MP alleges state mining claims lost after directors failed to renew licences

HARARE — Government-owned mining claims in Rushinga were allegedly lost after directors deliberately failed to renew them, allowing a private company to take over the claims, Parliament has heard.

The allegations emerged during debate on a Portfolio Committee on Industry and Commerce report into Zimbabwe’s fertiliser value chain, with lawmakers calling for investigations into corporate governance at state-controlled companies.

MP Corban Madzivanyika told the National Assembly, last week, that G&W Industrial Minerals, a government-controlled company operating dolomite claims in Rushinga, lost mining claims following actions allegedly involving company directors and officials linked to the Industrial Development Corporation of Zimbabwe.

“At some point in 2016 there about, some of the directors of this company which were controlling G & W and other former IDCZ colluded to create a special position for a new company called Selbro Mining,” Madzivanyika said.

“The directors of both companies colluded to deliberately not renew mining claims that are owned by the Government. When they colluded they did not renew and the new Selbro Mining went on to claim those claims for the use of mines.”

He said the Ministry of Mines later confirmed the claims belonged to the new holder because G&W had failed to renew them.

“The Ministry of Mines confirmed the claim belonged to them because there was no renewal,” Madzivanyika said.

He described the alleged conduct as evidence of deeper corporate governance problems within state-controlled companies.

“What I am seeing here is a pattern which is being introduced by the directors, those who had the right to run our companies or public companies,” he said.

“This is a classic example of insider trading which creates corruption. Government assets are stolen whilst we are watching.”

Madzivanyika questioned how state assets could be transferred out of government control without consequences.

“Who is that person who is bigger than the Government to take Government assets and go with them scot-free? Who is that person who has the power to take NRZ from the Government? Who is that person who has the power to take what belongs to Zimbabwe and personalise it?”

“This is a testament to deeper and bigger corporate governance problems in this country.”

Zengeza West legislator Innocent Zvaipa, separately told Parliament that lawmakers had encountered concerns involving a government-funded company during a fact-finding visit to Rushinga.

“There is a company in Rushinga where we visited. When we got there, we saw two companies that are operating and yet the Government funded them,” Zvaipa said.

“When we questioned them, we were told that the CEO of the company willingly did not renew the licence and yet he had his own company which he wanted to register to mine there.”

Zvaipa questioned why no arrests or prosecutions had followed.

“The person who was funded by the Government was not prosecuted or arrested and that person is benefiting from that.”

“Who are those people who are spending Government funds and yet they are not being arrested? We want those people who are receiving funds from the Government to be prosecuted or arrested. Those people must be held accountable because they are overspending government funds.”

Madzivanyika also raised concerns about the governance structure linking the Industrial Development Corporation of Zimbabwe, Chemplex and companies in the fertiliser value chain.

He said some of the same directors served across several entities, raising questions about independence and conflicts of interest.

“It is so wide that the IDCZ are the same directors of Chemplex and Dorowa. So what good does this do when they hold meetings? They get what are called directors’ fees in all these companies. What kind of corporate governance are we practicing? This is too dirty. Are we short of people in this country?” he said.

“There is no independence in the management of government affairs or corporate affairs. This is very fundamental Madam Speaker.”

Zanu PF Chief Whip Pupurai Togarepi also called for further scrutiny of the fertiliser value chain, saying Parliament should summon officials from the affected companies.

“I was particularly pained by a situation where Government was running a mine in Rushinga. They said the mine is not maybe profitable, they closed the shop and they went behind the back door and said, we can run the same company but now all of a sudden, the same people who recommended that maybe it is no longer good to mine are now making money out of the same mine. We cannot allow that,” Togarepi said.

“We cannot just debate here, we really need to see the whole value chain, especially the Chemplex.”

He called for officials from Rushinga, Dorowa and Sable Chemicals to be brought before Parliament to explain the structures and identify who was benefiting from them.

“Who is benefiting from them and if we are not getting the fertiliser that we want, we end up importing fertiliser that is expensive yet we have structures within this industry that can give us reasonable prices for fertilisers,” Togarepi said.

“We cannot punish the people of Zimbabwe.”

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