed Metbank when the $6m loan from the ICC was granted. Media reports in Zimbabwe estimated a further $15 million will be needed to erase the cricket board's bad debt to Metbank.

It is also not clear whether ZC explained the conflict of interests involving Chingoka, Manase and Bvute when that loan was agreed upon, although the ICC should have been aware of it since the trio are listed as directors on the Metbank website and the facts are also stated in ZC's annual audits. The ICC would not have known that Bvute was a major shareholder unless it had been informed as such by ZC.

Asked to explain the reason for the delay in paying off the loan, Chingoka told ESPNcricinfo: "Zimbabwe Cricket postponed utilisation of the ICC loan proceeds. Given the unstable financial market situation then, there was a risk that utilisation of the ICC loan proceeds was likely to result in ZC's bankers failing to finance the renewed bank facilities. Zimbabwe Cricket's main purpose for the loan was to service the current facilities with local banks so that ZC could borrow again. However, as a result of the status of the financial market then, such an initiative was no longer achievable. Meanwhile, temporary extension for the other bank facilities had been sought on the understanding that payment for the facilities will be done once the liquidity situation improved. So it is wrong and malicious to allege loss of money when Metropolitan Bank themselves were owed the most amount of money."

Chingoka did not, however, answer questions on why ZC borrowed money from Metbank when it could have borrowed from the ICC at lower interest rates, or why ZC did not deposit the ICC loan into an interest-bearing account.

He did answer a question on the potential conflict of interest involving its top officials. "Non-executive directors (including Chingoka and Manase) at ZC guide the organisation's strategy and policy whilst operational issues e.g. relationships with banks, are for the management of the organisation." Bvute was managing director of ZC until June 2012.

Asked about the misuse of the ICC loan, an ICC spokesman said only that the organisation does not comment on financial matters relating to its Full Members. A further request for comment on the latest $3m loan, and the prospect of ZC being bailed out of its debt, received the same response.

Were the ICC to pay off the debt to Metbank, it would likely be helping to bail out the bank as well as the cricket board. Metbank has faced mounting liquidity issues over the past five months, which came to a head towards the end of last year when many customers were unable to access the money in their accounts. According to one newspaper report in January, the Reserve Bank of Zimbabwe has been monitoring Metbank under the Troubled and Insolvent Bank policy since November 2013. The report said that ZC's outstanding debt to Metbank was $15m, and that this large exposure was a prime reason for the Reserve Bank's concern over Metbank.

Liam Brickhill is a freelance journalist based in Cape Town. Tristan Holme is a freelance cricket journalist who divides his time between South Africa and Zimbabwe.

Comments have now been closed for this article

  • POSTED BY grahaam on | March 5, 2014, 17:45 GMT

    I beleive Mugabe is the patron for ZC but was appointed a long time ago when things were different and he was encouraging a continuation of colonial pastimes in Zimbabwe ..citing the need to keep certain skills healthy in Zimbabwe notably farming...this did not last long.. And nor did his love of cricket!

  • POSTED BY stormy16 on | March 5, 2014, 17:00 GMT

    Another pathetic administration bungle while the players and game stands aside and no one is accountable. Its just plain unacceptable the administrators (not just Zim) are using cricket for to enrich themselves while the game and players are neglected. Yes easy to criticize and what is the solution especially in a place like Zim? All I can say is someone needs to stand up for the players and the game and Zim has some quality players who would challenge a few teams - if they only got a fair go to compete.

  • POSTED BY Nutcutlet on | March 4, 2014, 19:39 GMT

    Purportedly, the President of Zimbabwe, Robert Mugabwe, is a cricket enthusiast. Unfortunately,thist seems to mean nothing when it comes to looking after the national side. There again, there are other issues that take priority when you are in charge of a country that ranks 157/177 on the Corruption Index of the much respected Transparency International organisation. (I'd like to think that this will see the light of day, because it is a balanced and constructive point.) I grieve for the cricketers of Zimbabwe; they have been ill-served by their masters.

