DETAILS of alleged looting by senior politicians and officials at state-owned steel-making enterprise, Ziscosteel, started surfacing this week with
a number of company officials involved in the abuse of funds being named.
Investigations by the Zimbabwe Independent found that a long list of Zisco managers and their counterparts in the public enterprise’s subsidiaries in Botswana — Ramotswa Steel & Iron Co (Pvt) Ltd and Tswana Steel & Iron Co (Pvt) Ltd — were deeply involved in the scramble for the ailing steel giant’s resources.
Senior politicians — including members of the state presidency, ministers and MPs — also grossly abused public assets by claiming large unaccounted for allowances from Zisco after travelling on business that had nothing to do with the company. Others benefited through dubious contracts and a supplies over-pricing rip-off.
Procurements were also used as a window for rent-seeking behaviour as the process is not open to competitive bids. At the Zisco subsidiaries in Botswana, only one person, a business manager, handles purchases.
“The Zisco scandal involves government and company officials who had been claiming money without justification and unprocedurally for a lot of things, including allowances, directors’ sittings, and management fees,” a source said.
“Some Zisco officials took cash for private use using all sorts of methods for self-enrichment. Others abused credit cards, petty cash and took gross advantage of a weak accounting system, purchases, procurement, public relations campaigns, and the servicing and repairs of vehicles. There was also the issue of hotel bookings and entertainment allowances in which a lot of money was abused or siphoned.”
Thousands of United States dollars were spent entertaining government officials and their hangers-on at the Grand Palm Hotel Casino & Convention Resort in Gaborone where they squandered public funds on expensive drinks and food during weekends.
Sources said former Zisco group MD Gabriel Masanga, current and former directors David Murangari, Zvichinei Churu, Dr MN Abubasuthu, Dr Ndabezinhle Dube, George Mlilo (Transport permanent secretary), Grace Chella, MJ Harris, Professor Alaphia Wright, and George Chikumbirike, among others, received monies or incurred dubious expenses for the company, raising eyebrows of National Economic Conduct Inspectorate (NECI) investigators.
A three-man NECI team investigated the issue which covered events from 2002 to last year. It compiled a damning report at the end of last year which has now been buried by a government fearing the corruption scandal could rock it to the foundations.
Sources said some of the names mentioned are Zisco spokesman Augustine Timbe and others linked to the company such as SD Chawasarira, ES Barlow, A Mafurirano and a Mapenzauswa. They got allowances.
Sources said Chikumbirike was paid US$1 225 on July 14 2003 as allowance through a telegraphic transfer into his ABC Botswana Bank Account BCWHIG001CALUSD0007. He also received US$1 000 for school fees on January 23 2004 from Masanga’s company facility. Masanga used P1 230,72 through his FNB business credit card at Victoria Falls, while Murangari got R300 to pay the University of Cape Town from the company.
Dozens of Zisco workers — including drivers — have also been recipients of company funds for shady payments.
“For instance, a total of about Pula 26 662,85 was spent on one driver by the name Mtinta to take Masanga’s car for service in Botswana,” a source said. “About P49 225,35 was spent on another driver, Bojosi.”
Businessman and former Zanu MP Tirivanhu Mudariki and an R Makuni — who seems well-connected — have come up as some of the people who were involved in the Zisco affair where serious abuse of public resources has been detected by NECI.
Industry and International Trade officials V Vengesa, J Chigwedere, FA Makombe and Mrs Nyagweta, and a host of others also received questionable payments from Zisco.
Sources said Ramotswa/Tswana steel MD J Chininga and the companies’ business manager Shelton Chivhere were key players. The two were interviewed by NECI in Botswana between July 24 and August 3 last year, sources said.
Thousands of US dollars were involved in payments. In the case of the controversial purchase of Ramotswa/Tswana Steel by Zisco and now current attempts to sell off the companies, millions of dollars in hard currency were at stake.
Information gathered through interviews showed that on some occasions Chininga and Chivhere had purchases made on their behalf even for small items such as ladies’ handbags.
“Chininga bought two ladies’ handbags valued at P170 using company funds. Furniture has also been bought under unclear circumstances for the management, for instance Chivhere bought furniture for a Zisco official known as Mafika who was in Botswana,” a source said.
“When Mafika was transferred to Namibia, he took all the furniture with him. The company lost money. In another incident, Chininga claims that Masanga had authorised him to buy furniture for Chivhere without the board’s approval. All these things are not documented.”
Sources said there were many instance of such abuses.
“The petty cash in Botswana is open to abuse as there is no specific limit. It can be P50 000 or P100 000. Our managers claim that we have to keep a lot of cash because banks are far away,” a Zisco official said.
“Sales proceeds, eg from one of our companies Fullfit, are also receipted as petty cash and stashed in a safe. The money is then used on such sort of expenses as entertainment allowances for senior officials, gifts for visitors, and public relations campaigns that include paying Botswana MPs, police, immigration and customs officials.”
Zisco, through its subsidiaries, has had to spend funds in a public relations blitz that appeared to have been the entry point into the company vault to access money for personal use.
“At one time P7 500 was donated to a Botswana MP in the name of public relations. On March 15 P1 000 was taken, on March 19 last year P1 000 was also taken by Chininga for PR, on April 15 P5 000 was taken, on May 12 P4 000 was taken, all this money purportedly for PR,” a source said.
In the end, millions in forex of public funds were spent or lost through various loopholes and deliberate siphoning, the source said.
(To be continued next week.)