TINASHE MAKICHI
The Special Presidential Prosecution Unit responsible for prosecution of corruption cases has launched a major clamp down on the country’s power utility, ZESA Holdings, by arresting its chief executive Joshua Chifamba over corruption allegations.
This follows the earlier arrest of Zimbabwe Electricity Transmission and Distribution (ZETDC) managing director Julian Masanga Chinembiri and finance director Thoko Dhliwayo over a $35 million corruption scandal involving an Indian firm, PME Power Solutions.
By the time of going to print last night, Chifamba was in the holding cells at Matapi Police Station in Mbare while Chinembiri and Dhliwayo were in police cells assisting with investigations. Their court papers were being finalised.
While charges against Chifamba were still not yet clear, a close family member told Business Times that Chifamba had been arrested and was in cells pending court appearance.
PME which commenced operations in 1988 is an Indian company that manufactures transformers primarily to power utilities across the world.
According to the charge sheet seen by this publication, the two senior executives at ZETDC are accused of abusing office as defined in Section 174 of the Criminal Law Codification and Reform Act Chapter 9:23 (two counts) and there are suspicious telegraphic transfers of funds made from Afreximbank to PME Power Solutions.
“The accused is facing allegations of abuse of office and there are telegraphic transfers showing transfer of funds from Afreximbank to PME Power Solutions of India.
There is a resolution from ZETDC showing breakdown of received equipment and import documents for the importation of some of the said equipment, statements from witnesses showing the offence was committed are available,” read part of the charge sheet.
Sources close to the developments confirmed to Business Times that the two ZETDC officials were picked up for corruption allegations involving an Indian engineering company and a decision was made to either arraign ZESA Holdings chief executive Josh Chifamba as a chief witness of the co-accused.
The Zimbabwe Republic Police confirmed the arrest citing that it was in connection with the awarding of a contract involving ZESA subsidiary, ZENT and PME for the supply of transformers and other equipment worth $35 million.
The equipment was meant for a project in Chiwaridzo (Bindura), Senga (Gweru) and Cowdray Park in Bulawayo.
The accused are also facing allegations of awarding an advertising tender to Fruitful communications without going to tender in 2016 and subsequent payment of $20 000 to the company.
In another case, Chifamba is also implicated in corporate governance scandal which involves him leading the board of directors at ZETDC since 2015.
The arrangement is said to be in breach of good corporate governance practices and has, over the last three years, denied the multi-million dollar firm the needed independent checks and balances that could have come with an independent and properly constituted board.
According to corporate governance experts, ZETDC presents an interesting case study of a massive corporate governance violation.
Going by the spate of recent allegations, corporate governance is in turmoil at the power distribution company.
The last ZETDC board led by Ambassador John Mvundura was controversially dissolved in 2015 and replaced by a management board led by Holdings company chief executive Engineer Chifamba and deputised by group chief finance Eliab Chikwenhere.
Concerns are being raised as to how an executive of the holding company be the chairman of the board of a subsidiary company.
A few years ago, ZESA Holdings unbundled into Zimbabwe Power Company (ZPC), ZETDC, Zimbabwe Enterprises and Powertel. The objective was to improve efficiency in power generation, transmission and distribution channels and consequently improve on service delivery.
However the current ZESA structure has precipitated a spate of corruption allegations and gross misconduct being levelled against the group.
Apart from irregularities in terms of operations, ZESA subsidiaries have been involved in tender scams and some gross irregularities involving billions.
Controversial power generation projects have been inflated by more than $500 million, raising suspicion that ZESA managers and senior government officials could have corruptly benefitted through price escalations.
On May 16, 2016, a subsidiary of ZESA, ZPC was also embroiled in a $5 million tender scandal involving Intratrek, which was not sanctioned by the board.
ZPC was also accused of underhand deals in the Dema $170 million diesel power project.
Irregularities were also cited in the awarding of the $190 million Mutare Power Peak Project to Helcraw Electrical.
Government is restructuring the power utility and has mandated thatthere should be one board covering ZESA and all its subsidiaries
