Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Noczim fails to account for US$35m

Noczim fails to account for US$35m

Thursday, 10 February 2011 17:32

Tendai Zhanje

THE Ministry of Energy and Power Development instituted a forensic audit
into the National Oil Company of Zimbabwe (Noczim) after it failed to
account for US$35 million fuel duty from independent importers.

Energy and Power Development minister Elton Mangoma made the revelation in
the Senate on Tuesday when he responded to a question during his steering of
the Energy Regulation Bill through its second reading.

“We instituted forensic audit of Noczim’s financial affairs after the
management failed to satisfactorily prove where US$35 million fuel duty from
independent importers had gone,” Mangoma said, “An internal audit failed to
produce any answers hence the forensic audit whose report is now on my

Garnishing of the Noczim account by the Zimbabwe Revenue Authority (Zimra)
and failure of a subcontractor to deliver US$5 million worth of fuel caused
the intermittent fuel supplies experienced in the country from late December
2010 and early January this year.

“Zimra action caused the oil authority to face cash constrains to purchase
strategic fuel reserves,” the minister said. “This was further compounded by
failure of Noah, a South African oil company, to deliver US$5 million worth
of fuel that it had been contracted to import to Zimbabwe in December 2010.”

The ministry’s permanent secretary, Justin Mupamhanga, said they were
pushing Noczim to quickly recover the money advanced to Noah or receive fuel
imported through the South African agent.

“What we are doing is to try and get our money back if they do not give us
the fuel because we really did misread the data,” Mupamhanga said, “We were
in a desperate state and I want to admit we bleeped, but what needs to be
done is ask them to deliver or give us back the money.”   

Noczim had not done any due diligence on Noah prompting the Mines and Energy
portfolio committee chairman, Edward Chindori Chininga, to conclude that the
company may have been a shelf firm.

“US$5 million going to probably a briefcase company is a lot of money,”
Chindori said. “I would have thought a company such as Noczim would know
that they should deal with BP, Caltex or any of these established

Meanwhile, Noczim is offering golden handshakes running into hundreds of
thousands of dollars to senior managers who are not willing to join any of
the two successor companies after the completion of the oil company’s
restructuring expected in the next few months.

Two companies will be born out of the Noczim restructuring exercise,
PetrolTrade and National Oil Infrastructure Company (NOIC). PetroTrade will
be in charge of running fuel service stations while NOIC will operate the
Beira-Feruka-Msasa pipeline and other fuel storage infrastructure owned by

A source at the oil company said managers were approached last week on
whether they want to join the new companies or leave on generous terms.

“Negotiations for exit packages began last week,” the source said, “senior
managers have an option to join any of the two successor companies on same
conditions or better to the one offered at Noczim or take a generous exit

The source added that: “Those opting for retrenchment will get their
official vehicles, personal computers and lump sums in the region of US$200
000 each. The retrenchment package is tempting.”

The Independent is also reliably informed that shop-floor workers to middle
management level will receive a package that runs into tens of thousands of

“The workers committee has worked a package that will see the highest paid
in that group receiving up to US$100 000 as their golden handshake,” the
source revealed.

Sources said Ken Chakanetsa would be the chief executive at NOIC.

“Chakanetsa will be joining NOIC from InPetro, a Mozambican petroleum outfit
in which Noczim has shareholding. He is a chartered accountant by
profession,” said the source.

Mines and Energy permanent secretary James Mupamhanga confirmed the
development in an interview with this paper on Monday this week.

“In any event when a company restructures, a new manager will be hired and
others will be retrenched,” Mupamhanga said, “The process started last week
and we hope that it will be completed before the end of March, 2011.”
The permanent secretary was, however, not at liberty to reveal the
retrenchment packages to be given to those leaving Noczim.

“It’s not fair to disclose their packages before the negotiations are
completed,” he said, “The senior managers are handling the negotiations and
we hope that soon a position would be reached.”

Noczim will become the first state-owned enterprise to be unbundled after
cabinet last year agreed on a policy that spells out how the state will turn
around companies that have become a drain on the national fiscus.

The company had made perennial losses in the recent past, particularly since
2000 when the company failed to supply sufficient fuel to the nation due to
a combination of reasons – among them lack of foreign currency, corruption,
maladministration and the general deterioration of the economy in the last


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