Millions lost in Marange scandal | The Herald

Millions lost in Marange scandal | The Herald

via Millions lost in Marange scandal | The Herald February 4, 2014 by Lloyd Gumbo

An audit carried out on the wholly State-owned Marange Resources Diamond Company has revealed that the Government was prejudiced of millions of dollars as management raised inflated procurement receipts and pocketed the difference.

The firm bought heavy duty mining equipment which cost millions of dollars, but management would generate receipts inflating the figures to “alarming levels”.

Mines and Mining Development Minister Walter Chidhakwa last month ordered a probe into the firm’s operations following allegations of malpractices, poor corporate governance and non-compliance with laid down procedures.

The audit was expected to focus on diamond sales, production, technical and operational management.
Top management at the firm were sent on leave to pave way for investigations.

The team is expected to submit the audit report with revelations of the abuse of funds to Minister Chidhakwa at the end of the week when he returns from the Mining Indaba in South Africa.

Insiders told The Herald that  auditors detected that top management defrauded the State when procuring equipment and goods.
“What has been picked up so far is that management was stealing from the State through procurement,” said a source.

“They were inflating figures to alarming levels for personal gain, but we are glad that has been detected by the audit team. They (auditors) are still consolidating how much in total the State lost, but it should be millions.

“In terms of salaries they paid each other, it’s not as exorbitant as other companies that have been exposed. I think they were okay on that front.”

Another source said: “There are indications that management at Marange (Resources) may have been doing that in connivance with officials from other parastatals under the ministry.

“It was a well-orchestrated system as they kept inflating figures while in other cases they claimed to have procured goods yet they would not have bought anything.

“All these things were done for personal benefit. We also suspect that there may have been conflict of interest in some of the companies that supplied the firm with goods. Some of those companies’ ownership is also under probe.”

Minister Chidhakwa last week said he was still to get feedback from the audit team.
“I cannot comment on that because they (probe team) are still doing the job we asked them to do,” he said. “They are yet to report back, but I think they will bring it very soon.”

Marange Resources, one of the seven diamond miners in Chiadzwa, is wholly-owned by Government through the Zimbabwe Mining Development Corporation.

The investigations were expected to cover the period between January and December 2013, while issues that required probing outside the specified period could also be pursued.

Among people sent on forced leave was chief executive officer Obert Dube, his personal assistant Sydil Dhliwayo, chief finance officer Wilfred Munemo, procurement executive Piri Mukono, human resources executive Elijom Shumba, chief security officer Numeri Muwandi and sales and marketing executive Wilfred Munamati.

The investigating team was also tasked to establish if the Marange Resources board had carried out its oversight role as guided by good corporate governance principles and ethics.

It was also expected to investigate if management was conducting its duties “effectively and efficiently as guided by its job description, the key result areas and company policies and procedures manuals”.

A financial audit for January 2010 to December 2013 will be carried out, in addition to methods used to determine the firm’s remuneration structures.

The team was also expected to establish the fees and allowances paid to board members against those stipulated by the shareholder and examining the human resources recruitment criteria.

There have been concerns over remittance of diamond revenues, with allegations that some miners were understating figures.
During a tour of diamond mining companies last year, Minister Chidhakwa expressed concern with Marange Resources’ low revenue remittances to Treasury.

He said the company, despite being wholly owned by the State, failed to remit “reasonable” money to Government.
Minister Chidhakwa said other firms in which the State had 50 percent shareholding remitted more than Marange Resources.

He said there was need to ensure tight security in production and marketing of Zimbabwe’s minerals, saying Government would investigate allegations of loopholes in accountability.

 

COMMENTS

WORDPRESS: 8
  • comment-avatar
    John Thomas 4 years

    The politician is upset that the managers are stealing before him and his friends. What is the world coming to? Everybody knows that it is politicians first.

  • comment-avatar
    Todiyi Senseni 4 years

    Where is the audit that was done by the late Cininga Chindori?

  • comment-avatar
    Mukanya 4 years

    True!! Obert Mpofu superitended the looting.

  • comment-avatar
    Challenge Ndlovu 4 years

    When is the minister going to look at Hwange colliery. The employees are owed 8 months salary & there is an audit report that says 20million went missing. The govt is not worried that the company is just collapsing at its nose. The minister is just drunk like his name being fooled by his deputy who masterminded the looting

  • comment-avatar

    They all stole when they saw Mpofu getting huge commissions. Everyone on the gravy train

  • comment-avatar
    gorongoza 4 years

    Obert Dube and Fred Moyo have always been a corrupt lot since their days at Shabanie and Mashaba Mines. Obert now owns almost half of Svishavane in properties. Him and Fred continue to steal left right and centre. Fred has been rewarded with a deputy ministerial post even when his case of defrauding a mining company is still in the courts.

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    Sekuru Mapenga 4 years

    Chidhakwa should re-visit the audit done by the late Chindori Chininga and he should then ask former Minister of Mines, Obert Mpofu, for an accounting of his vast wealth.
    The truth is that we can point a finger at this person or that person, but in reality Zimbabwe has become one of the most corrupt countries in the whole world and it is Mr Mugabe that has condoned it all. His price – loyalty and support for him to stay in office for ever and ever and ever.

  • comment-avatar

    Ths source is the herald this should be true. Its a government instituition by another.