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Zimbabwe: $4bn missing from ZESA pension fund

By Precious Shumba, Daily News


 May 27, 2003

Zmbabwe - Workers and trustees say Sydney Gata, the ZESA executive chairman, authorised without their consent the withdrawal of $4,1 billion to pay retrenchment packages to retiring workers.

Under normal circumstances, the exit packages are supposed to be paid from ZESA’s coffers and not from the pension fund, whose funds are only withdrawn when an employee has retired.

One of the trustees said last week that trustees understood that ZESA, after dismissing or suspending workers since last year, would pay these workers their salaries from the pension fund.

“What we have gathered is that several of these workers were then given their packages from the fund instead of ZESA coffers,” the trustee said.

“Most of these retired on medical grounds or after ZESA realised that it would lose the cases in a labour tribunal before reaching their retirement age of 60. ZESA should have paid the actuarial deficit in years to each person’s monthly contributions until the 60-year mark but the power utility has not done that.”

The workers charged that Gata, who is also the chairman of the pension fund, had capitalised on his dual chairmanship of the fund and the authority to authorise the withdrawal of money from the pension scheme.

But Gata on Friday denied being involved in the alleged racket, which has reportedly prejudiced the pension fund. He said when he joined ZESA in 1999, he inherited an $8,4 billion loss accrued in 1998 and 1999, and he had now turned the company into a profit-making venture.

“We have managed for the first time to pay 50 percent dividends to the government,” Gata said. “In 2001, ZESA made a profit of $6,5 billion. I personally fought for the provision of $4,2 billion to bail out the pension fund which had by then a long history of actuarial deficits. In that year we got a zero percent tariff increase.”

Asked about the concerns of workers and trustees that he has abused the fund, Gata scoffed at the allegations saying the government had actually assigned him to clean up the pension fund.

He said there were serious problems at the pension fund before his appointment but these had been cleared. “I have a letter from the Ministry of Mines and Energy commending me for doing a good job at the fund,” he said.

“I appointed a task force of employer and employee trustees to administer that fund. There is no decision that l make without the approval of the board of trustees.

“Furthermore, the fund has financial advisers and no investment is carried out without the recommendation of the sub-committee of the workers’ trustees.”

Gata said he did not regularly chair the fund because he had solved the problems at the fund and his deputy, identified only as Chikwenhere, now chaired its meetings on most occasions.

He asked why he would abuse the fund when it was common knowledge that ZESA workers had actually voted him in absentia while he was in Europe to become the founding president of the association of ZESA pensioners.

Wilson Lungu, the acting general manager of the pension fund, could not disclose how much was in its coffers now and how ZESA came to rescue the fund from collapse.

Lungu said although the pension fund had its trustees – four elected by the workers, one pensioner and five representing ZESA – the authority still remained the majority shareholder of that fund in which it contributed 21 percent of each employees’ monthly contribution.

The striking workers last Thursday presented a petition to Amos Midzi, the Minister of Energy and Power Development, Emmerson Mnangagwa, the Speaker of Parliament, and Gibson Sibanda, the leader of the Movement for Democratic Change in the House outlining what they said were the reasons for the collapse of ZESA.

“The authority is now being managed by personal assistants and ad hoc committees that are formed and dissolved,” the workers claimed.

“ This is leaving a lot of business unfinished and it is impractical to audit and evaluate his (Gata’s) different management teams. We ask you to set up a commission of inquiry that includes worker representatives.” They urged Midzi to co-operate with ZESA workers in Grades A1 to D2 who they said had shocking information on alleged corruption at the State-run company.

Midzi yesterday confirmed receiving the workers’ petition but said he had not read it.

The workers said ZESA management’s priorities compromised service delivery and prejudiced the power utility of billions of dollars.

“We are devastated to bring to your attention that almost all the former directors and other former employees who were given their packages running into billions of dollars have now been re-engaged by the executive chairman as consultants, further siphoning our depleted funds,” the workers said.

Gata said ZESA had several consultants who had benefited the company because it now made profit running into billions of dollars annually.

The workers said Fortune Sambo, who was ZESA’s industrial relations officer, Tendai Chikandura, the former ZESA properties manager, and Philip Mhike, a former deputy police commissioner who is now ZESA’s risk control consultant, had been re-engaged as consultants at ZESA head office despite being retrenched about two years ago.

Daniel Mavhivha, described by the workers as Gata’s ally, is also a consultant.

Bridget Zhakata, Gata’s “senior” secretary, is said to be employed on a consultancy basis which the workers claim is draining the power utility of critically needed funds.

Sarah Dube, who was formerly the personnel officer for the company, was made the secretary for the management Advisory Committee, a position which was previously not there.

Gata said he had two personal assistants, both of whom had their individual executive secretaries, but denied that any of these employees were his relatives. In fact, he said, the workers had been recruited by a private employment agency.

The petition says: “Dozens of ZESA employees are on suspension with full pay and ZESA is paying double salaries for their replacements. With the expertise we have in Grades A1 and D2, please be advised that we don’t need consultants.

“Our labour force is so competent that we can actually out-source our skills as consultants to other small organisations and get the much-needed revenue. We only need a visionary to lead our organisation.”

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