$20m unaccounted for at Hwange, board mum on explosive report

via $20m unaccounted for at Hwange, board mum on explosive report – DailyNews Live 8 OCTOBER 2013 

Hwange Colliery Company Limited (HCCL) is sitting on an explosive forensic report detailing a number of financial and procurement irregularities, which allegedly occurred under Deputy Mines minister Fred Moyo’s watch.

Despite promising to look into the issue of “legacy debts” running back to 2007 in its December 2012 annual report, the Zimbabwe Stock Exchange-listed miner’s board has failed to provide indications yet on what it has found out or discovered through its forensic audit.

“The company remained troubled by legacy debts accumulated over the past five years. These debts have been subjected to a forensic audit and when verified, a comprehensive plan to discharge the liabilities will be put in place,” HCCL’s chairman Farai Mutamangira said in the report.

In the absence of Mutamangira, the company’s managing director Jemester Chininga yesterday declined to comment on the issue, saying he was in meetings.

However, businessdaily can reveal that a January 2013 BCA Consulting report had noted that nearly $20 million was unaccounted for at the western Zimbabwe miner through questionable supply deals, which Moyo — the then MD — was aware of.

These unrecognised liabilities and possible prejudices, included an $800 000 payment to Muntucap Associated Carriers for the “transportation of coking coal” to the Democratic Republic of Congo,

Alki Logistics and a near $1 million acquisition of second-hand rigs from Drill Resources (Private) Limited.

According to the hard-hitting report, there were instances of double-payment and invoices amounting to $6,3 million — and belonging to Otto Simon — were not captured in HCCL’s accounting system.

Even though the company was wracked by poor cash flows, suppliers such as Bruno Enterprises were beneficiaries of advance-payments and often handed contracts to supply “maize meal, sugar beans and protective clothing”.

Meanwhile, the company suffered a $3,2 million after-tax loss in the half year to June 30 — due largely to burgeoning  debts that have seen the company provisioning them at $150 million.

Efforts to secure comment from Moyo were unsuccessful yesterday, as his mobile phone was unreachable.