20 April 2017

Zimbabwe: Asa Loses $4,3 Million, Fires Executives

Asa Resources Plc, a product of a hostile take-over by Chinese investor, China International Mining Group Corporation from former Mwana Africa shareholders, is immersed in fresh controversy after its top managers are alleged to have designed an obscure web to illegally move $4,3 million out of Zimbabwe. Chief executive Yat Hoi Ning and financial director Yim Kwan, who have been identified as the chief culprits in the scam, have since been relieved of their duties as investigations continue.

The group, which owns Freda Rebecca gold mine and Bindura Nickel Corporation, says that the money is still not accounted for.

"The board is satisfied that it has established that the total amount of Asa Resource funds that are unaccounted for is $4,3 million. Of this amount $2,7 million relates to the year ended March 31 2016 and $1,6 million relates to the year ended March 31 2017.

"The sum of $1,6 million in 2017 has been traced to two group companies administered from Hong Kong but the board has yet to confirm whether any part of this sum remains within the two companies. The board has not relied on these amounts and any recoveries will improve the expected cash position," the company said in a statement.

ASA, however, said that the funds that are unaccounted for have had no material impact on their local operations.

"So far as its two principal mining operations are concerned, Freda Rebecca Gold Mine and Bindura Nickel Corporation, continuing cash flows from operations at each mine are expected to be adequate for the normal working capital requirements of these mines. Both FRGM and BNC have their own banking facilities that are being utilised in the normal way.

"At group level there are a number of outstanding creditors, mainly relating to legacy litigation and unpaid directors fees and salaries. These amounts are expected to be paid in due course from management fees payable by BNC and FRGM to the company," the group said.

The latest development is part of string of controversies that have been associated with the group. The company was recently involved in a wrangle with employees at its gold producing unit Freda Rebecca over management issues after the group rationalised and restructured staff salaries across the group.

There are also allegations of asset stripping, discontinuation of development projects and allegations of corruption that have been raised against the group.

It is alleged that when the group changed hands in 2015 development projects that were operational such as concentrator operations at Bindura Nickel Corporation, gold processing at Freda Rebecca Gold mine were either put on hold or discontinued altogether.

New projects that were at planning stage such as the smelter and mining operations at Trojan Mine also suffered the same fate.

Information gathered by The Herald Business shows that the Chinese executives were planning to stop concentrator operations at Bindura Nickel Corporation to create a platform for exporting raw nickel ore to China.

The smelter restart at BNC was also reported to be under threat as management was said to be less interested in resource development choosing to focus on mining the company's rich deposits to recoup their $20 million investment.

Furthermore, investigations revealed gross mismanagement at Freda Rebecca Gold mine which has resulted in the collapse of its main gold processing plant Mill I.

This has affected Mashonaland Central Contractors Board, a group of contractors supplying services to ASA, which has been experiencing delays in payments, among other issues.

"Locally Freda Rebecca Gold Mine and Bindura Nickel Corporation are under siege. They are now shipping raw ore to China after stopping the concentrator at BNC. The work on the smelter has been stopped," the MCCB said.

There are fears that the Government could also have been prejudiced of millions as the company stopped value addition in favour of exporting raw ore.

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