Former deputy chief secretary to the president and cabinet Ray Ndhlukula is in the eye of a storm after it emerged this week that he unprocedurally ordered the Zimbabwe National Roads Administration (Zinara) to illegally grant a South African company a US$5 million contract to supply road construction equipment.
Ndhlukula chaired the Office of the President and Cabinet (OPC) taskforce which sourced funds for government's emergency road rehabilitation programme last year.
The taskforce was given the responsibility to raise US$300 million which was set to be disbursed to road authorities through Zinara, in terms of the Roads Act.
Two local financial institutions, CABS/Old Mutual and ZB Bank, agreed to extend loans amounting to US$150 million each.
Of that, CABS/Old Mutual released US$30 million as of mid-last year, while ZB Bank released US$20 million.
The ZB disbursement is at the centre of the reported corruption storm, with the case now under formal police investigation.
According to confidential documents obtained by the Zimbabwe Independent this week, Ndhlukula created a parallel structure to allow his taskforce to directly disburse part of the loan amounting to US$5, 250 000 to the South African company, Neo Africa, for the supply of held gadgets used in road rehabilitation.
In addition, government sources said Ndhlukula faced stiff resistance from Zinara and the Transport Ministry, which insisted that the money should be channeled to Zinara for onward distribution to respective road authorities as per requirements of the law. Zimbabwe Independent can reveal that detectives from the Criminal Investigations Department (CID) Fraud Squad have over the past two weeks visited several officials as investigations intensify.
Former transport minister Joram Gumbo was among those questioned. Gumbo is now the minister of State for Presidential Affairs in charge of Implementation and Monitoring after being moved from the ministry last month.
The matter was relayed to police for investigation after former Zinara chief executive Nancy Masiyiwa submitted a stinging dossier to the anti-corruption unit in President Emmerson Mnangagwa's office, which is headed by former prosecutor Thabani Mpofu. In her dossier, Masiyiwa raised questions about the manner in which Neo Africa was to benefit from a portion of the loan, saying the company stood to dubiously earn the US$5,2 million as kickback for facilitating the loan deal.
Masiyiwa states in the dossier that two weeks before her suspension from Zinara by the then Wilfred Ramwi-led board in June last year, she had written to the ministry resisting Ndhlukula's recommendation on the basis that "there was no justification of involvement for a third party in a contractual agreement between two parties, which is Zinara -- the borrower -- and ZB Bank, the lender".
However, documents further indicate that even after Masiyiwa's sacking, Ndhlukula continued pestering Zinara for the finalisation of the Neo Africa deal.
For instance, in letter dated January 3, 2018, addressed to then acting Zinara chief executive officer Mathlene Mujokoro -- who has since resigned from the scandal-ridden parastatal -- Ndhlukula claimed the parallel arrangement was meant to prevent double-dipping. He also demanded, in the letter, to be furnished with the roads rehabilitation masterplan.
Sources said following the availing of the masterplan, Ndhlukula's taskforce then came up with a proposed agreement in which it was claimed Neo Africa was entitled to a 3,5% of the total ZB Bank loan, which translates to US$5,2 million.
Mujokoro, sources said, took the matter up to the parent ministry.
However, the Transport Ministry, through its former permanent secretary George Mlilo, refused to authorise Zinara to sign the document, saying it could only do so after the finalisation of the legal wrangle arising from the Neo Africa arrangement.
Mlilo wrote back to Mujokoro on July 4, 2018, advising her that Gumbo had not given Zinara the greenlight to sign the draft agreement.
"Reference is made to your letter dated 3 July 2018. Please be advised that the minister has, as previously advised, not given his authority for you to sign the said agreement until all administration/legal matters are concluded," the letter reads.
On the same day, Mlilo also wrote to Mujokoro demanding to be furnished with information relating to the disbursement of the funds from ZB, amid concerns of excessive delays.
"Reference is made to the availability of funding for the roads hotspots programme. The first phase was approved for all roads authorities, namely my department of roads, rural district councils, urban councils and the district development fund to implement the work. However, to the best of my knowledge, the funding has not been availed for road authorities to carry out the work. Kindly furnish my office and the office of the honourable minister on the status of the availability of the said funding from ZB Financial Holdings as matter of urgency," Mlilo said.
Contacted for comment this week, Mlilo confirmed that his office resisted the payment of US$5,2 million to Neo Africa because procurement procedures were flouted. "The task to raise funds was given to ZB bank through normal government procedures. We resisted Neo Africa because the process of how the company came in and was selected was not clear," he said.
Gumbo, on his part, wrote on August 15, 2018, to chief secretary to the President and Cabinet Misheck Sibanda expressing concern over the matter.
"I refer to the previous communication from my office as well as the permanent secretary's office on this matter and wish to request your office to bring clarity on who is responsible for disbursing the above funds. My understanding is that in terms of section seven of the Roads Act (Chapter 13:18), the board if Zinara is responsible for disbursing funds raised by Zinara to the four road authorities stipulated in the Act. Therefore, this function cannot be legally taken away from the Zinara board irrespective of the methods through which the funds have been raised. Your urgent response to this matter will be greatly appreciated," Gumbo wrote.
The Independent could, however, not obtain Sibanda's response to Gumbo, but a senior government source said he, acting on Gumbo's letter, ordered for the cancellation of the Neo Africa deal.
"It appeared as if the chief secretary had been kept in the dark about those proceedings because soon after that correspondence from the minister, he ordered that the deal be cancelled. The OPC sourced the money but it was not its duty to prescribe the way it ought to have been disbursed, especially by establishing a parallel unit which is outside the legal parameters," a government source said.
Gumbo further queried the Neo Africa deal in a comprehensive report to President Emmerson Mnangagwa.
"The emergency roads rehabilitation programme which commenced in 2017 is ongoing and the ministry, with the support of the Ministry of Finance and Economic Planning and the Office of the President and Cabinet have engaged local financial institutions to raise funding for roads infrastructure using the Zinara balance sheet in the sum of US$300 million. CABS/Old Mutual are set to raise US$150 million with the first US$30 million being available and the balance to be paid between end of June 2018 and December 2018. ZB is set to raise US$150 million, with US$20 million being available, " Gumbo said in the report to Mnangagwa.
"Be that as it may, the US$20 million raised by ZB is now caught up in administrative complexities emanating from the Office of the President and Cabinet. The funds were raised through ZB and on the Zinara balance sheet and are to be utilised in terms of the Roads Act through which Zinara obtains its mandate. The body with the mandate to disburse the funds according to the Act is the Zinara board.
"The OPC has now set up a parallel structure to disburse the funds after engaging a company called Neo Africa, which is said to be entitled to US$5 250 000, which is 3,5% of the US$150 million. Of the total, amount of US$5 250 000, about US$1,5 million is said to be for hand held gadgets to be supplied to Zinara by Neo Africa. A project management unit to be chaired by secretary for policy formulation, analysis and coordination has been given the mandate to disburse and monitor the projects which, at law, is the function of the board and management at Zinara.
My ministry, your excellency, is strongly against such blatant disregard of the law and corporate governance principles by senior officials."
In a telephone interview this week, Gumbo confirmed that detectives had paid him a visit. "Yes, they came to my office about two weeks ago and I gave them my side of the story and submitted to them relevant documents," he said.
When contacted for comment, Ndhlukula claimed he knew nothing about Neo Africa.
"I have no idea what you are talking about and also about Neo Africa. Why don't you talk to the secretary," Ndhlukula said.