ZNBC K6b scam; pay and it shall be stolen

Salasini

Salasini

By Lloyd Himaambo

When workers of ZNBC saw the multi-billion kwacha complex, housing multi-storey offices and residence being built and owned by their Director General Joseph Salasini, they suspected that their money and that of the citizen had been stolen!

To ZNBC workers, the complex built on Haille Selasie Road opposite the Swedish Embassy in Lusaka, represented the impunity of thieving civil servants accumulating expensive and luxurious assets without fear of the law, without regard to the suffering lot, without due consideration to the institutions that gave them the opportunity to work there.

The extent of abuse of resources is carried out while the hard-working lot,monetary and personal sacrifices they put in, to labour to a nation’s duty unprecedented greed accumulate and publicly flaunt ill-gotten wealth. while a few, driven by   the suffer in

Salasini, a man of humble standing until he became Director General of ZNBC, now has joined an elite club of wealthy men in the country.

Some say he used his ‘own money’. That he borrowed K2 billion from Finance Bank. The answer is simple. It’s called money laundering! As in such cases, personal monies are mixed with illegally obtained ones to disguise the crime!

The fateful Audit Report shows extensive abuse of resources since 2002 and now portends unknown consequence for Salasini and his Colleagues.

BRIEF BACKGROUND

Cn  2nd April 2009, unionised workers took a rare step – they went on strike. Zambia Union for Broadcasters and other Information Disseminators (ZUBID) had in February 2009, demanded a salary increment of K500, 000.00 ‘across the board’.

When Salasini’s management refused to yield to workers’ demands citing the ‘global financial crisis’, Union Head Simon Mwila called for a vote on the strike.

Besides the salary increment, the workers added a peculiar but stronga Forensic Audit of ZNBC’s resources. This was with foundation. demand –

Further they demanded the removal of the Board and Management of ZNBC.

THE AUDIT

The Office of the Auditor General was called in by Minister of Information and Broadcasting Services, Gen. Ronnie Shikapwasha. Shiakapwasha suspended Salasini pending investigations. Later the Ministry of Information deployed its official Juliana Mwila to head ZNBC in the interim.

The audit was conducted between 6th and 31st May 2009.

The Audit confirmed the suspicions of workers and illustrates the abuse of resources by Salasini and the glaring disparities that exist in the access to resources between Unionised employees and Management.

On Tuesday 16th June 2009, Shikapwasha informed the nation that he had since received a report from the Auditor General.

The announcement however contained an irregular process Shikapwasha was undertaking! He stated that he would take the Audit back to ZNBC management for ‘comments’ and to respond to the findings. This action alarmed many including the Auditor General’s office.

It should be stated that the Auditors were called in to verify cases of abuse, misapplication, misappropriation and theft of ZNBC’s resources. How could Shikapwasha subject the Audit Report to further comments?

This was not an Inspection Report requiring management response! This is not a process meant to produce an Annual Financial Report!

If President Rupiah Banda had done the same to the Audit at Ministry of Health referring it back to management who were accused of complicity in theft of K27billion, would the cases against Henry Kapoko and others have proceeded in the manner they have? Was Shikapwasha perpetrating a cover up?

Did Shikapwasha’s Permanent Secretary, Emmanuel Nyirenda, who sits on the Board where serious issues have been raised against it, scheming to overturn the findings?

With hindsight, what was the purpose of deploying a Ministry official, Juliana Mwila to head ZNBC in the interim? Why didn’t Shikapwasha allow a ZNBC staff to act in place of Salasini until matters were resolved?

What was the content of the Audit Report which Shikapwasha was fiddling to hide?

THE FINDINGS

The report was adverse on the Board, on Salasini and his Management.

The report revealed that ZNBC had incurred losses of K1, 821,145,000.00 in 2006 and the losses had escalated to K5, 072,962,000.00 in 2007 and an undisclosed huge amount in 2008!

The report also stated that the 74 management staff receive 43% of the total income of the payroll while the rest of the 343 unionised workers share the 57% crumbs!

THE BOARD

The Board is chaired by Augustine Seyuba. Seyuba is PR and communications expert with an illustrious career spanning 30 years in the corporate world.

