Debt ridden state controlled enterprise Zimbabwe Consolidated Diamond Company (ZCDC) has been haunted by scandals and under-performance ever since its formation leading to perennial loses of more than $50 million in the period between April 2015 and May 2016 alone, Zim Morning Post can reveal.
This was revealed in an independent audit report conducted by AMG Global seen by this publication.
The report noted that the company has been operating at a loss since it began operations in 2015 and there is no possibility of recovery.
“Without further qualifying our opinion, we draw your attention to note 27 to the financial statements which indicates that the company incurred a total comprehensive loss of $7 445 606 during period which ended 31 December 2016 and as of that date was in a net current liabilities position of $7 981 756 and negative equity of $7 445 576.”
The report recommended the closure of the company as it is not in a position to continue operating.
“The above referred matters cast doubt on the company’s ability to continue operating as a going concern for the foreseeable future”
The company’s financial statements were allegedly doctored and about $11 million stated in the statement as ‘long term investments’ ‘disappeared’ and management could not justify its claim.
“We were not able to verify the valuation and completeness of the mine rehabilitation provision with carrying amount of $11 068 975 in non-current provisions on the company’s statement of financial positions,” read part of the report
According to the report, management could not provide a report by an expert detailing the assumptions and computations made in arriving at such an investment.
It further states that ZCDC completely lost money amounting to $20 307 027 owed to it by companies that have closed down.
In a development that raised a stink and management’s propensity to conceal corrupt activities, AMG Global states that the management was not willing to cooperate with auditors to convince them how the company will recover this large amount of money.
The company also owes workers in unpaid salaries and it recently lost a legal battle to a company called Pure Diam DMCC and the Sherrif of the High Court was ordered to attach ZCDC assets including diamonds at Mineral Marketing Company of Zimbabwe (MMCZ).
This publication had sight of a letter dated May 27 2019 and addressed to the sherrif with instruction of attachment of ZCDC assets.
However, a representative from PURE DIAM DMCC Coleen Kwaramba said they are engaged in mutual benefit negotiations with ZCDC.
“Well, we are on the same wave length with ZCDC and we know nothing of any attachment of their assets.
“They owed us $14 million and they are left with $3,5 million which we are agreeable of confidential payment plans,” said Kwaramba.
ZCDC acting chief executive Roberto Depretto was not in a position to comment citing marathon board meetings and he reffered this publication to corporate services manager Sugar Chagonda who was away in South Africa and on leave.
In a bid to sanitise the rot at the ailing institution and restore confidence, the board chairperson Killian Ukama fired top executives last month .
These were chief executive Morris Mpofu, finance director Charles Gambe, supply chain executive Newton Demba, chief human resources executive Masciline Chikoore, chief security officer Clemence Munoriyarwa, engineering executive Andrew Murwisi and audit executive Cleopatra Mutisi.
Mpofu has a matter which is sub judice wherein he stand s accused of approving diamond sales to a blacklisted dealer.
He was appointed to lead the state enterprise in 2017, after government terminated the licences of diamond mining companies in the resource rich Chiadzwa area. Chief Operating Officer Roberto De Pretto is the acting chief executive officer.
The ZCDC report shows only small a fraction of the losses that are being incurred by government owned companies in Zimbabwe.