There has not been much business interaction between ZCCM-IH and Industrial Development Committee (IDC), says ZCCM chief executive officer Dr Pius Kasolo.

And Dr Kasolo says mining companies have been under-declaring their profits from the mines because human beings are by nature dishonest and always need a policeman to guard them.

Meanwhile Dr Kasolo says ZCCM-IH has not been able to offload dividends to its shareholders because some companies under it have not been paying dividends to the government investment portfolio for the past 18 years.

This came to light when ZCCM-IH officials appeared before the parliamentary committee on parastatals bodies on Monday.

Responding to a question from Lufubu PF member of parliament Gift Chiyalika who wanted to know some of the improvements which ZCCM had made ever since IDC took over, Dr Kasolo said there wasn’t much business interaction between the two companies.

“I want to find out from you as management, looking at the shareholding structure here, its clear that IDC owns majority that is 60.3 percentage shares and we know that IDC has been in existence for the past four years, so what have been the improvements or advantages of being under IDC from the time that IDC actually acquired these shares in ZCCM-IH,” Chiyalika asked.

Dr Kasolo responded saying, “I don’t think I have an answer to that. We interact but there has not been much business interaction to effect the improvement or non improvement of ZCCM. We have an IDC representative on the board who is very active on board matters and in the committees. He puts a lot of contribution to the performance of ZCCM Maybe that is why we have gotten out of the… I don’t know I cant put anything to that.”

In another question, Zambezi East UPND member of parliament Brian Kambita wanted to find out what milestone ZCCM had put in place to stop the cheating involved in recording outputs from the mines.

“I have a few concerns about the formation of ZCCM Investment Holdings and it being partly owned by IDC. My concerns are around the governance issues which you have elaborated here and explained. However I am more interested in understanding what benefit is there in you belonging to the IDC. For instance, there is a directive I am aware that His Excellency Michael Chilufya Sata (May His Soul Reset In Peace) in a state of the national address to parliament, directed Zambia Revenue Authority to come up with a field based audit team to establish a clear and transparent way of accessing output from the mines. I am glad you have your finance director here because I really want to get this from either him or from yourself,” Kambita recalled.

“In Zambia, we feel that there is a lot of cheating in the investments that are in these mines and we feel that the kind of out put that is coming out of there is not what it should be in reality. Since you are involved in investment in these mines, would you kindly explain to this committee the milestones that have been gained towards achieving that objective?”

Kambita further questioned ZCCM-IH to explain the measures put in place to ensure that the profits made form mining investments were not manipulated.

“And question number two, which is very related to what I said earlier, profits being what they are, they have this an inherent risk of being manipulated. We could have a story here year in-year out that there was no profit in these investments and therefore dividends could not be declared. Could you give us some of the strategic measures you have put in place as ZCCM investment holdings to ensure that this scenario is not chronic. Our interest in the IDC is to see to it that these companies in which IDC has invested like yourselves as ZCCM Investment Holdings start declaring dividends. So what strategic measures have you put in place to ensure that these profits which inherently are subjected to manipulation are not suffering from that risk?” Kambita further asked.

In his response, Dr Kasolo said human beings by nature were not honest.

“I was actually the person who started off the monitoring with president Michael Sata when we wrote the first report and that is the report he basically acted on. And from that report, a lot of interventions have been tried through the Ministry of Mines and also through the ZRA and I know my good friend Mr Chanda has put in place [mechanisms] where people are now monitoring what is mined and what is exported. I wouldn’t blame anyone whether there is cheating or not cheating but I always tell people that human beings are by nature not honest, if there is anything which has no control in whatever they are doing, they turn not to be honest. You need a policeman to monitor what you are doing, if there is no policeman, human beings are dishonest by nature,” he said.

He said that despite being billion-dollar company, ZCCM was not getting value for its investment due to low returns.

“For the moment yes we feel we are not getting value for our investments, we are a very rich company, we are nearly a billion dollar company but our income does not really show that we are a rich company. We get less than 10 percent returns from our investment which is really bad,” Dr Kasolo added.

