Message Ven 10 Avr 2015 08:43

ZCCM-IH boss annoys PAC over payments to law firm

ACTING mines permanent secretary Paul Chanda and ZCCM-IH chief executive officer Dr Pius Kasolo on Tuesday annoyed the Public Accounts Committee for paying John Kaite Legal Practitioners K8 million for legal services instead of using the company’s legal department. And the government has spent K16 million to pay salaries to Collum Coal Mine workers when the Sinazeze-based mine was placed under care and maintenance. The PAC, which was chaired by Cheembe MMD member of parliament Mwansa Mbulakulima, heard that the ZCCM-IH board in 2011 abolished its legal department and contracted JKLP, a firm run by its former employee, to provide legal services to the tune of K8 million per annum as opposed to the K907,000 the company used to spend for the same exercise annually through its legal department. Chanda made the revelations when he appeared before the committee to respond to various audit queries, thereby enraging the PAC, who strongly warned against abuse of public funds. He submitted that in 2011, ZCCM-IH restructured its organisation and excluded the handling of legal obligation by its legal department. In that regard, in October 2012, ZCCM-IH entered into a contract with JKLP, which was owned by a former employee from the abolished legal department to handle legal matters as at August 21, 2012. The law firm was to also handle all outstanding conveyance matters, collect and recover debts as well as to attend to refunds and surrender of houses. “During the period from October 2012 to August 2014, ZCCM-IH Plc had paid amounts totalling K8,869,817 in litigation and conveyance costs to JKLP,” Chanda said. “The K8,869,816 incurred within a period of one year and eleven months was far much more compared to the cost of running an in-house legal service...which was costing the company an average of K907, 156.92 per annum in salaries for all 26 members of staff. In this regard, ZCCM-IH could not maximise shareholders wealth in line with the 2012-16 strategic plan.” He told the committee that to remedy the wanton spending on the law firm, ZCCM-IH would now use its internal legal department to handle legal matters once its contract with JKLP expires at the end of September 2016. But the PAC said it was corporate irresponsibility for ZCCM-IH to allow misuse of public funds in that manner. Mafinga MMD member of parliament Catherine Namugala demanded that action be taken against the person who decided to award Kaite the contract. “The ownership of JKLP calls into question a lot of issues. A former employee paid over K8 million, obviously there is something wrong and what’s wrong is that those that were tasked to draw this contract had something to benefit,” Namugala said. “So who was involved in contracting JKLP because you have admitted a waste of resources? It’s money given to Kaite without earning it, so who was involved and what action have you taken against them?” Chanda, in response, admitted the anomaly but Dr Kasolo said the move was aimed at empowering local lawyers, thereby attracting more rage from committee members. Lubasenshi Independent member of parliament Patrick Mucheleka questioned whether ZCCM-IH had the interest of the nation because the company was purely being used as a conduit for corruption and self-interest. “People are milking resources of Zambia and how do we allow a few greedy individuals to do so? How can ZCCM-IH run this project like this? If possible Mr chairman, immediate action should be taken to save taxpayers money,” advised Mucheleka. “Clearly, there is failure of good corporate governance at ZCCM-IH.” Chama North PF member of parliament January Zimba said the ZCCM-IH board that resolved to award JKLP the contract was not genuine and had a wrong motive. “It was not a genuine contract, because what criterion was used to choose a worker at such a huge cost? Please, K8 million compared to K900, 000 is too much; what did you smell on this contract?” asked Zimba. Mumbwa MMD member of parliament Dr Brian Chituwo said the whole issue was an inside job which raised moral issues, especially that there was loss of public funds, which Chanda admitted. “Mr chairman, it was a poorly handled issue and the company lost huge sums of money. It indeed begs a lot of questions and answers,” Chanda said. Meanwhile, Chanda told the Public Accounts Committee that ZCCM-IH was paying salaries for workers that were doing nothing at the Collum Coal Mine. “At the time the government revoked the mine’s operating licence, ZCCM-IH continued to pay salaries to workers who were just sitting,” he said. “ZCCM-IH accrued a bill of K16 million which it gave to government and the government had to make a decision to give the mine back to the former owners, the Chinese.” Chanda was responding to Mucheleka, who was appalled by policy inconsistencies in the PF administration. He said finance minister Alexander Chikwanda and mines minister Christopher Yaluma made the decision to hand back the mine to the Chinese. “The bill which was incurred by ZCCM-IH was too huge for the company to manage, hence its decision to give it to the government, which also decided to give the mine back to the Chinese,” said Chanda. Earlier, Mucheleka said it was incorrect for the government to grab Collum Coal Mine and give it back to the Chinese after losing colossal sums of money in paying salaries. In February 2013, then mines minister Yamfwa Mukanga announced that the government had cancelled Collum Coal Mining’s licences and immediately took over operations of the troubled and dangerous underground mine. Mukanga said the mine, which is a hotbed for acrimonious relationships between native labourers and their Chinese bosses, would be run by ZCCM-IH in the interim as the government sought an equity partner to take over the mine. - See more at: http://www.postzambia.com/news.php?id=7 ... sNIq9.dpuf