The Sunday Mail
WORKERS of listed asbestos products manufacturer Turnall Holdings, are considering a crippling industrial action to register their discontent over a 50 percent salary cut, particularly at a time when they consider management to be recklessly extravagant, it has emerged. It is also generally felt that management is forcing general workers, who are not paid much, to pick up the tab on behalf of profligate directors.
What has however stoked the disaffection is the controversial role of Turnall’s current company secretary and finance director Mr Kenias Horonga, who incidentally left another listed company – Colcom Holdings in 2012 – where he was also employed as the finance director – under the most controversial of circumstances.
There is a raft of allegations related to financial impropriety that are being levelled against Mr Horonga, workers believe the allegations are being swept under the carpet.
Much of the discomfort is stemming from the company’s declining financial performance.
In the six-month period ending June 30, 2016; Turnall Holdings reported that net income fell to a loss of US$1,8 million against a profit of US$400 000 realised in the comparable period a year earlier.
Cutting salaries is considered a possible route to rationalise staff costs.
Eighty employees have been retrenched since the beginning of the year.
“In order to bring about a return to acceptable profitability at significantly lower levels of production, the Group has resized and realigned its level of operations.
“This process entailed employment costs rationalisation and plant operations consolidation.
“A total of 80 employees have been retrenched and one of the sheet-making machines has been put on care and maintenance.
“The resultant operation, which took effect in July 2016, is capable of meeting current and short term market requirements while also producing an acceptable gross margin and optimising the use of working capital,” said Turnall’s board chairman Mrs Rita Lukukuma in a statement accompanying the company’s interim financials.
Management’s leisure trips to Dubai
It seems workers’ grievances mainly centre on allegations of extravagance and asset stripping by the company’s management. An internal audit report compiled on May 24, 2016 indicated that workers were pushing for some of the directors’ trips to Dubai, Europe and China to be investigated, particularly at a time when the company was failing to pay its workers timeously.
It also outlined the controversial sale of the company’s two buses, including allegations of an improper relationship between FD Mr Kenias Horonga and a company called Maw, which reportedly bought tyres for trucks owned by the controversial director.
No stranger to controversy
Ironically, Mr Horonga’s trucks — which belong to his business Kendo Trucking & Logistics that was formed in November 2011 when he was still Colcom’s finance director — also got him in trouble at the meat processor when he was accused of improperly contracting them to supply coal to the company.
He got US$8 410 from the deal which was later criticised in a forensic audit report compiled by Proctor & Associates in October 2012. His hands were also caught in the cookie jar when it was discovered that a company owned by his wife — Tasean Fashions — had been contracted to supply Colcom’s company jerseys.
The jerseys, which were priced at US$21 each, were considered to be markedly above average market prices of US$14 at the time. Mr Horonga was later arrested after it was discovered that between January and October 2012, he created a system through which he could loan money to himself from the company’s resources.
As at October 31, 2012; he had loaned himself more than US$16 500 without the knowledge of the chief executive officer. In a ringing indictment of his conduct, Proctor & Associates concluded that he “lived a lavish lifestyle which he could not finance from his own income”.
“The GFD (group finance director) put himself under financial pressure due to huge personal debts. He capitalised on the excessive trust put on him and weak internal control systems as an opportunity to commit fraud. Our observation is that the tone at the top, unethical behavior from management encouraged the GFD to rationalise his actions,” read part of the forensic audit report.
The case was settled after he pledged to reimburse the company.
However, in revealing e-mail that Mr Horonga wrote to the then Colcom non-executive director Mr John Koumides on December 13, 2012; he admitted to “have taken a short cut somewhere in the system”.
It now seems as if his past is returning to haunt him. Not only has his conduct proved to be unsettling for workers, it has been considered controversial by some of Turnall’s key suppliers.
Suppliers displeased
Swiss-based asbestos fibre supplier, Ramatex SA, which has since taken Turnall Holdings to court over a US$1,1 million debt, on Tuesday last week wrote a letter of complaint to the Institute of Chartered Accountants of Zimbabwe (ICAZ) against the unethical behaviour of Mr Horonga, who is a qualified member of the institute.
“My displeasure is purely on the conduct of your member who has exhibited the most unprofessional and dishonest traits. He has been giving us prevarications regarded when he intends to settle our account.
“The height of dishonesty and criminality is shown by the transfer he purported to have sent to the bank for our transfer. He gave us proof of payment of US$93 532 done at CABS to our UBS Switzerland account and the POP was duly signed and stamped at the bank.
“We queried that the funds were not reflecting at our bank and he told us that it was due to the delays caused by the RBZ and lacks of funds in the Nostro.
“We understood the ‘predicament’ and we made an alternative to open a local account that they can transfer the funds to.
“Our account was duly opened at Africa Century Limited and we instructed them to transfer the funds to same, to our surprise and dismay it turned out that the funds were not “sitting at the bank” as he had be advising us,” reads excerpts of the letter written by Ramatex SA local representative, Mr Blessing Nyambuya.
Turnall has had to resort to asbestos fibre imports after the closure of Shabanie and Mashaba mines.
Mr Horonga last week referred enquiries from The Sunday Mail Business to officials within Turnall who are authorised to speak to the press.
Asset stripping
What seems to incense workers even more is the alleged inaction by management to investigate and bring to closure the controversial sale of the company’s two buses, including some valuable assets that were auctioned off in 2014.
A report on the allegations into fraudulent transactions, particularly for the Bulawayo plant, that was compiled on February 5, 2014; indicated that there were suspicious circumstances in the way in which the Bulawayo bus was disposed.
Though Bulawayo workers had made a US$10 000 bid for the bus, the auctioneer from ABC later advised the workers that the price had been increased to US$18 000 as it was the price that was being sought by management.
Curiously, the purchase had to be made in cash.
The bus was subsequently sold to a bidder from Harare, a Mr Garainesu Changunda, who had also bought the auctioned Harare bus earlier on.
It later emerged that although the Bulawayo bus was sold voetstoots (as it was) – without two wheels and a battery – some of the company’s workers noted that they been instructed by Mr Horonga to fit the bus with a set of wheels and a battery from the company’s Scania Horse before it was driven off.
It also came to light that during the auction, a machine used for sandblasting and putting PVC on pipes destined for the Namibian market that was loaned from Bulawayo-based Hogwarts, was also sold.
There were also additional items such as the Stanleth Laths machine, a boiler and a Faben Machine “W” Electric motor that were auctioned off despite the fact that they were not on the list of items to be sold.
Turnall responds
As the controversy over the conduct of the directors, including the recruitment of the controversial company sector and finance director continues to grow, Turnall’s managing director Mr Caleb Musonza indicated that he is not privy of the two internal audit reports from the company.
He further absolved Mr Horonga of any wrong-doing. “I am not privy to the documents or reports that you refer to and hence I am not sure of the authenticity or the credibility of the documents or reports or their source.
“You will appreciate that it is normal for any organization, Turnall included, to dispose off of any assets that are excess to its requirements, as and when it’s deemed necessary. Certainly this is not asset stripping, but a normal business undertaking. . .
“In this regard, the disposal of the assets you refer to was done above board with the due Board approvals and necessary justification and procedures. Thus the allegation of asset looting from your source is unsubstantiated and lacks merit. . .
“Given the questionable nature of the reports or documents submitted to you, the credibility of their source, contents and authors as indicated above, Turnall sees no truth in any of the said allegations. The allegations are unsubstantiated and remain unsubstantiated,” claimed Mr Musonza.