  • POSTED BY on | March 4, 2014, 16:14 GMT

    hope you learnt you lesson ICC !

  • POSTED BY kc69 on | March 3, 2014, 22:33 GMT

    What ICC can do is 2 things.

    1.Dissolve ZC board.Ask plyers to play under ICC flag (as in olympics).Until the goverment of zim intervenes and forms a new board and takes legal action against accused.

    2.setup a panel to monitor fundings given by ICC in past and future for all countries.

    3.Recommend such players to be included in various leagues such as IPL, BBL, Ram slam etc.With big 3 boards taking responsibility of them.

    Else foget about promoting cricket it will soon be extinct.

  • POSTED BY SCC08 on | March 3, 2014, 20:39 GMT

    @ZCFOutkast - let's be honest. There's not much leadership/ management in any Zimbabwe department. Only a few interested in self enrichment to the highest degree while the natural riches get squandered, so these rich get richer. Africa in general really. Problem starts right at the top. Don't disagree unless you have lived in Africa. #expat

  • POSTED BY grahaam on | March 3, 2014, 19:35 GMT

    Quite simply we all knew this was going on , on the basis that there was a good balance available in 2004, why was the administration changed? There was a good domestic structure , international fixtures and envied academy, ..and most of all a healthy bank balance..Vince Hogg resigned under duress and the rest is History...Vince was the last cricket man until that sad day in 2004 ZCU/ZC or whatever you want to call it, never had financial problems, only the arrival of non cricket people changed that . The whole purpose and mission changed the very moment some arrived, as one of the biggest earners of foreign currency in Zim at that time it was obvious that this would attract attention.

  • POSTED BY on | March 3, 2014, 19:24 GMT

    What a Shame, Seriously What a shame for Cricket. Zimbabwe was the best rising team in the beginning of the century producing players like Flower Bros, Heath Streak etc. It could have left behind WI and NZ at least if they kept on improving but money and politics have ruined everything for them. And now Big3 involving money and politics in ICC, I see no good future of world cricket.

  • POSTED BY on | March 3, 2014, 18:42 GMT

    @ ZCFOutkast ....Nobody wants to help them , but happy to criticize.

  • POSTED BY sysubrceq0 on | March 3, 2014, 18:39 GMT

    @Ahmed Habib - One bad season does not indicate the capability of the team, IND is best sub-continent team outside sub-continent from last 15 years. Won more trophies and series outside compare to PAK & SL. Pak with all bowling power did not won a single game in CT13, always whitewashed in AUS did not draw a single game and same with SL, never won a series in ENG. here and there won odd matches in ENG, WI, NZ & SA. Indian team is in transistion phase wait till those guys get some experience.

  • POSTED BY grahaam on | March 5, 2014, 17:45 GMT

    I beleive Mugabe is the patron for ZC but was appointed a long time ago when things were different and he was encouraging a continuation of colonial pastimes in Zimbabwe ..citing the need to keep certain skills healthy in Zimbabwe notably farming...this did not last long.. And nor did his love of cricket!

  • POSTED BY stormy16 on | March 5, 2014, 17:00 GMT

    Another pathetic administration bungle while the players and game stands aside and no one is accountable. Its just plain unacceptable the administrators (not just Zim) are using cricket for to enrich themselves while the game and players are neglected. Yes easy to criticize and what is the solution especially in a place like Zim? All I can say is someone needs to stand up for the players and the game and Zim has some quality players who would challenge a few teams - if they only got a fair go to compete.

  • POSTED BY Nutcutlet on | March 4, 2014, 19:39 GMT

    Purportedly, the President of Zimbabwe, Robert Mugabwe, is a cricket enthusiast. Unfortunately,thist seems to mean nothing when it comes to looking after the national side. There again, there are other issues that take priority when you are in charge of a country that ranks 157/177 on the Corruption Index of the much respected Transparency International organisation. (I'd like to think that this will see the light of day, because it is a balanced and constructive point.) I grieve for the cricketers of Zimbabwe; they have been ill-served by their masters.

  • POSTED BY on | March 4, 2014, 16:14 GMT

    hope you learnt you lesson ICC !

