HARARE – Mines ministry permanent secretary Francis Gudyanga was yesterday grilled by parliamentarians over corruption and mismanagement at the Zimbabwe Consolidated Diamond Company (ZCDC) and the controversial sale of Murowa Diamonds.
Gudyanga, who chairs boards of three parastatals under his purview and has been fingered in a string of scandals involving the ministry of Mines, was roasted by both Zanu PF and MDC MPs.
The parliamentary portfolio committee on Mines and Energy, chaired by Masvingo urban Member of Parliament Daniel Shumba, told the permanent secretary in no uncertain terms that the newly- formed ZCDC was operating illegally.
“… when it concerns matters of the public, in particular deployment of resources to take over an entire diamond sector of the country it is not just the Companies Act that determines operability, it will just provide guidelines. State enterprises in this country are guided by Acts of Parliament.
“The question the committee is asking is, is there parliamentary authority through an Act empowering you to set that company? A simple yes or no question,” Shumba said.
“There is no Act on which ZCDC was formed,” Gudyanga said adding that the company was established as a contingency measure.
ZCDC was formed after Zimbabwe diamond miners rejected a consolidation proposal by government in which government was set to have 50 percent in the new company, while other players were to proportionally share among themselves the other 50 percent stake based on their balance sheets.
However, the parliamentary committee also heard that the company’s board, made up of six members and chaired by Gudyanga, was not fully constituted.
“Despite the fact that the present board members were selected with the assumption that the other 50 percent was to come from private sector representation, the evidence that you have presented shows you hired and fired people with a board that is not properly constituted.
“The evidence that you have presented before this committee is that you are running ZCDC affairs anyhow, despite the fact this is a national company supposed to contribute meaningfully to economic development,” Shumba said.
The committee learnt that ZCDC had remitted about $1 million to Treasury, with a yearly fiscal contribution projection of $2 million.
During the last six years, diamond firms contributed $637,3 million in terms of payments to government — an amount which plummeted to a $23,4 million fiscal contribution in 2015 from the $125,2 million which made its way into the fiscus from the miners in 2010.
Acting ZCDC chief executive Ridge Nyashanu, who was not spared by the Shumba-led committee said ZCDC had so far realised a $21 million revenue and $6,7 million profit.
In March, ZCDC mined 160 000 carats of diamonds, 206 000 carats were mined in April and an additional 140 000 carats were realised in May.
Bikita West MP Munyaradzi Kereke also told the House that the company’s board had no way of determining a quorum since it was not fully constituted, while Bikita South MP Jeppy Jaboon also lashed at Gudyanga saying all the decisions the board had effected since the inception of the controversial ZCDC had been void.
“So in a nutshell, in terms of economic benefit for ordinary Zimbabweans we can say that we are now worse off with ZCDC,” Kereke said, after Shumba accused Gudyanga of single-handedly being responsible for the country’s economic decline in light of his multiple board caps.
“The reason why you are not constituted is because you can do what you want while the economy is collapsing,” Shumba said, adding the board had fired 11 employees over a period of two months.
Gudyanga revealed to the committee that the dismissed employees had failed polygraph tests, leading to their dismissal, after Jaboon told the committee that all the ZCDC board members came from one province, Manicaland, including Gudyanga.
“They are free to take the issue up with the courts, however, they were still on probation and they failed the polygraph test so they were let go,” the secretary said.
Member of Parliament representing Zvishavane-Ngezi John Holder also put Gudyanga to task over the disposal of Murowa.
“Murowa was sold for $19 million to a foreign firm yet you stand in front of us today failing to explain to us what is going on in the diamond mining sector,” Holder said.
As previously reported by the Daily News, Rio Tinto’s disposal of its shareholding in Murowa Diamonds to a foreign firm has raised dust after it emerged that the sale had allegedly taken place in violation of several local stipulations.
Parliamentarians also questioned ZCDC’s decision to conduct full-scale mining in the Gache Gache area in Kariba District where gold and platinum deposits were recently discovered.
“We also understand that ZCDC will be at the forefront of mining activities in Gache Gache, is there any diamond in the area? If not why then is the company involved in the process?” Shumba queried.
However, Gudyanga said the company also had mandate to conduct other mining activities.
“Gold, potentially platinum and palladium were discovered and the ZCDC has a mandate to mine gold. Funding for operations came from the Reserve Bank of Zimbabwe and ZCDC,” the permanent secretary said.