THE Zimbabwe Anti-Corruption Commission (Zacc) has launched a fresh investigation into allegations that Zanu PF bigwigs unjustly benefited from lengthy leases from the ailing Cold Storage Company (CSC), prejudicing the state of millions of dollars.
Some of the lease agreements for the industrial and
commercial properties under 35-year leases are equipped with water pumps,
drinking ponds, dip tanks and paddocks with a capacity to hold a minimum of 200
cattle and a maximum of 500. The commercial stands also include employee
accommodation.
The leases, granted to the bigwigs for a song, were exposed
by the auditor-general (AG) Mildred Chiri, in her 2016 forensic audit, which
implicated senior Zanu PF officials, including secretary for administration
Obert Mpofu and late vice-presidents John Landa Nkomo and Joseph Msika.
Former CSC CEO Ngoni Chinogaramombe was also named in the
report. Following the explosive forensic probe into CSC dealings, a
whistleblower recently alerted Zacc to investigate suspected corruption into
the lease agreements.
Zacc spokesperson John Makamure confirmed yesterday that an
active investigation was underway. He said: “Yes, the matter is under
investigation, but I cannot divulge any more details.”
It is not yet clear whether the named officials in the
forensic audit have been questioned yet. Zacc is investigating how the CSC
management unprocedurally approved to lease its vast property portfolio to 247
tenants who were granted long leases, some spanning up to 40 years and expiring
in 2040.
A former CSC employee, recently, wrote a damning report to
Zacc chairperson Loice Matanda-Moyo calling for a review of the findings of the
AG’s forensic audit.
Chiri’s report had raised a red flag over why CSC entered
into lease agreements without proper “standard lease rates/charges . . . and
documentary evidence to support the rates applied”.
The whistleblower’s letter to Matanda-Moyo reads: “I write
to your honour with grave concern from the findings of the above report (AG
forensic report). As a stakeholder in the Cold Storage Company, I strongly
believe it is imperative that you look into its findings. I believe this report
details the deadly misgivings that led CSC going belly up.
“The report clearly details how a cabal of
institutionalised corrupt CSC stalwarts set to take advantage of the company’s
lack of structure, proper procedure, corporate governance checks and balances
to loot from the state and people.”
After the CSC audit, Chiri then wrote to the firm’s
management requesting for unaudited books of accounts.
In a letter dated February 16, 2018, Chiri said: “I will be
conducting a follow-up exercise on the submission of financial statements from
February 19, 2018 and we would like the following documents to be ready.
“Board minutes for 2011, 2012, 2013, 2014, 2015, 2016,
2017, CVs for all board members, personal files for all senior accounts and
internal audit, ledgers. . . and management accounts.”
Several of the properties were leased to now deceased Zanu
PF bigwigs and they are likely to have been taken over by their respective
families.
Chiri’s forensic audit report published in 2016 shows that
Mpofu, who at one time boasted to be one of the country’s largest cattle
ranchers, is renting a property measuring 2 000 square metres for US$841 per
month.
Repeated efforts to get a comment from Mpofu were fruitless
as his mobile phone went unanswered several times.
Nkomo, who died in 2013, had entered a 35-year lease
agreement with CSC in 2005 for a 2 000m2 property for US$252 per month. Msika,
who was vice-president between 1999 and 2009, was renting a property measuring
2 000m2 for a monthly fee of US$298.
Chinogaramombe was also renting a 2 000m2 property for 30
years at a cost of US$1 584 per month. Retired Major-General Jevan Maseko, who
died in 2013, was granted a lease for 1 700m2 for US$843 monthly rentals.
Former diplomat, the late Chief Neville Ndondo was granted
a 35-year lease with exclusive rights to occupy a property measuring 1 600m2.
The forensic audit report also underscored that while CSC
was leasing its assets, the firm’s management led by former executive
Chinogaramombe was allegedly paid salary “advances in excess of salary arrears
owing to management” at a time the embattled firm was owing US$4 million to
workers “for unpaid gross salaries and allowances”.
It (forensic audit report) also observed that “CSC
management were owed a total of US$273 152,74.”
“As at June 30, 2015, against the long outstanding arrears
to other employees, CSC had overpaid salaries to two management employees.
Messrs Sanyika and Zvaita received salary advances of US$313,67 and US$66,79
respectively in excess of their salary accruals,” the AG’s forensic report
reads.
“Despite CSC being unable to pay employees outstanding
salaries, for the period under review, the company advanced certain staff
members within the management grouping, personal loans worth US$74 531,25 at an
interest rate of 8% per annum and the balance outstanding of US$26 150,00.”
To avert liquidation, CSC was placed under a corporate
rescue plan superintended by Ngoni Kudenga of BDO Zimbabwe Chartered
Accountants.
At the time of publishing, Kudenga had not responded to
questions on how much CSC is owed in rental arrears.
But sources close to the embattled firm, which used to
handle up to 150 000 tonnes of beef and associated by-products a year, while
exporting beef to the European Union (EU), told the Zimbabwe Independent that
some of the Zanu PF bigwigs had stopped paying their rentals “a long time ago,
complicating matters to turn around the company”.
Kudenga’s new role in the affairs of the troubled company
has also come under scrutiny, as CSC struggles to escape from the stormy waters
of insolvency and total collapse.
He was appointed as CSC judicial manager by Agriculture
minister Anxious Masuka in December last year. His role to save CSC from
collapse is being challenged by the Allied Food Workers’ Union of Zimbabwe
(AFWUZ) —which represents the company’s workers. Through its lawyers, Mathonsi
Ncube Law Chambers, AFWUZ applied to the High Court challenging Kudenga’s
suitability to preside over CSC affairs.
“It is a fact that the two are long-time business
associates. In fact, when the Honourable Minister of Agriculture (Masuka) was
the chief executive officer for Zimbabwe Agricultural Society, Mr Ngoni Kudenga
was his principal as the president of the Zimbabwe Agricultural Society,” part
of the application by AFWUZ lodged at the High Court reads.
“This cronyism will clearly compromise our clients’
interests and therefore submit that Mr Ngoni Kudenga is not independent,
competent and clearly conflicted. The allegations raised against Dr Masuka in
HC177/20 are of a serious nature and hampered the revival of Cold Storage
Company (Pvt) Ltd.”
As part of this running investigative series into the
dramatic collapse of CSC, this newspaper on February 2 revealed how a
consortium of local industrialists and companies — CSC 2016 — is angling to
take over the defunct company through a US$225 million bid.
The company was authorised by the government to evaluate
assets belonging to the meat processor despite a contract between the state and
Boustead Beef Limited, which was later reportedly revoked.
The consortium is led by former CSC chief executive Eddie
Cross and Presidential Advisory Committee (Pac) member Busisa Moyo. Moyo was
appointed to chair the Zimbabwe Investment and Development Authority (Zida) by
President Emmerson Mnangagwa in March 2020. Zimbabwe Independent
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