  • POSTED BY kc69 on | March 3, 2014, 22:33 GMT

    What ICC can do is 2 things.

    1.Dissolve ZC board.Ask plyers to play under ICC flag (as in olympics).Until the goverment of zim intervenes and forms a new board and takes legal action against accused.

    2.setup a panel to monitor fundings given by ICC in past and future for all countries.

    3.Recommend such players to be included in various leagues such as IPL, BBL, Ram slam etc.With big 3 boards taking responsibility of them.

    Else foget about promoting cricket it will soon be extinct.

  • POSTED BY SCC08 on | March 3, 2014, 20:39 GMT

    @ZCFOutkast - let's be honest. There's not much leadership/ management in any Zimbabwe department. Only a few interested in self enrichment to the highest degree while the natural riches get squandered, so these rich get richer. Africa in general really. Problem starts right at the top. Don't disagree unless you have lived in Africa. #expat

  • POSTED BY grahaam on | March 3, 2014, 19:35 GMT

    Quite simply we all knew this was going on , on the basis that there was a good balance available in 2004, why was the administration changed? There was a good domestic structure , international fixtures and envied academy, ..and most of all a healthy bank balance..Vince Hogg resigned under duress and the rest is History...Vince was the last cricket man until that sad day in 2004 ZCU/ZC or whatever you want to call it, never had financial problems, only the arrival of non cricket people changed that . The whole purpose and mission changed the very moment some arrived, as one of the biggest earners of foreign currency in Zim at that time it was obvious that this would attract attention.

  • POSTED BY on | March 3, 2014, 19:24 GMT

    What a Shame, Seriously What a shame for Cricket. Zimbabwe was the best rising team in the beginning of the century producing players like Flower Bros, Heath Streak etc. It could have left behind WI and NZ at least if they kept on improving but money and politics have ruined everything for them. And now Big3 involving money and politics in ICC, I see no good future of world cricket.

  • POSTED BY on | March 3, 2014, 18:42 GMT

    @ ZCFOutkast ....Nobody wants to help them , but happy to criticize.

  • POSTED BY sysubrceq0 on | March 3, 2014, 18:39 GMT

    @Ahmed Habib - One bad season does not indicate the capability of the team, IND is best sub-continent team outside sub-continent from last 15 years. Won more trophies and series outside compare to PAK & SL. Pak with all bowling power did not won a single game in CT13, always whitewashed in AUS did not draw a single game and same with SL, never won a series in ENG. here and there won odd matches in ENG, WI, NZ & SA. Indian team is in transistion phase wait till those guys get some experience.

  • POSTED BY android_user on | March 3, 2014, 14:19 GMT

    @jasonsmithwiki : I suppose you are stretching the point a little too much. NZ are (probably) better when conditions assist them the same way NZ are completely clueless when facing even Bangladesh on spin friendly conditions (Ban lost to Afghans recently). And who's to say NZ board is squeaky clean ? 6 of your players are under investigation isn't it ? I dont see how 6 international side players are involved without your board's complicity.

  • POSTED BY ShawnWoodsworth on | March 3, 2014, 13:26 GMT

    MaruthuDelft. Lol mate, your comment was hilarious. NZ cricket is financially capable of taking care of themselves and our performances against India clearly shows, we are a good side. India has a lot of clout when it comes to wealth but everyone knows, they earn it through dirty dealings. It is all coming out now, including the persistent poor performances of the Indian side. 1.2 billion people and still not good enough to win matches. geez mate

  • POSTED BY ShawnWoodsworth on | March 3, 2014, 13:19 GMT

    Similar practices are taking place within the Indian board ay and but the ICC has always been biased when it comes to India mate. Mudgal report and media coverage highlights the dirty deeds taking place within Indian cricket but it's shameful to see ICC keeping mum. If we want the game to be clean than everyone should be held accountable. We need the game to be clean, otherwise there will always be doubt about the results and performances. cheers

  • POSTED BY house_of_stone on | March 3, 2014, 11:49 GMT

    Well written article Liam and Tristan, good to see that we are finally starting to see what ZC have been doing with the funds and how corrupt an organisation they have become. What a pity and how embarassing for us Zimbabweans that we now see ourselves at the point of being annexed from international cricket because of the greedy few that are the powers that be. They are a disgrace to their country and the game and should not be allowed anywhere near it. I cannot believe there are still some out there that try to justify the actions of these individuals, are you seriously that naive? I hope that Zim can one day become competitive but until these guys go that is not going to happen.

