THE Ziscosteel scandal, which involves looting of public resources by politicians and top management of the company, deepened this week as it became evid
ent that a number of ministers were involved.
Information gleaned from various sources shows that Indigenisation and Empowerment minister Samuel Mumbengegwi, Science and Technology minister Olivia Muchena and Small-to-Medium Enterprises Development minister Sithembiso Nyoni, among others, had allowances and air tickets paid for them by Zisco while on missions that had nothing to do with the parastatal.
Sources said Higher Education minister Stan Mudenge and the late Zanu PF MP Gibson Munyoro were hosted by Zisco subsidiaries in Botswana under unclear circumstances. Former Zanu PF MP Tirivanhu Mudariki is said to have also benefited through hotel bookings done for him using public resources. No comment could be obtained from the ministers.
However, a letter obtained from Zisco shows Mumbengegwi — who was at the time Industry and International Trade minister in charge of Zisco — was paid by the state-owned steel giant’s Botswana subsidiary a US$3 000 “allowance” while he was attending a Sadc meeting in Gaborone on July 17 2003.
The letter, dated July 17 2002 and written by Zisco finance executive Ben Manyunyire to Tswana Iron & Steel MD James Chininga, says: “Please kindly make available to them (Mumbengegwi and his team) US$3 000 or equivalent in Botswana Pula and invoice Zisco through the inter-company balances.”
Mumbengegwi was travelling with a Ms FA Makombe and a Mrs Nyagweta for a Sadc meeting from July 22-28. Prior to that, two other officials from Mumbengegwi’s ministry, a Mr V Vengesa and a J Chigwedere, had on August 15 2002 been paid US$932 as “subsistence allowances” while visiting Ramotswa/Tswana. Ex-Zisco MD Gabriel Masanga authorised the payments.
Sources said that Zisco subsidiaries also paid Botswana Pula 3 152, 80 for Mumbengegwi’s hotel bookings at Cresta Lodge on May 8 2004 on an unexplained visit to that country. He stayed in room number 9007 and his invoice number was 76176.
More than P150 000 was spent on hotel bookings for top government officials and Zisco managers, especially at the five-star Grand Palm Hotel Casino & Convention Resort in Gaborone where they spent public funds on food and drink at the Kalahari Bar, often over weekends.
Muchena, Nyoni and Mudariki had air tickets bought for them by Zisco’s sister companies via Koy Tours and Travel on June 17 2004 for dubious trips between Harare, Johannesburg and Gaborone. P16 625 was paid for their tickets. Muchena’s ticket was for the Harare-Johannesburg-Gaborone-Johannesburg-Harare trip and its invoice number was 764.
Nyoni and Mudariki’s tickets had the same details. Another ticket was bought for Mudariki on May 24 2003. Altogether P92 924,40 was paid for the air tickets, including those of Zisco directors who would choose to meet in Gaborone even if they were all from Zimbabwe.
Zisco directors were being paid up to P90 000 per head annually as sitting fees.
Sources said the three-member NECI team which went to Botswana was told that Mudenge and Munyoro were also hosted there. The team got its information from Chininga, business manager Shelton Chivhere and accountants William Oddoye and Benson Mburu. Details on payments were not obtained.
Sources say NECI was told there were several other ministers and MPs involved in the Zisco scandal, which government is trying to suppress despite its anti-corruption posture.
Zisco was heavily prejudiced through the sale of steel billets as scrap metal and manipulation of supply contracts. The plunder was said to have been rampant in all Zisco entities in Redcliff, South Africa, Botswana, Namibia and Zambia.
NECI has since recommended the prosecution of senior Zisco managers, including Masanga and marketing executive Rodwell Makuni, who were central to the issues. Government is said to be in possession of a lengthy Zisco document reacting to the scandal which authorities want to give prominence to.
Sources said there were many questionable payments that Zisco made to South African companies, including Ramotswa’s controversial R1,6 million payment to Macsteel in 2004 for “technical services”. Zisco also paid Chartwell Capital Group more than R470 000 to restructure its balance sheet and debt profile.
Exchange control regulations were said to have been breached on occasion.
Between September 2001 and June last year Ramotswa paid the Minerals Marketing Corporation of Zimbabwe (MMCZ) US$5 million. It also paid R6,4 million. Its total purchases from MMCZ between January 10 2003 and September 30 2005 were US$7,3 million, as well as R45,6 million.
“The problem with these payments is that necessary reconciliations of Zisco/MMCZ accounts were not being done for the company to tie specific invoices to the payments done for exports from Zimbabwe,” a source said.
“As a result as at June 31 2005 R39 218 444,43 and US$2 269 483,71 were still outstanding in terms of un-acquitted DC1 forms. Chivhere told NECI that efforts were being made to pay but Zisco owed a lot of money to its subsidiaries who want a debt offset arrangement.”
There were a lot of other questionable payments made covering airfares, hotel bookings, purchases of goods, forex, PR and donations, allowances, fees for directors, management expenses and entertainment.
Ramotswa bought forex from company officials despite having US dollars and South African rand foreign bank accounts. In 2003, for example, it bought R43 992, US$10 548 and P87 575,13 from Chininga, business manager Shelton Chivhere, Zisco company secretary Teddy Mapenzauswa and board member George Chikumbirike. Chininga and Chivhere were singled out by NECI as having been involved in a “lot of financial abuse”.
Last year Ramotswa again bought R24 866, US$3 595, P43 274,45 from company officials in violation of exchange control regulations. Suspicious donations gobbled P60 000, while P20 000 was spent on goods for Chivhere and others.
Entertainment allowances took about P50 000 but NECI established some were fake. For instance, it found out that on May 8 2003 P300 was paid to “NECI officials” when in fact no one from the team was in Botswana at the time.
“The question that quickly comes to mind is how many such payments were made to faceless people in the name of entertainment,” a source said. “The evidence of massive corruption at Zisco is overwhelming and senior government officials were involved. Trying to cover this up won’t work.”