Maravi

‘I had no authority to sell ZCCM assets’

‘I had no authority to sell ZCCM assets’
By Post Reporter
Monday March 24, 2008 [11:00]

Continued cross-examination by Mudenda on March 20, 2008

Mudenda: Do you remember where you said Mr. Norman Mbazima
made a recommendation?
Kaunda: Yes, it was just a mere recommendation and that in the sale
of ZCCM main assets, there were such recommendations. He made
recommendations to the internal privatisation team who did not react.

Mudenda: What do you mean they did not react? Is it your evidence that
no decision was made on that recommendation?

Kaunda: That is what I am saying. That recommendation
recommending Nsansa School because, if the decision was made, I
would have known. My office would have been communicated to about
the preferred bidder.

Mudenda: Look at P53, what is the date of that letter?

Kaunda: 1st April 1998.

Mudenda: What did you do when you received that letter?

Kaunda: When I received it, I passed it on to the internal ZCCM
privatisation team because it is the team which was mandated by the
board of ZCCM to sell ZCCM assets. Your Honour, even as chairman of
the main privatisation team, I had no authority to sell any ZCCM assets.
The letters I was mandated to send to successful and unsuccessful
bidders were with ZCCM.

Mudenda: Was there any decision made on those Mbazima
recommendations?

Kaunda: No decision was made on Mbazima recommendation.

Mudenda: Was Nsansa Primary School communicated to preferred
bidders?

Kaunda: It was not communicated at all.

Mudenda: Mr. Mbazima said it was entirely up to ZCCM to decide. How
do you react to that?

Kaunda: The reason is that it was ZCCM which was selling. Unlike the
other parastatals, ZCCM board remained intact throughout the
privatisation process. For the other parastatal companies, the boards
were dissolved. So it was ZCCM selling and not the negotiating team.

Mudenda: What is the date on the Mbazima recommendation?

Kaunda: 1st April 1998.

Mudenda: Was that before the blanket approval?

Kaunda: Yes, Your Honour.

Mudenda: If you were to sale Nsansa, what would happen?

Kaunda: That sale could only have taken place with the approval of ZPA.
ZCCM could not have sold without the approval of ZPA.

Mudenda: Can you recall the date of the blanket approval?

Kaunda: The date is 20th April 1998.

Mudenda: To your knowledge, did ZPA approve the sale of Nsansa
School?

Kaunda: To my knowledge my lord, they didn't.

Mudenda: There is no document that ZPA approved the sale?

Kaunda: I have never seen one.

Mudenda: Let's come to P16. What is the date of that letter?

Kaunda: 6th May 1998.

Mudenda: Addressed to who?

Kaunda: ZCCM chairman, negotiating team.

Mudenda: What did you do when you received that letter?

Kaunda: I passed it on to the team leader ZCCM internal privatisation
team.

Mudenda: What is the name?

Kaunda: It was Dr Edwin Koloko. Sadly he is late.

Mudenda: From there, what happened?

Kaunda: They considered this letter in their committee.

Mudenda: What was the result of their consideration in that letter?

Kaunda: They made a recommendation.

Mudenda: Did they make a decision on the recommendation?

Kaunda: They made a recommendation that their preferred bidder was
Ndola Trust School.

Mudenda: At that time, did they have also the Norman Mbazima
recommendation?

Kaunda: They must have considered them but they were not bound by
the recommendation.

Mudenda: What happened after the recommendation was made by Dr
Koloko?

Kaunda: That decision, let me say before the transformation plan of
September 1998, decisions from the internal team were passed on to
the then negotiation team. After the transformation plan, it created three
groups.

Mudenda: Following that decision by the Dr Koloko team, did you do
anything as chairman of ZCCM?

Kaunda: My office was the only office which had the mandate to
communicate to bidders the decision or the recommendation of the
internal committee and after that I had to communicate.

Mudenda: In this case, what did you communicate?

Kaunda: That their client had been chosen as preferred bidders for
Ndola Primary School.

Court: You communicated to who?

Kaunda: Cave Marik and Company.

Mudenda: Who else did you communicate to?

Kaunda: As was the process I also communicated to the committee of
ministers whose chairperson was the minister of mines.

Mudenda: What about other bidders?

Kaunda: We communicated to them shortly after the successful bidder.
If I can recall, we communicated on the preferred bidder on Friday and
the unsuccessful ones the following Tuesday.

Mudenda: Mr. Henry Musonda said his bone of contention was that this
was offered to another bidder?

Kaunda: It was not for me to decide, as I have informed the court.

Mudenda: That there was a deadline and this bidder did not submit the
bids within time, what do you say?

Kaunda: That was the responsibility of the internal team and not mine.

Mudenda: What is your reaction to the evidence that some assets were
advertised and others not?

Kaunda: It did not follow automatically that if a recommendation was
made about any bidder, it would be automatically accepted. There were
sometimes offers which were not automatically accepted. In fact, I didn't
know who the trustees were until I came in this court.

Mudenda: When did you come to know the trustees?

Kaunda: I knew them in this court.

Mudenda: You remember the company secretary for ZCCM Investment
Holdings. What did he say?

Kaunda: He said that the school was sold by the subcommittee of the
main committee. I think what he was referring to was group three which
was established after the ZCCM transformation plan.

Mudenda: Look at P26. That letter is written by who?

Kaunda: W. S. Musama, company secretary of ZCCM Investment
Holdings

Mudenda: Addressed to who?

