AG: Supa Mandiwanzira gets $200K car loan from own parastatal

Source: AG: Supa Mandiwanzira gets $200K car loan from own parastatal | The Source June 23, 2016

HARARE (The Source) – ICT Minister Supa Mandiwanzira broke the rules and got a $194,000 loan from a parastatal under his Ministry for the purchase of a vehicle, a report by the Auditor general reveals.

The Auditor General’s department, in its new report on government ministries, also revealed how the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) loaned $10 million to the ministry for its acquisition of a controlling interest in Telecel Zimbabwe. The loan was extended with no Treasury approval.

“The Ministry (of ICT, Postal and Courier Services) got loans amounting to $10 million, $194 564 and $95 000 from POTRAZ for the acquisition of government’s shareholding in Telecel Zimbabwe and purchasing of the Minister and Deputy Minister’s (Win Mlambo) vehicle respectively, without Treasury concurrence. These amounts were still outstanding as at the time the audit was concluded,” the report says.

The Ministry also borrowed an additional $58 888 from POTRAZ and state owned mobile operator NetOne.

Says the Auditor General: “The ministry did not provide documentary evidence to show that they were given treasury authority to borrow from state owned enterprises. Since the amount of $58 888 relates to appropriation expenses by the ministry, the expenditure should be accounted for in the 2015 financial year.”

“In addition, the ministry did not provide documentary evidence on how it intends to account for the $10 289 564 for the purchase of shareholding in Telecel Zimbabwe and the purchase of the Minister and Deputy Minister’s vehicles.”

Telecel is the country’s smallest mobile telecoms firm with 2,4 million subscribers. Earlier this year, Mandiwanzira said the $40 million purchase of Telecel had been done through ZARNet, a struggling Internet Service Provider wholly owned by the government through the ICT Ministry.

In April, pension fund NSSA announced it had put up $30 million to buy the Telecel stake, a deal it described as “too compelling” to pass over. Until the Auditor General’s report, it had been unclear how government had raised the other $10 million.

NSSA chairman Robin Vera said then that the $30 million advanced to ZARnet was not a loan but quasi-equity participation funding, which would give NSSA equity control of Telecel Zimbabwe until certain conditions are met by ZARNet.

“In all circumstances, NSSA will emerge as a significant equity holder in Telecel Zimbabwe Limited”.

On February 25, the Amsterdam-headquartered telecoms giant VimpelCom said the deal was yet to be completed. Mandiwanzira told Parliament that the money for the stake was yet to be transferred to Vimpelcom due to cash shortages in Zimbabwe.

Telecel’s remaining 40 percent is owned by Empowerment Corporation, a consortium of local shareholders. The group has opposed the sale of Vimpelcom’s 60 percent shares, although Mandiwanzira has claimed that they too had approached NSSA to buy their shareholding.

POTRAZ’s part in the purchase of a stake in a company it is supposed to supervise, and its loan to Mandiwanzira, may raise fresh questions about its role as a regulator. The authority already faces criticism of being unfair in how it treats the licensing of operators.