Effron loses govt job over leaks
By Moses Kuwema
Wed 14 Aug. 2013, 14:00 CAT
PRESIDENT Michael Sata has fired foreign affairs minister Dr Effron Lungu and replaced him with Wilbur Simuusa for allegedly leaking information to the MMD.
But Dr Lungu yesterday denied ever leaking any information and warned that the people responsible for his downfall would pay back in less than six months.
Sources disclosed yesterday that Dr Lungu had allegedly been leaking Cabinet information to opposition political parties, especially the MMD.
"The old man was a mole in meetings, that's why he has been fired. He has been very loose in terms of information. He has been leaking information to the opposition political parties. Every small detail, he has to run to MMD. Sometimes he would be baited with information and soon you will find it is already in the hands of the opposition," the sources said.
According to the sources Dr Lungu had allegedly been working against the PF in Chipata central constituency which led to Lameck Mangani's loss. The sources said Dr Lungu's loyalty was questionable and the PF did not want to risk having such a man."He has been working with the opposition. He gave information to Nevers Mumba of the MMD and so he needed to go," said the source.
But when contacted over the allegations, Dr Lungu said he was an anointed man of God and that very soon the nation would hear of serious wounds on those who planned his downfall.
"I don't think I have ever leaked any information to the opposition from cabinet to MMD. I have been wrongly implicated by enemies that had planned my downfall. If they think they have succeeded now, they will pay back in not less six months from now. How can I do that when I am a very strong PF supporter? If you remember, Eastern Province then, out of the 19 constituencies, I was the only one who actually won on the PF. So what type of information can I leak and to who? If anything, I have always been out of the country. What time do I leak information? It is not true. If there are people who make mileage by implicating others for things which they have not done, then at a later stage, they will also pay back," he said.
Dr Lungu said the enemies, whom he could not name, had been fighting an innocent person.
"God will vindicate me. My enemies will pay for that because God is a fair one. I stand very strong in the party manifesto's rules and there is nowhere, even if you look at my movements in Parliament, there is no where that I associate with opposition. As far as I am concerned, I am not shaken. But if those people have cooked up those stories, fair enough but I stand by my words that I have never done that. To me I am only going through God's currency," he said.
Dr Lungu said if it was the wish of his enemies for him to be out of government so that they could create room for others, which he said he had no problem with, adding that God was in control of his situation. He said not all was lost for him as someone who comes from the field of academia and that he would remain a very loyal member of the PF as its Chama South member of parliament until 2016.
Earlier in the day before being asked on the information leakage allegations, Dr Lungu said he was not bitter with his dismissal but thanked President Sata for having appointed him to serve as foreign affairs minister.
"I want to thank him for the time I served as foreign affairs minister. Appointments are made by the President and he also takes people from place to place. As far as I am concerned, I am not bitter. I just want to thank the President for having accorded me the chance to serve under him, I think that's what is important," Dr Lungu said.
Asked if his dismissal had anything to do with President Sata's disappointment with him a few weeks ago for having copied confidential letters meant for him to other people, Lungu said: "I have no comment on that."
President Sata's special assistant for press and public relations George Chellah disclosed Dr Lungu's dismissal to journalists yesterday after a swearing in ceremony of Bernard Chiwala as permanent secretary in the Ministry of Works and Transport. Chellah said President Sata has not yet appointed someone to take over from Simuusa at the Ministry of Lands, Natural Resources and Environmental Protection but that the nation would be informed at a later stage.
"All I can say is that there is a new foreign affairs minister, Honourable Wilbur Simuusa is now the new foreign affairs minister. Honourable Dr Effron Lungu has been relieved of his duties," he said. Asked on why Dr Lungu had been dismissed, Chellah responded: "the President has not advanced any reasons, the same way people are appointed, they can be disappointed."
Meanwhile, President Sata has expressed confidence that the Link Zambia 8000 project would work with Chiwala as permanent secretary in the Ministry of Works and Supply.
"Mr Chiwala, I think now the Link Zambia 8000 project is going to work because instead of supervising the small sector, you will be supervising the entire sector. So you have to work," said President Sata. He said the government would continue to centre its efforts on growing the economy faster and creating jobs. He said the government would also focus on implementing more labour-absorbing projects such as the Lusaka 400 kilometres L400 which involves rehabilitation and construction or upgrading of selected Lusaka urban roads.