Kaunda: Director General Anti-Corruption Commission.
Mudenda: Date?


Kaunda: 9th October 2003.
Mudenda: Can you read that?

Kaunda: Re sale of Ndola Trust School..., we wish to inform you the sale of the said trust school which has been classified as a non-core asset was handled by a sub-committee of ZCCM privatisation team...
Mudenda: Do you recall when the sale agreement was made?
Kaunda: Not the exact date but that was at the end of 1998.
Mudenda: According to ID 56, 4th December 1998. Who were the parties to that sale agreement?
Kaunda: It was ZCCM and Ndola Trust School Trust.
Mudenda: Who were the owners of this asset?
Kaunda: ZCCM.
Mudenda: Who sold the asset?
Kaunda: ZCCM sold through the sub-committee.
Mudenda: Did you sign the sale agreement?
Kaunda: I didn't.

Mudenda: Who signed?

Kaunda: According to what I heard in this court it was signed by Mr. Dominic Mwimba, then director of human resource for ZCCM and was witnessed by Professor Muyunda Mwanalushi who was manager of ZCCM schools.
Mudenda: What about the Trust?
Kaunda: That it was signed by Mr. Faustin Kabwe on behalf of the Trust.
Mudenda: You didn't sign the Trust?

Kaunda: I was not actually at the signing ceremony.
Mudenda: Why could any assets of ZCCM not be sold without the consent of ZCCM?

Kaunda: ZCCM board remained intact. The internal ZCCM privatisation team was the creation of ZCCM board. So unless that team authorised any sale of assets, it could not be sold. The negotiating team did not have that authority.

Mudenda: You remember in cross-examination, a question was asked to Mr. Musama if there was any complaint, what did he say?
Kaunda: That there was no complaint.
Mudenda: You remember Mr. Dominic Mwimba was asked whether he had been charged, what did he say?

Kaunda: He said there was no such charge.
Mudenda: Mr. Musama was asked whether ZCCM was defrauded, do you remember his answer?

Kaunda: Yes, he said it was not defrauded.
Mudenda: Mr. Mwimba was also asked whether ZCCM was defrauded, do you remember his response?
Kaunda: He said no.

Mudenda: Apart from the arresting officer, did you hear anyone who said ZCCM was defrauded?

Kaunda: No witness said that.

Mudenda: Some witnesses said Ndola Primary School was sold at a lower price than the actual price?

Kaunda: The sale was not about money but the continuation of quality education to our children. I remember the arresting officer said that but if I may say another school, Nkwazi School here in Lusaka was sold at a lesser bidder. What I want to explain on Nkwazi is that there were two bidders. There was Hindu Association and Muslim Community. ZCCM sold the school to the Hindu Association despite the fact that the Muslim Community had offered more money for the school. One of the reasons was that the Hindu Association had a track record of running a similar school in Ndola. It is called Simba School and that while Hinduism is a way of life of Indian people, Muslim is a religion.

Mudenda: We heard from Mwila Lumbwe and Norman Mbazima that the price was not the paramount consideration, what is your reaction to that?


Kaunda: That is what they said. I concur. I listened to what they said and as chairman of the negotiating team, I drew the attention to ZCCM criteria concerning social assets.

Mudenda: How did you deal with Mpelembe?

Kaunda: Mpelembe Secondary School was not sold. It was handed over to the Catholic secretariat by way of a deed for the same reason, continuity of quality secondary education. In fact, because the school was offered to Catholics at short notice, ZCCM offered to fund one term of the costs.

Mudenda: Mr. Musama said ZCCM had continued gifting assets?
Kaunda: I do remember that.

Mudenda: You recall Mwila Lumbwe itemising some of the assets that were gifted away?

Kaunda: I recall.
Mudenda: You recall the arresting officer saying you were not connected in anyway to the school?
Kaunda: I do remember.

Mudenda: She mentioned one thing according to her investigations which connected you to the school, you recall?
Kaunda: Is it my chairmanship?

Mudenda: She told the court that at one point there was a donation?
Kaunda: She told the court that at one point there was a donation by Access Financial Services where I was non-executive chairman. According to her, I should have known about this donation. Your Honour, a non-executive chairman does not attend to the day-to-day operations of the company. He merely chairs periodic meetings on matters of policy.

Mudenda: Ernest Makasa said there was a request to Mr. Kabwe for donation of computers?
Kaunda: Yes.

Mudenda: Were you aware of this?
Kaunda: I was not aware.

Mudenda: According her that is the only evidence connecting you, what is your reaction to that?

Kaunda: I have said I wasn't aware that there was such a donation. I am also saying it was wrong for Access Financial Services to give that donation.

Mudenda: You were a shareholder of that company?
Kaunda: Yes, I had 10 per cent shareholding.
Mudenda: You talked of numerous companies in which you were director?

Kaunda: Yes, after I was forced out of ZCCM I had many offers and Access offered me non-executive chairmanship and also offered me sub shares, 10 per cent of shares.

There was nothing special about my connection to Access. Mr. Faustin Kabwe was chief executive of the company, I was non-executive chairman but the management of Access didn't have to consult me for a donation which was within the powers of the executive officers of the company.

Mudenda: Did Mr. Kabwe at any time disclose to you that he was one of the trustees in Ndola Trust School?
To be continued

Labels: COURTS, PRIVATISATION, ZCCM-IH

posted by MrK @ 6:19 PM