The others on the Board are Emmanuel Nyirenda (PS Min of Info), Sr Rose Nyondo, Elias Mpondela, Joseph Chileshe, David Chimpinde and Bertha Lishomwa.

The report however appears not to be kind to Seyuba’s Board.

The report states that the ZNBC Board’s mandate expired in September 2005, contrary to the provisions of the ZNBC Act of 2002.

There is no evidence to show that Members of the Board had their tenure renewed and to date these Directors continue to hold office illegally and have received allowances without break since 2005.

Although this is not the fault of the Board, this development is attributed to a legal case where media associations took the Minister of information to Court to compel the minister to take names of Board Members selected through a transparent process under the new Act.

The case ended in May 2007 and no discernible attempts have been made to regularise this serious anomaly.

SITTING AND QUARTERLY ALLOWANCES

The report notes cases where the Board received irregular sitting and quarterly allowances. In one case the Board received arrears of up-to K104million when the Minister through a minute dated 12th November 2008, approved an upward adjustment. This followed a request by the Board to increase its sitting and quarterly allowances. The payment to the Board Members was backdated to 1st July 2008.

For unknown reason, the Director of Finance, who is a key player to the institution’s payments, was incorporated in the Board and was made eligiblesitting and quarterly allowances contrary to the ZNBC Act. to receive

Although the Board is empowered under the act to appoint persons to sit on any sub-committee so created, it is irregular that this inclusion on the board appeared permanent. The Director of Finance was ‘‘to assist with information on the financial status of the Corporation’’

Over a period of two years, the Board held over 44 meetings and were paid allowances totalling of K384, 300,000.00.

Boards are expected to meet quarterly to review performance and adopt management reports, translating to at-least four times a year. The ZNBC Board held 22 meetings a year! Unless there are compelling circumstancesBoard or its created sub-committees to meet in special circumstances, but 44 Board meetings appear seriously in excess! that would justify the

The report also states that ZNBC has not produced annual financial reportsthree years as required by the Act. for the last

THE DIRECTOR GENERAL AND MANAGEMENT

ZNBC has a debt burden of over K46 billion.

ZNBC derives its major income from advertising and other commercial incomes accounting for 75%, T.V licence collections accounts for 15% and the residue amounts comes from its 49% investment in Multi-Choice Zambia. The Board increased its shareholding in Multi-choice (Z) Limited from 19% to 49%.

The audit report also criticised ZNBC’s ‘barter system’. The corporation has 55 Clients owing ZNBC a total of over K5.2 billion. In exchange of air time, the institution is expected to receive goods and services. There exist no controls to monitor what is collected and who collects what from the 55 Clients.

The report also cited special ‘partnerships’ that Salasini has introduced.

For example, Zambia Amateur Athletics Association (ZAAA) ran by Board Member, Elias Mphondela, has partnered with ZNBC over the promotion of its project Inter Company Relay (ICR) since 2002.

In 2007, instead of paying K173, 489,674.08, ICR only paid K87, 799,329.70.

In 2009, the ICR would pay ZNBC a sum of K120, 000,000.00 instead of the total cost of air-time worth K383, 489,674.08!

The Corporation has been running adverts since May 2009 for the event taking place on 27th June 2009!

ZNBC has failed to give such amount of air-time to public interest programs government programs. or

Inter Company Relay (ICR) rents office spaces from Salasini’s property on Haille Selase Road!

AGENTS

ZNBC’s own Sales Agency Guidelines, states that agents are expected to be paid a commission of 15 – 18%. However the report notes that these guidelines have been disregarded with impunity.

An example is ‘’Your Health Matters’’ a Ministry of Health (SIDA), where an agent is paid for repeated and all future sales. The agent was expected to be paid a commission of 15 – 18% as a lump-some. However, the agent receivescommission on every new cheque! a

So far the agent has received K425, 805,826-00 as at March 2009.

Clearly this is a government program requiring no middle men and ZNBC has been deprived of almost half a billion kwacha of revenue of legitimate income on this transaction alone.

