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ZCDC goes after former executives

by Staff reporter
04 Jun 2020 at 17:57hrs | Views
The Zimbabwe Consolidated Diamond Company (ZCDC) is repossessing luxury vehicles worth US$2m from its former executives as the diamond miner moves to reclaim its assets.

The vehicles were controversially bought in 2018 despite a directive by President Emmerson Mnangagwa for government and all parastatals to cut on spending.

The top executives including former chief executive Moris Mpofu were dismissed over corruption allegations.

Mpofu was subsequently cleared of the charges.

"The actual dismissing letter involved surrendering company property and those vehicles were part of the company property.

The dismissal letters were clear and some of those vehicles have since been recovered," said a source close to developments.

Contacted for comment, ZCDC spokesperson Sugar Chagonda promised to come back with a response but could not respond by the time of going to print.

ZCDC's multi-million-dollar vehicle purchase was made using part of the US$80m investment by the government into the diamond producer. ZCDC at the time said it desperately needed to build capacity and to enable the exploration and mining of conglomerates.

The US$80m came after the diamond producer benefited from a US$35m PTA Bank facility. Similar questionable moves around vehicle procurement and expenses have been made at the Ministry of Mines and Mining Development where at least US$1.2m is being blown on vehicle hiring annually for directors.

The latest move comes as ZCDC is currently undergoing a forensic audit aimed at ensuring transparency at the state diamond miner. The diamond producer has been running under the stewardship of Roberto De Pretto in an acting capacity while the board was in the process of searching for a new CEO.

This came after the company fired seven executives last year including then CEO Moris Mpofu as it moved to rebuild public and market confidence following allegations of rampant corruption and abuse of office by the executive team.

Last month, the ZCDC board resigned en masse in alleged protest over government's decision to award part of Chiadzwa diamond fields to Chinese firm, Anjin, citing lack of consultation. The former board consisted of Killian Ukama (chairman), Ellah Muchemwa, Elizabeth Nerwande Chibanda, Zenzo Nsimbi, Esau Chiadzwa, Alexander Mukwekwezeke, and Niya Mtombeni.

The debt-ridden ZCDC has been haunted by scandals and under-performance ever since its formation leading to perennial losses of more than US$50m in the period between April 2015 and May 2016 alone. According to the AMG Global audit report on the diamond firm, the company has been operating at a loss since its inception in 2015.

At its peak in 2012, Zimbabwe produced 12m carats, but in 2018 production was low to 2.8m carats.

Zimbabwe is believed to have the potential to account for 25% of the global diamond production and it is targeting to expand its diamond industry to 10m carats by 2023.

ZCDC was formed in March 2015 after a government decree to consolidate all diamond mining companies in Zimbabwe to form a wholly-owned State firm.

Source - Buiness Times

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