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Last Updated: Thursday, 15 January, 2004, 15:50 GMT
Mass panic grips Zimbabwe banks
Harare cashpoint
Investors fear that banks will go bust
Hundreds of Zimbabweans have besieged several new banks to withdraw their money amid rumours they are going bust.

The panic follows a crackdown on alleged corruption in financial institutions, which has left at least six banks in serious trouble.

A Zimbabwean man said: "I don't want to take chances. Today I am going to withdraw all my money from my bank".

Police have recently arrested lawyers, insurance agents and a top politician implicated in a banking scandal.

Another woman in in the second city of Bulawayo says: "I came here as soon as I heard on the radio that several banks owned by locals would be closed."

Magistrates arrested

A senior official of the ruling Zanu-PF party has been in custody for several days, accused of blocking enquiries.

Philip Chiyangwa says he is a victim of rival factions vying to succeed President Robert Mugabe.

The scandal came to light last week after a financial firm, ENG Capital Management, failed to account for 61 billion Zimbabwe dollars ($74m at the official rate, $13.5m on the black market) of investor's money.

The firm, which has now been liquidated, was being run by three youths.

Phillip Chiyangwa at an election rally
Chiyangwa headed calls for black empowerment
Other financial institutions have been affected by the crackdown as some of those involved in ENG Capital Management are also directors of local banks.

On Tuesday, a magistrate ruled that Mr Chiyangwa, an MP who spearheads the black empowerment lobby, must remain in custody for another two weeks.

The magistrate said that he might interfere with witnesses.

Police said they had found a dozen cars belonging to the company at Mr Chiyangwa's house.

Police say they are investigating the involvement of several top ruling party politicians in the institution but have not released any other names.


The man behind the crackdown on alleged corruption in financial institutions is Gideon Gono, the new Governor of the Reserve Bank.

Local politicians and economists have praised him for his attempts at cleaning up the industry.

Mr Gono is said to be a no-nonsense administrator and has earned the praise of many Zimbabweans for his new monetary policies.

President Mugabe has commended the governor for a job well done and warned corrupt leaders of his party that the net is closing in on them.

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