In 2006, the Corporation paid an agent D&C Saatch and Saatch (Mwanawasa’s Former Chief Analyst and for Press and Public Relation David Kombe owns the company), K382, 486,238.00 relating to the 2006 General Elections.

The commission was paid on the basis of sourcing business from Electoral Commission of Zambia (ECZ)!

In last year’s presidential election, ECZ engaged LOCATION CHALLENGE as its media agent. LOCATION CHALLENGE entered into a contract with ZNBCair on behalf of ECZ, adverts and programs worth K970, 384,121.03. to

However ZNBC paid LOCATION CHALLENGE a sum of K150, 576,846.37 for sourcing business! Further Location Challenge withheld K97, 000,000.00 of the contract value in unknown circumstances.

Other government programs brought through agencies are Ministry of Education, ‘’Educating Our Future’’ – Window Images Media in Development,Central Statics Office (CSO) ‘’Economic Census’’- Digicom Media Consultants.

ZNBC is an obvious medium of government communications and programs and as a national broadcaster, such business from Ministry of Health, ECZ and other government institutions require no agents.

Further the reports notes that there was no evidence to show that ZNBC has made any effort to deal with these institutions directly.

CREDIT FACILITIES

The report also noted that ZNBC runs credit facilities without instituting a Debtors Management Policy. To this effect, the corporation is owed over K12billion in this arrangement and K4.7billion was deemed bad debt.

The report also cited fraud in the manner amounts of K438million relating to 35 clients, have been irregularly written off.

The report also cites an amount of K787, 867,390.88 relating to 46 clients which has been misappropriated or stolen! This amount was collected in January 2005, through a Journal Voucher (JV) 6666. The narration in the electronic journal shows that 46 clients with credit balances were debited. An inspection revealed that no such JV numbers exist!

DEBTS, ALLOWANCES and EMOLUMENTS.

The Corporation owe local creditors an amount of K1, 549,712,637.06 and foreign creditors K8, 018,886,000.00.

Further the corporation owe ZRA K32, 058,193,908.00 (K32 billion) in statutory contributions, NAPSA is owed K1, 847,514,000.00 as at 31st. March 2009

According to Conditions of Service, all Unionised employees who are not accommodated by the Corporation are entitled to Housing Allowance at 100% net of their basic salary.

Unionised employees have been receiving between K400, 000.00 and K800, 000.00. However management pays itself Housing allowance in excess of 154% of their basic salary.

The report also show serious disparities between Management and UnionisedUtility, Commuted, and other allowances. employees in allowances paid such as

The report also cites the case of the irregular salary progression of Salasini’s salary. In a period of three years, Salasini’s salary has enjoyed a progression of 72% compared to his predecessor’s. Duncan Mbazima’s salary progressed 17.8% in a period of three years and Eddie Mupeso 48.1% during the same period.

The report also notes that management revised the value of salary notches239% and 294% effective October 2007. for contract staff (mostly top management) between

The report also cites a strange case where the Secretary (Grade 6) to the Director Marketing (Grade 8) has an annual basic salary of K37, 220,000.00K27, 984,000.00. while the Marketing Manager, who is senior, has an annual basic salary of

The report also states that tax on gratuity for Directors amounting K680, 169,201.00 accruing between 2005 and 2008 was evaded!

Management contends that tax for its staff relating to pensions and benefits is picked up by the Corporation!

The report refers this to be a criminal act as it amounts to tax evasion. Contrary to tax regulations, management was computing tax on retirement packages and gratuity using PAYE contrary to requirements of Terminal rates.

To this effect, a colossal amount of K7, 229,870, 494.59 (K7.2 billion) has been written off between the period of April 2003-March 2009!

Management contends that it had paid K9.8 billion to 71 workers who had retired and the total amount of tax written off was only K1, 013,381,014.85!

The audit also castigated management for failing to run a pension schemeoperational funds to pay retirement packages and monthly pension salaries. contrary to conditions of service for its workers, and that it relies on

The report also cites irregularities on payments to management on various issues relating utility bills, purchase of ‘talk-time’ for 27 management staff.