President Sata added: "The L400 project includes improvement of various roads in various residential, light industrial and industrial areas of Lusaka City such as Kabanana, Chalala, Kamwala South, Chilenje South,Avondale, Kabwata Site and Service, Chazanga, Kamanga, Chinika Area, Bauleni, Northmead, Matero, Chawama, Lilanda, Chilulu, Ng'ombe, Kaunda Square, Kalingalinga and Mtendere among others."
Transport minister Yamfwa Mukanga is this Friday scheduled to launch the L400 project. President Sata said the project would cost US$348.8 million and was expected to create at least 1,000 jobs during the construction period.
"To date over 316,089 jobs have been created directly and indirectly through the effective implementation of policy, programmes and project activities under the PF government between October, 2011 and July 2013," he said.
President Sata expressed his government's commitment will to foster job creation and maximise the creation of jobs in line with the PF manifesto.
And Chiwala said he was grateful to President Sata for having accorded him an opportunity to serve as permanent secretary in what he termed as a very important ministry that was mandated with infrastructure development. He said he, together with other senior management officials at the ministry, were hoping to shape and guide the policy and strategic direction of the country.
"We are looking at the entire sector of transport, works supply and communication, which is pivotal in transforming Zambia into a hub for the region. My commitment is to work with the team that is already there and really reshape our policy direction as a nation through what I will contribute," Chiwala said.
Asked about the successful developments that he could point at during the time he served as Road Development Agency chief executive officer, Chiwala said the Link Zambia 8,000 project was well known now in the country.
"We have procured in excess of 1,000 kilometres, Kazungula bridge project is coming, the Chingola-Kitwe dual carriageway is under construction. The design for the Lusaka-Kapiri Mposhi dual carriageway is underway. Those are some of the things we were able to contribute for the short time I was there," Chiwala said.
Labels: EFFRON LUNGU, MICHAEL SATA, MMD, WILBUR SIMUUSA
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(STICKY) (LUSAKATIMES) Management failure at ZCCM-IH has lead to a loss of $1 billion income
Time Posted: August 7, 2013 11:54 am
Long-term minority shareholders of Zambia Consolidated Copper Mines-Investment Holding (ZCCM-IH), the investment holding company of the Zambian Government have urgently appealed for intervention in the corporate governance and management of ZCCM-IH as Zambia continues to loss colossal sums of money through mismanagement.
This is according to an Open letter addressed to Vice President Guy Scott and made available to the media. How GRZ and the Zambian people continue being cheated and short changed by Foreign mining companies
The Long-term minority shareholders raised concerns over the ineffective management of the company that has led to ZCCM-IH and through it the GRZ and the Zambian people being cheated and short-changed by the foreign mining companies in which it is invested.A few examples are:
1. According to the international auditors Grant Thornton, Mopani Copper Mines fraudulently avoided $175 million in corporation tax to the ZRA in the 5 years from 2003 to 2008, by various fraudulent procedures including transfer pricing to the Swiss parent company Glencore and misrepresentation of production figures and production costs. In this same period ZCCM-IH also lost $50 million per year in profits from Mopani
source:
appendix 1
appendix 1.1
Questions
* Why has ZCCM-IH together with the Government and the Zambian Revenue Authority failed to take any action whatsoever to recover these fraudulent losses?
* Why has no pressure been put on Mopani to come clean or otherwise lose its mining licence?
Recovering these fraudulent gains from Glencore along with due penalties would make a big difference to the well-being of the Zambian people as well as dissuading other companies from doing the same.The shareholders reminded Vice President Guy Scott of what he once said.
“We don’t want to destroy the cow that produces the milk but we want to make sure that you get your share of the milk”Post
* Why does Government let Glencore take our share of the milk?
* Why has the new audit of mines initiated by the former Mines Minister Wilbur Simuusa not been finalised and made publicsource: Reuters
* Why has the current Minister of Mines Yamfwa Mukanga failed to take action on this scandalous situation, whereas in 2011, he stated
“no government official must protect Mopani Copper Mines for violating the law and Mopani should be punished”Post
2. In 2007, the Zambian Task Force on Corruption investigated a fraudulent loss of $ 100million at the expense of ZCCM-IH. These investigations helped to identify those responsible, as well as the banks that received the stolen funds but as surprising as it sounds, no action was taken!All the investigations that were started during the presidency of the Late President Levy Mwanawasa have been stopped. Why were they not taken up since the election of the new President 18 months ago?
