ZAMBIA Railways Limited (ZRL) Board of
Directors have accused ZRL Managing
Director Clive Chirwa of demanding to be paid US$560,000 as his annual salary
(or K248 million per month) which the Board rejected.
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| Clive Chirwa |
The five board
members were responding to allegations by Professor Chirwa that the management
board was corrupt and that the directors were demanding K500 million as sitting
allowances.
However, the
five Board members issued a statement denying the allegation and revealed that
there was in fact mismanagement of the company, and accused the ZRL chief
executive officer of gross mismanagement and serious breaches of corporate
governance ethos.
The five,
who are not serving in Government, are Mark Chona, the chairperson, and members
Geoffrey Mulenga, Irene Mbewe and Jonam Mwansa. The members are paid K2, 600 as
sitting allowances.
ZRL Board
vice-chairperson Oliver Saasa, who issued the statement on behalf of his
colleagues, said that Prof Chirwa had in fact been making decisions without the
approval and involvement of the Board, a practice he said was against corporate
decision-making.
Prof Saasa
said Prof Chirwa embarrassed the Board when he announced that he would invest
the US$120 million Eurobond funds to turn around the company without a
feasibility study which, according to Prof Saasa, was a waste of money.
“As a result
of this development, the Board resolved that Clive Chirwa should not be allowed
to throw money to major restructuring projects until management has submitted
to the Board for approval clearly-argued and properly sequenced activities,”
Prof Saasa said.
“The
Board has received insults from him for maintaining this position and, in one
of his letters to the chairperson of the Board, he stated that he is at a
different level of ‘intellectuality’ to be wasting his time with what he
describes as a useless Board that is doing nothing and delays the
implementation of ‘his’ grand vision.”
He said that
Prof Chirwa was self-centred and did not recognise the Board and had refused to
facilitate the development of a strategic plan for ZRL preferring to use his
document he developed before the Board was appointed.
Prof Saasa
said Prof Chirwa’s differences with the Board started when it rejected his
demand for $560,000 annual salary (or K248 million per month) and 25 per cent
shares in ZRL at the end of his five-year contract.
This is in
addition to K2.6 billion annual bonus and six free tickets per annum for his
wife to UK/Europe which the Board and the Government considered obscene.
He said Prof
Chirwa even attempted to shift the company’s headquarters from Kabwe to Lusaka
which the Board rejected because the move could only be effected with the
Government’s approval and the Board’s endorsement.
Prof Saasa
said one issue that bordered on corruption was Prof Chirwa’s attempt to use his
own company, Clavel Incorporated, to train all senior management staff at the
company without declaring interest.
He was
advised that the Board would not allow single-sourcing as it was against the
Government’s procurement regulations and that President Michael Sata had
already made a clear position on the matter and was briefed on current court
cases regarding anomalous procurement practices.
Prof Saasa
said legal opinion received by the Board suggested that the singular act
bordered on criminality in a country that boasted of zero-tolerance to
corruption.
As managing
director, Prof Chirwa also wanted to chair the tender committee and when the
Board advised him that the move was against good corporate governance, he
refused to accept resulting in tension with some Board members.
In the
meantime, he had advertised big procurement jobs for supply of equipment,
including initiating the recruitment of senior management staff before the
Board’s approval.
“Any
procurement that ZRL management may be undertaking now are outside the
clearance or guidance of the Board and if there are irregularities they are
completely outside the knowledge, let alone sanctioning of the Board,” he said.
On
accusation that the Board suspended the finance manager because she refused to
pay Board members huge allowances, Prof Saasa said there were financial
irregularities and the office of the Auditor General had been requested to
carry out a forensic audit.
He said Prof
Chirwa had refused to shift to Kabwe and was living at Fallsway luxury
apartments and the company was paying K72 million as monthly rentals contrary
to the Board’s directive.
He said that
when the company received the $120 million from the Eurobond funds, the money
was deposited in Zanaco account yielding four per cent interest when Finance
Bank was offering between seven to 12.5 per cent interest depending on the
period.
Efforts to
get a comment from Prof Chirwa proved fruitless as he was not answering the
phone calls.
They are
today scheduled to hold a Press conference in Lusaka to shed more light on
their differences with the managing director.
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