The future of Zama Resources’s suspended CEO Mcebisi Mlonzi remains uncertain, though an internal inquiry has apparently cleared him of wrongdoing.
Mlonzi provided a convoluted explanation for how R55 000 was paid from Zama’s corporate account to the benefit of Andile Nkuhlu of the Department of Public Enterprises. Nkuhlu was in charge of evaluating the bids to buy 75% of the state-owned Komatiland forestry resources, which Zama won.
Mlonzi told investigators from PricewaterhouseCoopers, appointed by Zama’s board, the money was part of a personal loan repayment to Themba Langa, a Johannesburg attorney.
He claims he borrowed R100 000 from Langa, apparently to make a down payment on a luxury sports car.
Mlonzi made two repayments, one of R15 000 and one of R40 000, from money held in a Zama account. Langa, a member of Nkuhlu’s wedding organising committee, allegedly instructed Mlonzi’s secretary to divert that money into Nkuhlu’s account as a contribution to the bachelor party.
PricewaterhouseCoopers is understood to have found that Mlonzi’s personal money was mixed with Zama’s and thus it could not determine if the company’s money was involved.
An official investigation by the Public Service Commission has reportedly found that ”no concrete evidence could be found that Nkuhlu unduly influenced the awarding of the bid to Zama”.
But neither Mlonzi nor Nkuhlu, or even the Zama bid, can be considered to be in the clear. Though the commission’s report found no evidence that Langa had an interest in Zama, a report presented to the Independent Communications Authority earlier this year listed Langa as a director of Lembede Investments, a shareholder in Zama.
Some of Mlonzi’s other actions as CEO are expected to come under the spotlight at a Zama board meeting on Friday. A source at the company said shareholders were unhappy about decisions Mlonzi allegedly pushed through to grant different voting rights to class A and class B shareholders. Though their issued share capital is roughly equal, class A shareholders, most of whom appear to be linked to Mlonzi, carry 1 000 times the voting weight of class B shareholders.
”How were these allocated?” asked one shareholder. ”There is a feeling that this was done totally undemocratically. People were allocated shares and special status without even the approval of the board. This was being done by one person who thinks he owns the company. In fact via the A share scheme Mlonzi does effectively own and control Zama.”
Several directors, including the acting chief executive Mlungisi Kwini, are believed to be considering resigning if Zama is not cleaned up.
Gordon Sibiya, a director, said he was pleased a board meeting would be held to discuss ”all issues of Zama in their totality”. He said matters of corporate governance needed urgent attention.
Meanwhile, Sivi Gounden, director general of the Department of Public Enterprises, must decide what to do about Nkuhlu and about the bid process.
The Public Service Commission’s report, leaked to the Sowetan this week, reportedly recommends that the department consider disciplining Nkuhlu for misconduct for receiving the money from Zama and for ”performing remunerative work outside his employment without his superior’s permission”. It is not clear what employment the report refers to.
More serious for Zama’s bid is the reported finding that Nkuhlu violated the confidentiality agreement set out in the bid process by being in regular contact with Mlonzi.
It unclear how the commission could find that the bid process was untainted, despite reported concern by other bid evaluators about ”Nkuhlu’s conduct during the bid process”.
The final word on Zama’s bid will have to await an investigation by the auditor general, who is probing the integrity of the bid process.