By dragging its former executives to court on fraud charges, Turnall Holdings Ltd could have opened a can of worms and set the precedence for many companies in similar dilemnas to follow suit.
By Chris Muronzi
The prosecution of former Turnal MD Abel John Jere, former marketing director Edwin Kondo and technical director Francis Chigwedere on charges of embezzling US$2,5 million is a departure from the corporate norm.
The corporate world is akin to its underworld contemporaries in terms of how they manage such cases.
The Mafia makes its members swear an Omerta, a vow to keep things of the organisation shrouded in secrecy and never to share with outsiders no matter the circumstances.
For disobeying the oath, a member is put to death.
It is little wonder prosecuting authorities the world over have a tough time getting volunteers to “sing or rat”, Mafia lingo for testify.
While executives may not be initiated in the same manner, the striking similarities on silence and secrecy cannot be missed.
Traditionally, when company officials such as chief executives and managing directors of top companies are sacked for various indiscretions such as financial impropriety, the cases are quickly swept under the carpet. The culprits are afforded advertising space in national newspapers and get flattering thank yous and wished all the best in future endeavours.
To the public, its just a mere case of a corporate leader stepping down to pursue better opportunities.
Soon after, an Omerta equivalent is sworn around the incident with anyone seeking to understand the circumstances around the departure being fed the official line.
In some cases, mutual separation agreements are signed between the parties with hefty amounts being paid to the culprits in the form of golden handshakes and everybody forgets about it. A scene in the film Godfather 2 perhaps sums this up nicely.
“I never knew no godfather. I got my own family, senator,” Frank Pentangeli ( played by Michael V. Gazzo), a character in the film, says at a senate hearing while responding to a question on whether he belonged to the Corleone (crime) family and whether Michael Corleone was the Godfather. This is after his brother had mysteriously appeared in court.
“Mr Pentangeli, you are contradicting a sworn statement you’d previously made to me and signed. I ask you again, sir, here and now under oath… were you at any time a member of a crime organisation… headed by Michael Corleone?” the Senator enquires in the film.
From there, Gazzo conveniently losses his memory. What follows is a hilarious dialogue which rivals only the sitcom Two and a Half men in entertainment.
Back home, the Jere case is not as hilarious.
The Jere incident is also a departure from the norm and could provide insightful information on the goings on in the top echelons of power in corporate Zimbabwe.
The Jere affair has proven that despite the rosy and sometimes colourful announcement, there is always a huge fire raging behind the scenes.
According to state papers, the trio, with their alleged accomplices, Elizabeth Mawukwa, who is still at large, and the now-deceased Robert Dube, hatched a plot to defraud their employer from September 2010 to the end of 2014.
The group allegedly approached Auto Control MD Adam Muhita and misrepresented that they had been authorised by Turnall board members to access their bonuses through his company, so that other employees would not know they had been given bonuses.
Jere then allegedly instructed Muhita to raise fictitious proforma invoices, giving the impression that Auto Control had provided services to Turnall Holdings.
Jere would then ensure money was transferred to Auto Control’s bank account, where Muhita would withdraw the money and hand it over to the accused.
The state further alleges Muhita made the accused sign in a diary every time they collected money from him and the diary has been recovered and will be submitted in court as an exhibit.
But the Jere affair has also raised questions on the level of disclosure on the incident on whether majority shareholders have more rights than minorities.
Although minorities were in the dark, their counterparts with board representation were fully aware of what was happening in the company.
Very recently, a former CE of a listed firm confided he had stepped down from the respected firm for his own safety after the majority shareholder, who until very recently was a respected member of Zimbabwe’s corporate world, roped in the dreaded members of the Central Intelligence Organisation to scare him over operational differences.
He says after the many visits to various influential offices, he decided to call it quits.
“Instead of running the business, I was spending too much time firefighting with this guy and using my connections to make the harassments stop,” the former CE says. “I was placed under surveillance and so on. I decided I had had enough and quit.”
At the time of his departure from the firm, it was maintained as just another case of a CE leaving to pursue other interests.
When another CE was fired years back, he was given carte blanche rights to the announcement. And he authored a nice announcement for himself.
“It was a bloodless affair. I gave him the right to write the announce of his departure in his own words,” a chairman of a company said.
Another chairman of a listed company where rumours of impropriety swelled in the past few years, this week pulled a Pentangeli, asking “which case? What did he do?”
In typical fashion, a CE and FD had been sacked on the same day. The market woke up to news they had been serving notice. Yet the chairman stuck to his guns and maintained ignorance.
“They left to pursue opportunities in the region,” he insisted.
But sources at the company said the executives had been found guilty of impropriety when an audit into the company was instituted.
Corporates have also come under immense criticism over their management of such issues. In a country where white collar crime is not treated sercely, it remains to be seen on what the outcome of the case will be.
A case in point is the National Social Security Authority (Nssa) managers case.
The top Nssa executives were accused of various indiscretions such as allocating themselves preposterous bonuses and ouratgeous loans among other things.