Wednesday, October 6, 2010

Corruption in the Business Sector

This week I have read about the impending collapse of three of Zimbabwe’s better known companies. All on the same day. Lobels Bakeries – Lobels Bread being a household name in this country for as long as I can remember – has gone to the wall. The company was handed over to ‘The Workers’ about 18 months or so ago and the word at the beginning of the week was that the equipment was old and uncompetitive with the production methods of today. Later in the week we learn that an audit report discovered some $7.5 million has been misappropriated by top management, siphoned out of the company by way of fictitious ‘suppliers’ of flour.

Another household name for as long as I can remember is ’Kingston’s Stationers’. Now Kingston’s Holdings. The company was bought shortly after independence by ZANU PF but when the ZANU PF ‘business’ wheels were falling off it was transformed into a ‘parastatal’. Monday we are told that 1.7 million has been siphoned off by top management. Once again, fraudulent ‘suppliers’ have been paid for goods that were never supplied. The board is busy taking the accused to court.

Next on the list is ZUPCO – ‘Zimbabwe United Passenger Company’. The company provided the only bus fleet in the old Rhodesia and has been wading through crocodiles for the past twenty years as old rolling stock gradually fell into disrepair, was replaced briefly by new omnibuses funded by government that soon went the same way. Their last attempt at rejuvenation was to purchase a fleet of busses from China with the name of FAW – which the locals soon dubbed ‘For a Week (Only)’ as that was the life of the average machine. Now ZUPCO has been advised to lay off 400 staff but in the labour environment in Zimbabwe today this means in effect, bankruptcy. Air Zimbabwe knows all about this having attempted to lay off 500 staff earlier this year only to find the arbitration courts refused to permit and AZ had to take them all back. AZ has experienced a pilot’s strike for the past three weeks, the pilots claiming that they have not been paid their allowances since February 2009. That appears to be resolved for the time being with the pilots returning to work having been made various promises. And the rumour mill has it that AZ is in the market for 2 new Airbus A600 machines with pilots currently under training. If true, there must be some kind of nefarious deal taking place here.

To round off the week’s business review we are told that Sable Chemicals owes ZESA – the electricity supply authority – over 22 million dollars. ZESA saw fit to cut them off only to be told by government to re-instate their supply. We are told ‘on good authority’ that government owes Sable over 14 million – presumably for the supply of fertiliser handed out to ‘new farmers’.

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