TINASHE MAKICHI
Government has axed board members across all subsidiaries of its investment arm, the Industrial Development Corporation of Zimbabwe (IDCZ) amid revelations of gross governance deficit and lack of clarity on corporate governance issues, Business Times has established.
Th e diversifi ed conglomerate’s subsidiaries include Zimbabwe’s largest fertiliser manufacturing company Chemplex Corporation which operates five divisions including Dorowa Minerals, Zimbabwe Phosphate Industries (ZimPhos) and G.D Haulage.
Other units for the government owned IDCZ are Sunway City, Willowvale Motor Industries and Deven Engineering.
Associate companies include Olivine Industries, Sino Zimbabwe Cement Company, Zimbabwe Grain Bag, Madzone Enterprises and Afroran Spinners.
Well-placed multiple sources told this publication this week that the fi ring of board members across the IDCZ units was the first step to clean up IDCZ’s governance structures believed to have been compromised in the last few years.
Business Times can report that Industry and Commerce Permanent Secretary, Mavis Sibanda, has communicated to IDCZ subsidiaries registering her displeasure of how their boards were being constituted without the knowledge of the shareholder.
Consequently, Sibanda is said to have directed the board of directors of all the subsidiaries to step down and a proper process would be followed when appointing directors.
“Government has raised concerns on how the board of directors for IDCZ’s subsidiaries were being appointed and constituted.
As is allowed by the law, the board of directors did not go through mandatory vetting and there were issues around misgovernance and violation of corporate governance laws,” a well placed source familiar with the developments told Business Times.
“Therefore the permanent secretary had to make a directive that led to the dismissal of all the boards of IDCZ’s subsidiaries as the government is looking at appointing new boards following proper procedure.”
The development comes at a time when IDCZ last week appointed a new chairman, Winston Makamure following the resignation of Charles Msipa, who led the board for a year until last month.
His board, which was appointed in May last year included Marjorie Mutemererwa, Makamure, Edward Tome, Joyce Malaba, Spiwe Nyamatore and Elizabeth Rabvukwa.
The ministry issued a statement last week saying: “The Ministry stands in full support of its parastatals boards in the execution of their mandate, holding them accountable to the principles of good Corporate Governance as espoused in the Public Entities and Corporate Governance Act [Chapter 10:31], as we work towards realising our strategic goals and ultimately His Excellency’s Vision 2030.”
IDCZ was established to conduct any industrial undertaking, to facilitate, promote, guide and assist the financing of new industrial undertakings, schemes for the expansion, better organisation and modernisation of and more efficient carrying out of operations in existing industries and industrial undertakings.
The state-owned investment arm and a development finance institution has vast investments covering vehicle assembling, cement and chemical manufacturing, real estate, fertiliser production, edible oils manufacturing, mining, industrial engineering among many others.
IDCZ was incorporated through its enabling Industrial Development Corporation Act (Chapter 14:10) in 1963 to invest in industry as a state agency.
The Act was amended in 1984 to allow the Corporation to promote investment and economic cooperation across borders.