  • POSTED BY Hatter_Mad on | March 3, 2014, 10:29 GMT

    Obviously we need to be very careful what we say here (3rd attempt at posting) but I would just like to that I sympathise with Zimbabwe cricketers and staff 100% and suggest that the members of the local national board resign immediately.

  • POSTED BY on | March 3, 2014, 10:17 GMT

    Sandeep.M.J.D@ Indian might be world champs but white washed recently by minnows named kiwi's... did you remember?

  • POSTED BY on | March 3, 2014, 9:59 GMT

    Players were heard when they decided to go on strike, no games were played, even international matches were cancelled. They are the only ones who can forcefully remove Chingoka form being chairman. It all lies up to them.

  • POSTED BY android_user on | March 3, 2014, 9:51 GMT

    Very sad how Zim cricket is suffering.

    ICC should take control of ZC. There are some good cricketers in Zim. World cricket need teams like Zim, Ireland, Afghan and Kenya to play test cricket. This is how the game will grow.

    ICC please step in and do something to justify your existance.

  • POSTED BY espncricinfomobile on | March 3, 2014, 9:18 GMT

    Bad news.

  • POSTED BY Vanilla_Slice on | March 3, 2014, 9:00 GMT

    Anyone who has more than a passing interest in Zimbabwe cricket wouldn't at all be surprised or shocked by this news and unless Zimbabwean cricket is removed from the political influence of the country and put into the hands of those with nothing more than a genuine love of the game, it will sadly continue to go down this path. The board needs to be removed or Zimbabwe needs to be removed. These are the only two viable options that can produce change.

  • POSTED BY on | March 3, 2014, 8:06 GMT

    well the situation in zim is really bad. we need former players to run the game for us . politics played a key role for the demise of the game. Garry balance is playing for the three lions. what a loss? provided that everything is in place and in order we can compete with anyone but we lack the resources to match the powerful teams. Chucking out zim is not the solution at all, i am hate because the groundsmen and other workers have gone for about 8 months without pay

  • POSTED BY on | March 3, 2014, 7:44 GMT

    Seriously........?? Oh Lord!!

  • POSTED BY Sandeep.M.J.D on | March 3, 2014, 6:50 GMT

    @bingoe67: India are the current World CHAMPIONS, FYI...

  • POSTED BY Pnagnoor on | March 3, 2014, 6:26 GMT

    Instead of just firing the management, I feel the solution would be to completely rebuild the Zimbabawe Cricket Board. This approach should be taken to all financially crippled cricket boards including USACA and SLC. Only after the whole political and financial situation has been dissolved can cricket be rebuilt on a more solid base in these nations.

  • POSTED BY grahaam on | March 3, 2014, 6:23 GMT

    Well I never.......this is such a shock

  • POSTED BY bingoe67 on | March 3, 2014, 5:28 GMT

    @MaruthuDelft given that India couldn't win a game to save themselves at the moment I presume you meant to say 4 countries is enough?!!

  • POSTED BY android_user on | March 3, 2014, 5:08 GMT

    Zimbabwe not good at playing? Doubt that very much! They have produced some of the finest talent cricket has to offer. It's because of this financial mess the cricketers are leaving Zimbabwe to play for the likes of England. Demotion will not solve anything... Firing the management will!

  • POSTED BY MaruthuDelft on | March 3, 2014, 5:04 GMT

    Zim must be kicked out from ICC membership. Actually members who cannot support themselves on their own and those who perform badly also must be suspended. It includes Sri Lanka, New Zealnad and Bangladesh. Afghan and Ireland must not be given test status. 5 countries are enough; they are India, Pakistan, SA, England and Australia.