Source:APA
APA – Port Louis (Mauritius) Zambia and Mauritius, within the framework of the MutualAssistance Programme are working to retrieve 100 million dollars alleged swindled from theZambia Consolidated Copper Mines (ZCCM), APA learnt here.The Zambian government holds 85 percent of shares in the ZCCM.A high level delegation of the Zambian Task Force on Corruption, Tuesday arrived inMauritius to pursue the matter. Rama Valayden, the Attorney General and Minister of Justice to reporters Wednesdayin the capital, Port Louis, that he will hold a working session in the evening with theZambian delegation to discuss the follow up of the case which implicates offshorecompanies incorporated in Mauritius.He said about 100 million dollars have been transferred through the Bank of ButterfieldAccount in London, before being invested in the banking system in Mauritius and saidthe suspects in the scam are known by Zambian and Mauritian authorities.At the beginning of the year, at the request of the Zambian government, the MauritiusSupreme Court issued an ’Attachment and Freezing Order’ to several banks here onthe accounts of the suspects, Mr Bernard Mungulude, Mr Kazhi Kateke and the Laxidiamond company.The duty of the Zambian Task Force on Corruption now was to seek to identify the localagents and representatives of the suspects so as to be able to recover and repatriate themoney.Hence, local banks have been assigned to submit documentary evidence to expose thecriminal gang, or else the banks will face dire consequences, Valayden said. SR/daj/tjm/APA 02-05-2007
3.ZCCM-IH hold a 20% stake in Kansanshi Mining, the most profitable Mining Company in Zambia. The ZCCM-IH stake in Kansanshi currently represents $550,4 million in undistributed profits attributable to the Zambian holding. FQM 2012 Annual Report (see page 56). Non-controlling interests are the Minority shareholders’s benefits after investment. ZCCM-IH is the only Minority shareholder in FQM accounts.The amount of non-controlling interest (for ZCCM-IH) is $550.4 million, a sum that increases by more than $100 million per year. However the majority owner First Quantum Minerals (FQM) insists on conserving this money as a legal reserve and only distributes derisory dividends to ZCCM-IH in spite of having made more than $2,5 billion in net profits in recent years and having totally recovered its investment in the mine.
Question:
1. Why does the ZCCM-IH management and the GRZ fail to put pressure on FQM to distribute fair dividends to ZCCM-IH and so get its proper yield from the most important investment held by ZCCM-IH on behalf of the GRZ?As this scandal continues, FQM is using Zambia’s money to build the world’s largest mining corporation by buying othermining companies outside Zambia.
2.When will the GRZ take action to get its fair share from its vast mineral wealth and put a stop to foreign companies plundering its resources? What will the Zambian people have to live on once these resources are depleted?
Opacity in governance of company as well as infringement on shareholders rights
The long term minority shareholders also raised concerns over the persistent bad governance of ZCCM-IH with respect to minority shareholders as demonstrated by the way the selection of the eighth board member has been handled.
Early last year ZCCM-IH launched a call for nominations to elect a representative of minority shareholders to the Board of ZCCM-IH. The GRZ holds 7 seats on the board and the nomination of an eighth member to represent minority shareholders was seen as a significant effort improve the corporate governance of the company by letting minority shareholders have their say in company matters in proportion to their holding (12.3% of ZCCM-IH shares traded on Paris Euronext, the London and the Lusaka Stock Exchanges)
Use of an obsolete Register of shareholders
The minority shareholders made a very strong and co-ordinated response to this call despite starting from the considerable disadvantage of not being recognised as registered owners of ZCCM-IH shares.The Company Secretary, Mr Chabala uses an obsolete Register of Shareholders which does not list the owners of any ZCCM-IH shares bought through the Paris Euronext Stock Exchange (the most active of ZCCM-IH’s markets). Strangely, shares of the old ZCCM bought decades past in the UK and whose owners died many years ago are listed as registered shareholders.
To compound this failing, Mr Chabala is said to refuse to recognise official bank or broker’s certificates attesting to the ownership of ZCCM-IH shares.
The minority shareholders have repeatedly asked the Company Secretary to correct this failure and have explained the procedure to be followed to update the register, without success. As a consequence of this attitude, most minority shareholders are denied their legal right to attend company meetings or to vote directly on company matters.In order to respond to this “Call for nominations” minority shareholders had no choice but to adopt avery laborious and indirect voting procedure (via their stockbrokers, banks and Euroclear, theInternational Share Depository that records all share ownership and transfers) to ensure that their voteswere registered.
