Zimplats bosses under probe

IMPALA Platinum (Implats) recently dispatched auditors to Harare to probe management at its Zimbabwe operation, Zimplats, following an anonymous tip-off on suspected cases of gross violations of corporate governance, businessdigest has learnt.

Zimplats confirmed the audit, but declined to give finer details.

Informed sources said Implats, the world’s second largest platinum producer, sent Ernst & Young chartered accountants from South Africa to investigate allegations of flouting tender procedures, especially on the construction of a multi-million dollar staff residence in Ngezi.

The audit, according to the sources, was concluded nearly a fortnight ago. Its findings are still under wraps.

Zimplats’ parent company, the sources said, commissioned a three-week probe targeting management at Zimplats which resulted in eight computers including that of the company’s CEO Alex Mhembere and the company’s  finance director, being seized.

“Following a tip-off on the company’s alleged malpractices, Implats sent auditors from the accounting firm to investigate, among other issues, how tenders for the construction of Turk Village in Ngezi were awarded,” the sources said. “The auditors, who were stationed at a Borrowdale lodge owned by the company, also looked at a vehicle scheme that was suspected to have been unfair to deserving beneficiaries reportedly not close to senior management.”

Busi Chindove, head of corporate affairs at Zimplats, said the audit was undertaken to “confirm or refute any allegations raised” adding that “all those concerned are presumed innocent until proven guilty”.

The probe, according to Chindove and sources, resulted from a whistleblower who informed Tip Offs Anonymous, an initiative taken by the private sector including Zimplats to fight white collar crime.

Chindove said: “Zimplats believes in the concept of good corporate governance. To that end it believes in the right of employees to raise alarm bells if they see any activities which in their judgment appear to be outside the tenets of good corporate governance. Hence Zimplats’ participation in the whistleblower and Tip Offs Anonymous programme.

“It is true that an anonymous report was received. Because the allegations were against senior executives, it was necessary to engage independent auditors to look into them. Zimplats ordinarily sources financial services from Ernst & Young Zimbabwe and therefore it was prudent to engage a different set of auditors to undertake the work.”

The source further claimed Zimplats had controversially terminated a contract previously awarded to Chevron, a petroleum company, to supply fuel to the largest mining company in the country but Zimplats denies the charge.

“The contract for Chevron was not terminated. When the existing contract lapsed the supply of fuel was put to tender and the result of that tender process was that Zimplats now has three suppliers of fuel who include Chevron, as opposed to the situation in the past where Chevron was the sole supplier. This obviously reduces supply risk exposure to the company,” Chindove said.

Zimplats buyer Relax Masoka earlier this month told delegates attending a buyers and suppliers workshop organised by the Chamber of Mines of Zimbabwe that fuel supplies, which are currently being supplied by three local companies, account for US$12 million of the company’s annual budget.

General engineering, according to Masoka, is the second highest cost pocketed to suppliers (US$6 million) followed by roof support, vehicle repairs and spares each accounting for US$3 million annually.

Meanwhile, Implats last week reported a 7% output rise in the first quarter buoyed by better performance at Zimplats. The group announced that platinum production rose to 441 000 ounces on the back of a 22%production surge at Zimplats, which came after the commissioning of one of its capital projects.

 

Bernard Mpofu

Top