Michael Sata’s economic advisor Paul Siame has revealed that former finance minister Alexander Chikwanda ordered an acting Secretary to the Treasury to illegally change the Articles of Association for the Industrial Development Corporation (IDC) when the late president was in London seeking medical attention.
And Siame who served the IDC as Executive Director Operations, has disclosed that Dr Lawrence Sikutwa declared interest but “actively participated” in the acquisition of 90% shareholding in Zampalm from Zambeef, despite being a conflicted person, as a member of the Zambeef Board and also Board member, plus Investment Committee member of the IDC.
The former State House aide, whose contract of employment was terminated by Finance Minister Felix Mutati in November 2016, says he was terribly victimised when he blew the whistle on the above irregularities and was blocked from attending IDC meetings which approved investment proposals.
He added that in September 2016, the then IDC chief executive officer Andrew Chipwende ordered the human resource manager to break into his office, in the presence of a police officer, in order to search for sensitive documents which could incriminate and expose people that were involved in irregularities within the Industrial Development Corporation.
This is according to affidavits filed in the Lusaka High Court Industrial Relations Division, in which Siame has sued the Corporation over the termination of his employment contract.
“I was instructed to stay away from the Respondent’s offices (IDC) and prevented from performing my duties because I had highlighted irregularities and suspected corrupt practices to the then chief executive officer Mr. Andrew Chipwende. I was therefore punished for trying to protect the [IDC] and was victimised for being a whistle blower,” Siame submitted.
He disclosed that the original IDC articles were illegally changed on instructions from Chikwanda.
“Prior to being instructed to stay away from the [IDC] offices, I had presented to the then chief executive officer of the [IDC], and through him to some members of the committees of the Board that on the 3rd of April, 2014 the articles of association of the Respondent which were approved by Cabinet on the 16th December 2013 were irregularly amended in relation to sub article 57 of section 12 which provides for the composition of the Board. The initial composition of the Board did not have any cabinet Ministers and His Excellency the Republican President was not the Chairperson of the Respondents Board of Directors,” he stated.
“I informed Mr. Chipwende that the amendment was done in contravention of a written Presidential directive issued by the late President Michael Chilufya Sata who had directed the Honourable Minister of finance not to amend the articles and to respect the articles of the Respondent which were approved by cabinet. I further informed Mr. Chipwende that he could confirm the Presidential directive with the Honourable Minister of Finance’s office. Further to what I have stated above, I informed Mr. Chipwende that the Presidential directive was disregarded when the late President Michael Chilufya Sata was out of the country for treatment and the articles of association were hurriedly amended on the instructions of the then Minister of finance when he was acting President without cabinet approval. As a result of which, there were huge discrepancies in the articles because only the Board membership was hurriedly changed without consequential amendments to the other related parts of the said articles, [as shown in] a letter from the then acting Secretary to the Treasury to the Registrar of companies evidencing the said hurried amendment.”
Siame submitted that the alteration of the IDC articles exposed the President who was not supposed to be chairperson of the Board.
“I further informed Mr. Chipwende that the amendment negatively exposed the President of the Republic of Zambia to liability in case of irregularities and illegalities being committed by the Board or members of staff because the President would have to exercise fiduciary responsibilities which attend to all Board members. As a result of the hurried amendments to the articles of association, the [IDC] had not had an annual general meeting with its shareholder since incorporation in 2014 which was in contravention of the Companies Act,” he submitted.
“To my surprise, following my aforementioned representations to Mr. Chipwende, a situation arose in which material decisions affecting the operations of the [IDC] were being made by the chief executive officer himself with a select few members of the Board of directors without consultations or involvement of the Board Chairperson or key institutions of Government such as the Attorney General’s Chambers or the Ministry of Justice.”
And Siame told the court that he questioned Dr Sikutwa’s involvement in the acquisition of 90% shareholding in Zampalm from Zambeef because he was a Board member of both institutions.
“Prior to being informed to stay away from work, I had raised a concern to the chief executive officer Mr. Chipwende in relation to the [IDC’s] decision to invest in a company called Zampalm Limited in which the [IDC’s] subsequently decided to invest the sum of US$16,000,000.00 cash for the purchase of 90% shareholding in the said Zampalm Limited. I informed Mr. Chipwende that I perceived that the investment was irregular because experts from ZAFFICO and the International Finance Corporation of the World Bank had declared that the project was not viable and that any investment into Zampalm Limited would be a total loss. I highlighted to Mr. Chipwende that the investment in Zampalm appeared to be against the [IDC’s] set investment guidelines which provided that the [IDC] could only purchase a maximum of 25% of the total shareholding of any company. I also informed the Chief Executive Officer that the [IDC’s] investment in Zampalm Limited would breach the [IDC] investment guidelines which required that investments could only be made in companies that had operated profitably for at least three years. Zampalm Limited had not performed or operated profitably for three years as required by the investment guidelines – [as shown in] a true copy of the [IDC] investment guidelines which were approved by the [IDC] Board of directors, chaired by His Excellency the President of the Republic of Zambia on 29th December 2015,” he explained.