DISPOSSAL OF ASSETS

The report further noted management disposed the corporation’s asset in an irregular manner. An example is given where the disposed-off six (6) motor vehicles by public tender. However the ‘’successful bidders’’ were given offer letters twelve (12) days before tender closed and the said vehicles were soldbelow reserve prices.

The report also points out where personal to holder vehicles of higher value were sold below valuation price. A case was cited of the Director of Technical Services, who was sold a vehicle bought in 2006 for K87,435,000.00 but was sold at K14,579,786.25 as opposed to the value of K32,788,125.00.

The report cites an old case in the year 2001 when Salasini was accused of ‘faking robberies’.

The Corporation bought two vehicles AAX 6156, and AAX 6155, Toyota Coronas. The vehicles were insured at a cost of K30million.

On 12th January 2003, the Director of Marketing (Joseph Salasini) reported that his personal to holder vehicle AAX 6256 was stolen at gun point in Woodlands around 20hours.

Barely three months later another vehicle AAX 6155 was reported stolen. Salasini stated that the vehicle was stolen from his house around 03:30hrs on 31st March 2009. Later it was learnt that the white book for the said vehicle was stolen a day before the car was stolen! An internal memorandum dated 4th April 2003 bares this strange occurrence!

The audit report concluded that ZNBC has very poor internal audit structure, lacks accounting and procedure practices and has no guiding manuals on these matters. It further states that it lacks registers for fuel, and other. accountable documents

The audit states that while the corporation is audited by KPMG, there is no evidence that the external auditors ever audits revenue collection and expenditure from the Northern region which operates independently.

CONCLUSION

ZNBC occupies a special place in the continued quest for Zambia to democratise and join the free world.

ZNBC also has a heavy burden of promoting responsible and fair coverage of public issues. However ZNBC has failed in this mandate and The Post has assumed the role of agenda setting leaving ZNBC and the other government owned media organisations trailing in tow.

ZNBC is expected to transform into a public broadcaster. It is strange that ZNBC is operating under the ZNBC Act of 2002, which guarantees its revenue from the public but its managers at Ministry of information refuses to allow it to be accountable, transparent and relevant to the public needs of citizens.

The scale of financial abuse is alarming that institutions that are preoccupiedexposing society’s vices were allowed to hide and perpetuaterot. such with

The meagre resources stolen or misappropriated from ZNBC, would have helped it transform to a respectable status had it not been for the greed of a selfish few that have stolen from the poor workers and the uninformed citizenry.

The officials at Ministry of Information led by Ronnie Shikapwasha are expected to correct the rot and not help cover it.

Already workers at the Zambia Daily Mail are also crying to ascertain how the company was allowed to buy a printing press worth over K13.8billion when the going price for a good printing press is USD400,000.00(K2billion) from  Taiwan or USD800,000.00 (K4billion) Germany.

The Post has one of the best printing press in the country and it was only procured for about USD400, 000.00 (K2billion).

It is therefore strange that the Zambia Daily Mail has chosen to pay USD3million for a printing press! The Board went to Botswana to see firsthand the equipment they wish to buy for Daily Mail.

A local agent of Hong HUA Machinery of Taiwan won the tender and will supply a NEWSWEB Printing press with capacity to 35,000 copies per hour. Currently Daily Mail operates the ancient LINO NEWS printing Press.

Daily Mail prints about 7000 – 9000 copies everyday and its circulation hovers around 7000 – 14,000.

Yet the company has procured a highly industrial printing press with capacity to print 35,000 copies an hour! Will Daily Mail be printing for all newspapers in ZAMBIA?

The Board was taken to see various printing presses supplied by Hong Hua in Botswana. The board was shown various brands, Newsfaster, Newsweb and Millenium 11.

The Board chose a printing press similar to the one installed at the Botswana Government Printers which uses the press for multiple uses! The performance capacity of the printing press procured; show that if it is used to print the Daily Mail only, it will be using this machine at 5% capacity!

It is yet to be seen What Hon. Shikapwasha will do. Will he procrastinate and attempt to cover up as suspected? Or will he use this opportunity occurring at ZNBC to bring to higher standards, the operations of the public media?

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