And when responding to Namwala UPND member of parliament Moono Lubezhi who wanted to find out how ZCCM-IH was operating as a listed company and also a parastatal, Dr Kasolo said there was a conflict which the company was trying to resolve.

“This is quiet a complex issue honorable, we are a listed company and we are governed by listing groups but at the same time, we are treated as a parastatal. So there is a conflict on how we can respond to that because as a government, the government will look at it as a parastatal and treat it as a parastatal. However, the listing rules says government is a shareholder in ZCCM and should be treated equally to everyone who is a shareholder in ZCCM. That is where the conflict is. And we are trying to resolve that by talking to our shareholders IDC to see how we can compromise on that without breaking the rules because if we broke the rule and they found out that we have given out sensitive information to one of the shareholders without the other shareholders, we can be suspended or even fined or charged criminally to inside dealing. Its one of the complex issues but we will try and resolve it with the IDC,” Dr Kasolo responded.

Meanwhile Senanga UPND member of parliament Mukumbuta Mulowa wanted to know why ZCCM was not paying dividends to its company shareholders.

“CEO ZCCM Investment Holdings, its good to see you here. ZCCM investment as an umbrella of all the mining companies in Zambia, its good that you are now part of IDC. I don’t know whether you are going to improve on the way you take business. I say so because CEO, I am one of the dependable shareholders in ZCCM investment holdings. When you offloaded almost 26 million shares on Lusaka Stock Exchange (LuSE) in 2015, I had lions share from your company. But today if I go to any broker out there, they would discourage me to buy shares from this same investment holdings for obvious reasons that from the time you started, no dividend has been paid. At first it was the issue of the low copper prices. Now that the copper prices have gone up on the international market, are we going to see you offloading dividends of giving dividends to the shareholders?” Mulowa asked.

“Second question, most of the ZCCM properties which were sold off to Zambians they don’t have title deeds up to now, I don’t know how far you have gone to give title deeds to those who were tenants.”

In response, Dr Kasolo said four out of 16 subsidiary companies were paying dividends to ZCCM making it difficult for the company to offload dividends to its shareholders.

“When ZCCM was privatised, we were custodians of the shareholdings of the Zambian government. Then we were quiet indebted, so we went through a process of clearing the balance sheet. So there was a debt swap with government and that is when the company was sent into an investment company. That is the time I came in and the time I came in, I was also lucky to find that my colleagues had done quiet a bit of work and we got a huge payout from Kansanshi of which we managed to pay the biggest dividends in the history of Zambia, $40 million. And then later on we had now to change the drive of the company into an investment company also being a care taker company and you may have seen some of the scores we have scored. We have collected nearly $140 million dollars from some of our shareholders who owed us moneyy,” Dr Kasolo explained.

“The reason for dividends not being paid is because out of all the sixteen companies, only four companies pay dividends. Some of the companies for the last eighteen years have never paid dividends. They made excuses that of course copper prices were down but even when copper prices were up, they never paid dividends. Only Kansanshi, CEC, Chibuluma and KCM ever pay dividends. So if you don’t get paid dividends, I as ZCCM cannot pay dividends because we don’t have the money to pay dividends..”

And Dr Kasolo explained that the company was still in the process of processing 14,000 title deeds for Zambians who had bought properties from ZCCM.

“Most properties had no title deeds, we had quiet a number of properties which were given to the sitting tenants and that was part of payments of when they privatised ZCCM. What has happened is we have done quiet a lot on title deeds. We have opened up an office in Kitwe with the conveyancing officers and lawyers who are there to try and speed up the process but there are also issues with the people who also own properties. At times you find that the property has gone through three ownership. So when somebody comes to get the ownership, when you look at the name of the person, that person doesn’t even know who the original owner was. Then some of them, title deeds are there but people haven’t collected them. I think about 14 000 houses are remaining, before they were 46,000 I think,” said Dr Kasolo.