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Shoddy deals cost Hwange Colliery $1 million

 

STRUGGLING Zimbabwe coalminer, Hwange Colliery Company Limited (HCCL)
could have been prejudiced of over $1 million in an equipment
procurement scandal whose footprints and tentacles spread to the
company’s top management, it has emerged.
The company is reeling from severe debt owed to creditors as well as
employees who have gone for years on end without getting their
salaries.
Reports from the coalminer show that the company owes its creditors
over $350 million, with workers owed in excess of $82, 5 million in
salary arrears.Investigations by this writer show that the giant coalminer procured
equipment in 2015 worth $807 725 from another company subcontracted to
the HCCL to provide services identified as Turbo Mining.
Sources inside HCCL disclosed the equipment was procured without a
board resolution, with the managing director, Thomas Makore said to
have been the one who signed off the deal on HCCL’s behalf.
“The MD (Makore) seems to have had financial interests in the entire
deal given the manner in which he was adamant the equipment had to be
procured,” said a source.
Documents and reports at hand also show that Makore was the only one
who authorized the transaction, going to the extent of avoiding junior
managers whose opinions matter regarding the suitability of the said
equipment.States one report: “The company was committed to acquiring the assets
by the managing director. It is doubtful there was consultation with
other managers.
“He (Makore) signed for the purchase of the equipment without
involving other managers such as engineering and finance. (What is
more peculiar is that) the witnesses to his signatures are officials
at Turbo Mining.”
Hwange Colliery Company Managing Director Thomas-Makore
According to the report, the assets were given a face value of $2, 025
million but evaluations by two independent  institutions placed the
assets at over $807 000.
Worse still, some of the said equipment, according to audit reports,
was not working while some of it was said to be faulty and constantly
broke down.
The report adds further: “The assets were valued by Richard Ellis for
$807 725 as per attached report. The valuation was done in July 2015.
The purchase was done in April 2015. Another valuation that was done
by Lycerine Risk Services (Pvt Ltd) in October 2015 put the assets at
$1. 16 million.”
One source indicated the matter has been on the agenda of the HCCL
board since 2015, with Makore struggling to convince board members why
it was necessary to acquire the said equipment.
The board has resolved “to keep the equipment hanging and far away”
from the company’s asset registers.
“Given that there was a problem in the manner in which the equipment
was acquired, and given that the board did not approve the
procurement, we have a situation where the company is stuck with the
equipment to an extent that the company cannot have the equipment as
part of its asset register until up to now,” said a source.
He added: “The board now wants to push for the reversal of the whole
deal because it smacks of corruption and kickbacks.”
HCCL auditors, Grant Thornton, in their audit report, gave the
coalminer a “qualified audit”- a statement sources said raises a lot
of dust on the state of affairs at the company.
Sources also disclosed there were millions of dollars that were being
milked from the HCCL by Makore and his close lieutenants as the
company no longer had proper checks and balances in place.
Makore refused to discuss the matter when contacted for comment.
“I present reports to the shareholder and the board on a regular basis
on a number of issues and matters affecting the company. On that one,
the board is seized with the matter and I am not at liberty to discuss
it right now,” he said.
Statistics show that the company’s production has been on
a tumultuous  trend beginning in January this year, with HCCL managing
to produce only 498 739 tons in the first half of the year.

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