Titanic battle for Freda Rebecca

Africa Moyo and Darlington Musarurwa
THE Chinese investors in Asa Resource Group (formerly Mwana Africa), who were recently relieved of management duties over allegations of financial impropriety, are planning a major comeback centred on the ouster of interim CEO Mr Toindepi Muganyi and executive director Mr Batirai Manhando, it has been learnt.

Following revelations by The Sunday Mail Business on April 16 of suspected asset stripping and externalisation involving more than US$15 million by then CEO and executive director of Asa Mr Yat Hoi Ning and his proxies, the Asa board fired Mr Ning and group finance director Mr Yim Kwan on April 19.

The duo of Mr Edmund Zhang (chief procurement officer) and Mr Yuan Hu Ching (non-executive director) were also to be sacked thereafter.

As the battle for control of Asa and its money-spinning gold producing unit Freda Rebecca continues, sources say China International Mining Group and Mr Ning — who jointly own more than 23,8 percent of the miner — want an extraordinary general meeting at which Mr Muganyi and Mr Manhando will be sacked. An extensive charge sheet against the two has since been compiled. “A massive boardroom battle is brewing. Very soon, Mr Muganyi and Mr Manhando will be history if the EGM goes ahead,” said a well-placed source.

It is understood that Messres Muganyi and Manhondo are not opposed to the EGM in principle, but they want it held in Zimbabwe and not offshore. This could prove problematic for some of the foreign shareholders as law enforcement agents are understood to be investigating their activities at Freda Rebecca.

The charge sheet

A document seen by The Sunday Mail Business alleges ASA interim CEO Mr Muganyi — who is also the chair of Fidelity Printers and Refiners (a unit of the central bank), and the president of the Chamber of Mines of Zimbabwe — is at the centre of abuse of more than US$11 million at Freda Rebecca.

Mr Muganyi allegedly prejudiced Freda Rebecca of US$7,67 million through acquisition of “overpriced” second-hand ball mills for the Toi mills number 4, 5 and 6 in April 2016.

It is alleged that he did so “without following the approval and reporting procedures of the board of directors of FRGM and Asa”.

CIMG and Mr Ning are questioning how Mr Muganyi spent US$11,7 million on second-hand ball mills when Chinese suppliers of the same equipment were quoting US$3,98 million on engineering, procurement and construction terms. “The three ball mills are in fact obsolete or inadequate equipment and 80 percent of them are second-hand ones which require a great deal of repairs and replacements of spare parts.

“Their functional levels are low and operating capabilities poor. The aggregate production capacity of the three mills is supposed to be 900 000 tonnes per year with each one (producing) 920 tonnes per day. “However, it’s currently just running an average of 570 tonnes per day in April 2017. Frequent mill failure will restrict the total production capacity to below 580 000 tonnes per year, thus causing serious production problems to the company,” reads part of the report.

The Chinese investors appear to exonerate two Hong Kong-registered companies — Qiaoyu Limited and Guangzhou Kogi Import & Export Trade Company Limited — that were previously reported to be part of the conduit used to siphon money from Freda Rebecca.

It is said while Mr Muganyi paid US$605 570 for crane and HIAB equipment hire, Qiaoyu Limited would have charged US$615 000 inclusive of insurance and freight from China to Bindura.

Guangzhou Kogi Import & Export Trade Company Limited had quoted US$330 000 for an 80-tonne loader crane.

HIAB is loosely used to refer to loader cranes of any make. The report adds: “I have reasons to believe that Mr Muganyi had committed gross misconduct and corruption from cheating by damaging the interests of shareholders of a listed company. “I would respectfully request that the boards of FRGM and Asa as well as its regulators in the in UK to (sic) take necessary actions to investigate this matter in order to protect the legitimate rights and interests of its shareholders.”

Last week, Asa company secretary and legal advisor Mr Ian Barry Dearing said the board and management were aware of the allegations levelled against Mr Muganyi.

He accused Mr Edmund Zhang, who he referred to as a “Chinese appointee” of Messrs Ning and Kwan, of concocting the claims. “For my part I have had discussions with staff at FRGM who are aware of the issues raised and am informed that all proper procedures have been followed by FRGM and Mr Muganyi in relation to the matters alleged.

“I have no reason to doubt the veracity of the staff concerned and am aware that Asa Board was aware of the matters complained of several months ago.”

Asa said Mr Zhang had been fired for willfully absconding work.

Harare or London EGM?

Mr Dearing dropped the strongest hint yet that the EGM, if called for by the shareholders, could be held in Harare rather than the traditional London venue.

“The board of Asa is concerned about the adverse press which it has received in recent months and would welcome the opportunity for its shareholders to visit Harare and see the reality and for the Zimbabwean Press also to see the reality of Asa in action.

“An EGM would be an ideal opportunity for such a thing to happen. It would be entirely coincidental that persons who might attend such a meeting could be of interest to law enforcement agencies outside China…

“We do not need any encouragement to return to Zimbabwe, which we will for our next board meeting and probably general meeting. Our company is in the safe hands of three experienced Zimbabwean miners who have the full support of the board of directors.”

But CIMG and Mr Ning are understood to be reluctant to come to Zimbabwe for fear of being arrested.

Pressing ahead

Despite the schemes and counter-schemes playing out at Asa Resources Zimbabwe unit, local management is pressing ahead with its plans.

“In relation to FRGM, management are doing their best to redress the perceived damage inflicted by policies imposed by former executives and implemented by their placemen: this will take time and the continued cooperation of both workers and contractors who we hope will be able to overcome the difficulties which were imposed on them and which (the) Asa board, to a man, regret,” explained Mr Dearing.

Work at Trojan, which was mothballed in 2009, is also understood to be continuing on the re-deep project to extend the life of the mine.

Refurbishment of the smelter is continuing at a “steady pace” as its viable operation require

42,802 total views, no views today

  • brunohzw

    Cant these thieves go quietly. They plundered our resources. What good have they done for the Mine and Bindura community that warrant then to return.