Mining Reporter – Thursday 4 July 2019
HARARE (Mining Index) – Auditor General (AG) Mildred Chiri has exposed shocking rot at government’s once lustrous Elvington mine with corporate misdemeanor and asset misappropriation being the order of the day.
So astounding was the state of affairs at Elvington mine that Chiri issued an adverse opinion for the parastatal, casting doubt on the entity’s ability to operate as a going concern.
According to the AG’s report on Parastatals which was recently tabled before parliament, the company’s current liabilities exceed its total assets by USD12, 428,260. Chiri said she could not physically verify multiple assets implicating they had been misappropriated. However, management argued that most assets were attached by creditors, who were at various stages of litigation in 2016 and 2017,
Furthermore, assets were acquired without supporting documentation, raising the risk of fraudulent procurement as inflated amounts could be paid to suppliers. Assets were also disposed without any authorisation or related supporting documentation. On enquiry, Chiri said it was explained disposals were made based on verbal instructions.
However, most shocking was that employees at Elvington were distributing revenue from the mine amongst themselves without any oversight or government supervision.
“I noted that the mine was selling gold to Fidelity. The revenue from Fidelity was deposited into the Company’s account and the employees were distributing the income amongst themselves. This income was not being recorded in the company’s revenue accounts, raising the risk of financial losses due to irregular activities,” she said.
Elvington Gold Mine which is wholly owned by Zimbabwe Mining Development Corporation (ZMDC) used to be the corporation’s gold flagship producing in excess of 45kgs per month. The mine is currently involved in the processing of dumps as it prepares for underground mining.
The mine had been targeted for resuscitation with government inviting bids for Elvington along with six other mines last year. ZMDC received a total of 151 bids; however all of them were revoked as the mines failed to attract quality investors.
In a press statement today, the Zimbabwe Anti Corruption Commision (ZACC) said it had noted the report by the Auditor General and opened active investigations in respect of all ministries, government departments, state enterprises and parastatals implicated in the report with a view to bringing to book, all those implicated in any and all corruption, theft, misappropriation, abuse of power and other improper conduct. ENDS//