Petrotrade corruption saga takes new twist

Chris Mahove- Acting Editor

The Petrotrade corruption saga has taken a new twist amid revelations privatisation of the company started in 2018 and was approved by the State Enterprises Restructuring Agency (SERA), formerly Privatisation Agency of Zimbabwe (PAZ), which is responsible for the privatisation of all government entities.

There had been allegations by suspended Petrotrade Board Chairperson, Munotidaishe Chinyoka, that Energy and Power Development Minister, Zhemu Soda was planning, in cahoots with some army and private business big shots, to sell the company to a Kuwaiti company, IPG, for far less its value without going through proper procedures.

“Once an entity has been identified for privatisation, SERA working with the targeted entity are required to engage a transaction advisor, in most cases will be consortia of Audit firms, Financial institutions and law firms. In the case of Petrotrade, initially CBZ was awarded the transaction advisory contract.

“When government decided to include Genesis, a National Oil Insurance Company (NOIC) subsidiary, CBZ was asked to quote for the additional workload. The government was not happy with CBZ’s revised quote and tendered the whole thing. ZB Advisory Consortia then won the tender,” a source close to the developments told Review &Mail.

The source claimed Chinyoka was engaging in a desperate smear campaign to earn himself sympathy on his downfall.

He said the issue raised by Chinyoka had nothing to do with corruption at Petrotrade as he claimed, but his failure to follow company processes and procedures which led to his suspension by the Minister.

Chinyoka and his board have been accused by the Ministry of Energy and Power Development of making irregular senior managerial appointments which were fraught with nepotism.

He however, defended the move, saying the appointment of the Chief Operating Officer and the Business Development Director had helped Petrotrade increase its market share from 2.68 percent in October 2021 to 6.46 percent in January 2022.

Last week Chinyoka filed an urgent High Court Chamber application in which he accused Energy and Power Development Minister, Zhemu Soda and Acting CEO, Godfrey Ncube of corruption and fraud at the government owned energy firm.

He accused the Ministry of trying to micro-manage the company.

Chinyoka alleged the two, working in cahoots with other senior company bosses and Ministry officials, had siphoned the company of inflating costs of the construction of service stations and stealing up to $300 000 litres per year during the time when the Ministry was presiding over the running of the company.

The suspended board chairperson further accused the two of trying to sell the company to Kuwaiti petroleum giant, IPG for a song in return for bribes to Ministry officials.

But sources at the company claimed allegations of corruption by Chinyoka were fabricated in a bid to protect his job at the company.

“The long and short of it is that the Advocate is clutching at straws and is just engaging on a smear campaign so that he has sympathisers on his downfall,” said a source.

He said the construction of the Mabvuku service station had been done above board, with all PRAZ approvals having been obtained for the variation of scope of works and contract sum, adding claims of corruption raised by Chinyoka amounted to mischief on his part.

“For instance, the amount outstanding on construction of Mabvuku Service Station is USD221, 957, 00 convertible on payment to ZWL at prevailing auction rate. The initial contract sum was USD 911, 552, 68 but because the stand was sitting on a wetland special foundation and footing became necessary, leading to a major variation of scope of works which raised contract sum to USD2, 5 million,” he said.

It was, however, the appointment of Chief Operations Officer, Business Development Director, Legal and Corporate Affairs Director and Chief Finance Officer by the Chinyoka led Board which were out of line.

“It is a known fact that on the Petrotrade structure there are no positions for Chief Operating Officer, Business Development Director, Legal and Corporate Affairs Director and Chief Finance Officer. The company advertised for positions of CEO, Business Development Manager and Finance Manager,” noted the source.

He said the board had gone on to appoint one candidate who had not even applied for the job to the post of Chief Operating Officer pending the retirement of the Acting CEO last August, with a promise to elevate him to the post of CEO.

Another source said the Petrotrade board had held interviews for the post of Business Development Manager but did not make any appointment, only to appoint a lady who had been interviewed for the CEO post to the position of Business Development Director.

“The interviews for Finance Manager were held with the successful candidate being appointed Chief Finance Officer. The existing Legal and Corporate Affairs Manager was elevated to Legal and Corporate Affairs Director.

He said the elevation of the Financial Manager to Chief Finance Officer and that of Legal Manager to Director had serious implications on their conditions of service.

“For instance, the Legal Manager who was in D3 (Middle-management as per Patterson grading system) suddenly found herself occupying a senior executive position of Director (E3) without having to go through the interview process. Finance Manager Position was in E1 and as CFO is now in grade E3,” he said.

The source claimed the Human Resources Administration Manager was sent on forced on fabricated allegations of nepotism after querying the upgrading of positions without following procedure.

“It was alleged the HRAM was recruiting his relatives into Pump Attendant posts yet all Pump Attendants at Petrotrade are service stations are not direct employees of Petrotrade as the company has an agreement with Head Hunters for outsourced labour with respect to service station employees,” the source said.

He said in as much as the HRAM could have influenced the recruitment of his relatives by Head Hunters, that could not possibly qualify for nepotism as technically they would not be Petrotrade employees.

It has also emerged that a Procurement Manager who resisted attempts to buy fuel from traders who were not on the PRAZ supplier list was also victimised and sent on forced leave on allegations of allowing the construction of the Mabvuku Service Station without a contract being signed between the contractor and Petrotrade.

This was despite audit results which showed a contract had been signed but could not be located in terms of Petrotrade standard operating procedures.

It is alleged after the sending of the Procurement Manager on forced leave, the company started buying fuel from traders who were not on the PRAZ list, among them ADDAX.

But Chinyoka insists the corruption allegations he raised are valid and there is evidence to that effect.

“The corruption allegations are not only probable with documentation, but show that the ACEO and those he is working with belong in prison. The court application I filed has documentation proving the allegations but fortunately my lawyers also have all the documentation and proof,” he said.

He denied allegations of purging, saying the Procurement Manager was suspended after it became apparent that their irregular procurement processes had been discovered.

Chinyoka further claimed an investigation by the Audit Manager confirmed that there was no contract signed between Petrotrade and the contractor who was awarded the Mabvuku Service Station tender, adding that the Procurement Manager should face disciplinary proceedings.

He said Ministry officials were making the mistake of referring to Petrotrade as a government parastatal when in fact, it was a private company owned by government.

“They refer in their allegations, to Petrotrade as a “parastatal. It isn’t. A Board of Directors must serve the entity in terms of what it legally is, not what those benefitting from it want it to be. Petrotrade is a Private Limited liability company that happens to be owned by government. That means it operates in terms of the Companies Act and the Public Entities Corporate Governance Act. What it does not do is operate in terms of Public Service regulations,” he said.

Chinyoka alleged the HR Manager and the ACEO were accused of conducting a fake procurement process for the provision of labour services in which they awarded a contract to a pre-determined winner despite a specific Board resolution to stop procurement until a forensic audit had been done.

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