  • POSTED BY Patorick on | March 3, 2014, 4:51 GMT

    @Mohamed Nazim:- there's a time and a place for welfare with certain cricketing countries. This situation with Zimbabwe has gone well beyond welfare/charity and into twisted comedy. Not a good look for cricket at all.

  • POSTED BY on | March 3, 2014, 4:30 GMT

    @sangeeth11...non of the full members of the ICC had nothing handed to them... so despite we are all happy with the progress of Afghanistan . you nor the Afghan team should not xpect anything handed to you guys ..this is not a welfare dept. work for it ans if god wills u will earn it. as for zimbabwe, i hope the full hand of the law extends itself and those responsible be held accountable in a court of law.

  • POSTED BY Patorick on | March 3, 2014, 4:22 GMT

    What a mess.

    ICC or SA need to step in and lead by example.

  • POSTED BY TheZeus on | March 3, 2014, 3:25 GMT

    I agree with Sangeeth11...This does not augur well for the game of cricket...I would love to see what actions the ICC will take concerning this mess...

  • POSTED BY Sangeeth11 on | March 3, 2014, 3:02 GMT

    It is high time Zimbabwe is demoted from its Test Status and give Afghanistan the Full Member status. Zimbabwe is neither good in playing nor managing.

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  • POSTED BY Sangeeth11 on | March 3, 2014, 3:02 GMT

    It is high time Zimbabwe is demoted from its Test Status and give Afghanistan the Full Member status. Zimbabwe is neither good in playing nor managing.

  • POSTED BY TheZeus on | March 3, 2014, 3:25 GMT

    I agree with Sangeeth11...This does not augur well for the game of cricket...I would love to see what actions the ICC will take concerning this mess...

  • POSTED BY Patorick on | March 3, 2014, 4:22 GMT

    What a mess.

    ICC or SA need to step in and lead by example.

  • POSTED BY on | March 3, 2014, 4:30 GMT

    @sangeeth11...non of the full members of the ICC had nothing handed to them... so despite we are all happy with the progress of Afghanistan . you nor the Afghan team should not xpect anything handed to you guys ..this is not a welfare dept. work for it ans if god wills u will earn it. as for zimbabwe, i hope the full hand of the law extends itself and those responsible be held accountable in a court of law.

  • POSTED BY Patorick on | March 3, 2014, 4:51 GMT

    @Mohamed Nazim:- there's a time and a place for welfare with certain cricketing countries. This situation with Zimbabwe has gone well beyond welfare/charity and into twisted comedy. Not a good look for cricket at all.

  • POSTED BY MaruthuDelft on | March 3, 2014, 5:04 GMT

    Zim must be kicked out from ICC membership. Actually members who cannot support themselves on their own and those who perform badly also must be suspended. It includes Sri Lanka, New Zealnad and Bangladesh. Afghan and Ireland must not be given test status. 5 countries are enough; they are India, Pakistan, SA, England and Australia.

  • POSTED BY android_user on | March 3, 2014, 5:08 GMT

    Zimbabwe not good at playing? Doubt that very much! They have produced some of the finest talent cricket has to offer. It's because of this financial mess the cricketers are leaving Zimbabwe to play for the likes of England. Demotion will not solve anything... Firing the management will!

  • POSTED BY bingoe67 on | March 3, 2014, 5:28 GMT

    @MaruthuDelft given that India couldn't win a game to save themselves at the moment I presume you meant to say 4 countries is enough?!!

  • POSTED BY grahaam on | March 3, 2014, 6:23 GMT

    Well I never.......this is such a shock

  • POSTED BY Pnagnoor on | March 3, 2014, 6:26 GMT

    Instead of just firing the management, I feel the solution would be to completely rebuild the Zimbabawe Cricket Board. This approach should be taken to all financially crippled cricket boards including USACA and SLC. Only after the whole political and financial situation has been dissolved can cricket be rebuilt on a more solid base in these nations.