DEC allows itself to be used in fight for ZNFU shares in Rabobank


 

Based on allegations from a preliminary audit report on ZNFU, a horde of DEC officials swarmed ZNFU demanding documents and computer hard drives from the accounts department.

The DEC officers arrived around 15:00 hours on Tuesday, met ZNFU executive director Ndambo Ndambo and conducted a search that lasted about five hours. During the search, they requested specific documents and contracts but they didn’t seem to get what they needed. They then dismounted hard drives from computers used by accounts personnel.

The officers left Ndambo at his office and proceeded to his residence in Chongwe where they broke down the gate and gained entry into his residence and found his little children. When he arrived, they conducted a search until 04:00hrs the following morning.

Sources say DEC struggled to piece up charges against Ndambo, as most allegations contained in the audit report have been substantiated by ZNFU management in its response to audit queries.. According to sources, DEC now seems to be fishing for charges that can hold, and much of what they are looking for surrounds the contract and payments between ZNFU and Jambo Tracking Ltd, a company owned by Ndambo and his wife. Sources say that authorities believe Ndambo abused authority by contracting his company to track 30 ZNFU motorbikes and 10 vehicles that are used by field staff in the provinces.

But ZNFU management, in its response on this particular audit query, indicated that Ndambo declared interest before Jambo was contracted in 2013 and that the vehicles and bikes are tracked for operational purposes, to check the movements of field staff during their outreach visits to farmers. ZNFU said the monitoring is done to record actual field staff movements and to reduce on the huge fuel bill the union has been incurring. Jambo also tracks 200 other vehicles belonging to RTSA, ZAMTEL and ZAMBEEF, among others.

Sources also indicate that the source of the malice against Ndambo arises out of a hideous fight between the management of ZNFU and four whites, Zambians of foreign origin, over the ownership of about 4% shares in Zambia National Commercial Bank Plc.

When Rabobank was allowed to buy 51% shares in ZANACO, the Dutch firm offered close to 4% shares in the bank to farmers of Zambia through ZNFU. At the time, ZNFU did not have US$700,000 that was required to purchase the shares. ZNFU then approached Livestock Services Cooperative Society for a US$700,000 loan to purchase the shares.

In that respect, the four directors at Livestock Services proposed that they needed to establish a Special Purpose Vehicle (SPV) to protect the interests of Livestock Services. An SPV is a subsidiary company with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt.

This SPV that was created is called Lizara Investments Limited, and it would exist as long as ZNFU owed money to Livestock Services. It would then be dissolved when full payment were made by ZNFU to Livestock Services.

ZNFU managed to liquidate the debt in record time of five years and then demanded that the SPV be subsequently dissolved so that the shares in ZANACO could be transferred to the rightful owners, the farmers of Zambia.

But the four directors insisted that, according to provisions they made, that they would remain directors of Lizara Investments until the age of 75. They even provided for an arms-length clause stating that ZNFU and Livestock Services would have nothing to do with the shares until then, and that even if one of them died, their estate would take over, which defeated the entire SPV arrangement.

Now the shares are worth US$9.1 million and the four directors are fighting to grab full control of the shares rather than the rightful owners, but the ZNFU management is not yielding to their demands, hence the fights.

Ndambo has been instrumental in guiding ZNFU over Lizara shares. As things heat up, Guy Robisnon has resigned from both the ZNFU board and the Lizara board.

Share this post