Secrecy
Unfortunately, but not surprisingly, the company refused to make public the result of this vote (even though the minority shareholders gave a clear mandate to their chosen representative by a very large majority of the votes submitted). Since then the Executive Chairman Mr Wila Mung’Omba, in what the shareholders describe as a totally unacceptable act of bad governance, has postponed indefinitely the nomination of the eighth board member to represent the minority shareholders.
It is not known the reasons why the Executive Chairman wants to keep minority shareholders excluded from exercising their democratic rights in matters of governance of the company of which they, alongside the GRZ, are the owners and who have the same reasons to make sure that this company is properly run for all the stakeholders.
The minority shareholders fear that the Executive Chairman may be planning a biased and unethical conversion of government debt into ZCCM-IH shares
ZCCM-IH Cautionary Announcement leading to severe dilution of the minority shareholding thus making the nomination of the eighth board member no longer an issue and giving him the freedom to run the company single-handedly.
The opacity of the companies intentions and the past years of poor (or corrupt) governance give credence to even the worst scenarios. Having exhausted all other avenues of intervention (letters to successive Chairmen, the Zambian Securities and Exchange Commission (SEC), the Lusaka Stock Exchange etc.), the long term minority shareholders humbly asked for the Vice President to help to ensure that the legal rights of the Minority Shareholders of ZCCM-IH are upheld and that the company finally applies the rules of good corporate governance. The credibility of foreign investment in Zambian securities is surely weakened by the failure to ensure high standards of governance of this most emblematic government-controlled Zambian company and can only bring dishonour to the Zambian Government.
Conclusion
Without all these management failures, ZCCM-IH would have been able to register income of more than $1 billion and so refund the long-standing debt of $425 million to the GRZ as well as paying dividends to shareholders (including the GRZ) and investing in the Zambian economy. Had ZCCM-IH benefited from good governance, good management and strong support from its majority shareholder the GRZ, to make sure that it got its fair share from its mining investments, it would now be a flourishing company providing wealth, employment and pride for the Zambian People.
Time for us to develop ourselves
President Sata once said “Zambia was tired of moving with a “begging bowl” from one developed country to another as the country had the capacity to become self-reliant and lift its millions of unemployed youths out of poverty if its vast natural resources were exploited to the benefit of Zambians”. He added “Time has come for us to develop ourselves and let others come to beg from us because we have more resources than the people we are begging from”. The minority shareholders expressed extreme disappointment that the Executive Chairman Willa Mung’omba has not put all his efforts into ensuring that ZCCM-IH lives up to the expectations of President Sata.They said this lack of action, hesitations, incomprehensible decisions and lack of transparency only serve to create suspicion about the intentions of the company and the government-appointed officials that runit.
The long term minority shareholders acknowledged however, that since the nomination of the CEO Mukela Muyunda in June 2010, the management has made unprecedented efforts to catch up on no less than 5 years arrears in the publication of the company’s accounts. They encourage him to finally get the the accounts up to date in2013 and to make sure, as promised, that the company’s assets are listed in the balance sheet at fairvalue. Until now these have been incomprehensibly listed in the company balance sheet at minimal cost valuations (approx. year 2000), which massively undervalues the company and disastrously distorts its balance sheet.
Promises can not hide a woeful performance
Changes have also been promised since more than 40 shareholders sent emails in November 2012 to the executive Chairman W. Mung’Omba expressing their dissatisfaction about the management of the company. The shareholders now fear that these may be hollow promises to calm the reactions of the shareholders.Only time will tell.
In any case these hypothetical promises cannot to hide the woeful performance of ZCCM-IH. At a time when the GRZ is considering quoting other para-public companies and inviting Zambian citizens to invest their hard-earned money in such companies, should it not first take a close look at its most emblematic para-public company and ensure that ZCCM-IH sets an examplet hat others can follow? There is still so much to be done here.
The minority shareholders stated that have exactly the same interests as the majority shareholder, the GRZ: that ZCCM-IH becomes one of the leading companies in Africa. It has the means to achieve this, but so far,as a result of weak direction, it has lacked the will to make significant progress. They therefore humbly asked the Vice President to consider taking an active part to ensure that the corporate governance and management of ZCCM-IH are of the highes torder and above suspicion so that the Zambian people can once again be proud of this flagshipcompany and reap the benefits that should be theirs.
Labels: CORRUPTION, GUY SCOTT, MINING, SITUMBEKO MUSOKOTWANE, WILBUR SIMUUSA, WILLA MUNG'OMBA, YAMFWA MUKANGA, ZCCM-IH
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