THE Parliamentary Portfolio Committee on Mines and Energy wants the Zimbabwe Anti-Corruption Commission (Zacc), police and the auditor general’s office to investigate illicit financial outflows in diamond mining, particularly the Minerals Marketing Corporation of Zimbabwe (MMCZ).
By VENERANDA LANGA
Parliament made the recommendation in a report by the Daniel Shumba-led committee which was presented in the National Assembly last week. The report was on the consolidation of diamond mining companies.
The committee said investigations of graft in diamond mining must be carried out before the end of next month. “Illicit financial outflows from the MMCZ should be thoroughly investigated by the auditor general, Zacc, and the ZRP before the end of June 2017,” the committee said.
“It will be very difficult to conduct an audit trail on some of the funds that were siphoned from the MMCZ.”
The committee said accounting systems were violated and prospects to recover $4 million which was lost through transfer of money to agricultural company Pedistock by Mines ministry secretary Francis Gudyanga would be difficult.
Some of the illicit financial outflows took place because MMCZ had no substantive general manager and board of directors since 2013.
“The parastatal is being run by a one-man illegal board comprising the secretary Gudyanga. In 2015, he paid himself $35 000 in board fees in violation of the MMCZ Act and basic principles of corporate governance,” reads the report.
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“The board should have between six to 10 members, and so technically, MMCZ has no board and board fees should not have been paid to anyone. In the absence of a board, the annual budgets of MMCZ have failed to get approval in violation of the Public Finance and Management Act, the MMCZ Act and the Audited Office Act.”
Other illicit payments that MMCZ will be investigated for include un-procedurally paying for the ministry of Mines expenses, activities and programmes, yet the ministry’s expenses were supposed to be supported by Treasury.
MMCZ failed to conduct strategic planning sessions to discuss critical issues, including the ministry’s intention to transform it into an exploration company. Parliament is waiting for the strategic meeting to take place to enable the crafting of a Bill to transform MMCZ into an exploration company.
In the 2016 National Budget Statement, Finance minister Patrick Chinamasa lamented the poor revenue inflows to the fiscus from the diamond sector.
Former MMCZ acting general manager, Richard Chingodza attributed the poor revenues to incapacity of government representatives that sat on the boards of the joint venture companies to access critical information such as production statistics, board minutes or audited financial reports.
When Gudyanga appeared before the Mines Committee this year, he said the country lost diamond revenues through leakages and smuggling, adding the loss would be quantified through a forensic audit being conducted by the auditor general Mildred Chiri.
From 2010 to 2015, government only realised $637 333 956 diamond revenue, with the highest collection being made in 2011, a figure of $168 534 967.
The committee said Zimbabwe’s Marange diamonds were also being sold for a song.
