Chidakwa admits ZCDC was illegally formed

MINES minister Walter Chidakwa yesterday admitted before Parliament that the new diamond company, Zimbabwe Consolidated Diamond Company (ZCDC), was illegally formed with no legal instrument to support it.

Source: Chidakwa admits ZCDC was illegally formed – NewsDay Zimbabwe December 6, 2016

BY VENERANDA LANGA

Chidakwa made the remarks when he appeared before the Daniel Shumba-led Parliamentary Portfolio Committee on Mines together with his deputy Fred Moyo and ministry secretary, Francis Gudyanga to answer questions over corporate governance issues that have been lacking in the mining sector.

“The ministry will ensure that all government companies are formed correctly from a legal perspective,” Chidakwa said.

MPs from the committee also grilled Chidakwa over the composition of the ZCDC board, which they said was appointed without taking into cognisance corporate governance issues, resulting in 90% of the board members being from Manicaland, which is where Gudyanga comes from.

They said the board must also reflect proper gender representation.

“When we re-do the board, we will take into account geographical and gender representation. It can never be defended as a sound corporate governance matter,” Chidakwa conceded.

He defended the decision to let Gudyanga single-handedly run the Minerals Marketing Corporation of Zimbabwe (MMCZ) board since 2013, saying he was still waiting for the Minerals Exploration and Marketing Corporation Bill to be passed into law, so that he appoints a proper board.

But, MPs said it was not an excuse, adding a temporary board should have been appointed to plug financial leakages and dubious contracts that Gudyanga was currently being investigated for entering into with an Israeli company, Pedstock, resulting in $4 million not properly being accounted for.

“It is not fair to allude to delinquencies that have not yet been proved, and may I point out that I personally had discussions with you (committee chairman, Shumba) and Speaker Jacob Mudenda on the issue,” Chidakwa responded in Gudyanga’s defence.

But, Shumba denied having discussions with Chidakwa on the MMCZ/Pedstock issue, and Chidakwa ended up conceding that a one-man board at MMCZ was not good for corporate governance. MPs also questioned the rationale behind the wholesale expulsion of the entire ZCDC executive.

Meanwhile, Chidakwa revealed that ZCDC had delivered a paltry 924 388 carats of diamonds this year, compared to 3,2 million produced by different miners in 2015.

“The 2016 figure is low, but the explanation is that the 924 388 carats came from only two mining places instead of the nine mining places, and so we need to finalise court processes,” he said.