“In addition to the foregoing, I also queried the involvement of Dr. Lawrence Sikutwa in the acquisition of 90% shareholding in Zampalm Limited as he was a member of the Board of Zambeef which was the parent company of Zampalm, Limited. Mr Sikutwa was also a member of the Board of the [IDC], therefore his involvement in the acquisition appeared irregular. Although he declared interest in the acquisition Mr. Sikutwa actively participated in the meetings over the acquisition – [as shown in] the true copies of my handwritten notes of the proceedings of the investment committee meeting of the [IDC] Board of directors which was attended by the directors of Zampalm Limited at which Mr. Sikutwa actively participated.”
He told the court that after raising the above issues, the IDC Board excluded him from attending Investment Committee meetings which approved the purchase of Zampalm.
“On the 27th of July, 2016, at the 2nd Investment Committee meeting chaired by Mr. Robinson K. Zulu and attended by two other members, Mr. Isaac Ngoma and Mr. Geoffrey Sakulanda, the chairperson excluded myself, Mr. Charles Mate who was the executive director – corporate affairs and all other technical staff members from the meetings and from then on, the deliberations over the Zampalm transaction were done to the exclusion of myself and other technical staff who had raised objections to the transaction. I protested our exclusion from the meetings to the chief executive officer because we were the ones who undertook the technical work and liaised with the experts who gave negative opinions. The Zampalm transaction was approved after our exclusion on the 30th of August, 2016 when the meeting referred to above was reconvened,” he submitted.
“As can be seen from the facts stated above, following my inquiry into the [IDC’s] proposed investment into Zampalm Limited and the amendment of the Respondents articles of association, I was informed that a decision had been made that I, together with the executive director – corporate affairs, should stay away from our offices as well as stop conducting our duties. Therefore, the assertion that I was asked to stay away from the [IDC] offices because I opted not to sign the renewed contract of employment is false and laughable. At no time did I refuse to sign the contract of employment but, I had in fact accepted the terms of the contract of employment, and that was the basis upon which I remained in employment. The contract of employment which governed my relationship with the [IDC] is the contract [shown] in my Affidavit in support of the notice of complaint which was expressly affirmed and amended by a letter dated the 11th January, 2016 signed by Dr. Lawrence Sikutwa as chairperson of the finance and administration committee of the [IDC] board of directors.”
Siame said President Edgar Lungu tried to intervene in his matter after armed paramilitary officers blocked him from entering his office.
“Contrary to the [IDC’s] assertions, I was informed of the order to stay away from the office in the evening of Friday, 16th September 2016. I reported for work on Monday, 19th September, 2016 but I was not allowed entry into my office by four heavily armed paramilitary police officers. I only officially reported for work after I was reinstated following the intervention of His Excellency the President, Mr. Edgar Chagwa Lungu who ordered that myself and Mr. Charles Mate be reinstated and that the Board should follow proper procedure with regards us. The President is the Chairperson of the [IDC] Board,” he stated.
Siame said as a whistleblower, he deserved to be commended and protected, but not victimised.
“Following my inquiries to the chief executive officer as already alluded to above, the [IDC] proceeded to write to me and levelled charges. The charges were all related to issues I had raised with the chief executive officer relating to the operations of the [IDC]. Further, the said charges where not substantiated but where intended to victimise me for raising irregularities being committed by certain officers of the [IDC] as indicated above. As a whistle blower, I should have been commended and protected and not victimised in the way I was,” he told the court.
He denied ever attempting to gain access to Chipwende’s office to collect documents, as he was accused, adding that it was in fact his office which was broken into.
“I did not communicate with the Company secretary Ms. Rumbidzai Mutasa to threaten that I would fire her, neither did I forcibly gain access to the office of the chief executive officer to collect unknown documents. It was in fact the [IDC’s] chief executive officer, who, on 20th September 2016 instructed the [IDC] human resource manager to dismantle the locks to my office in order to obtain documents from the said office. This was all done in the fear that I had damaging documents that could incriminate and expose people that were involved in irregularities within the [IDC]. On the 20th September 2016, the chief executive officer instructed the information technology specialist, Mr. Mulumba Lwatula, to shut down my official email address and to re-route all emails sent to my email address to the chief executive officer and to Mr. Mateyo Kaluba. The dismantling of the locks to my office was witnessed by a Zambia Police Officer Inspector Muchindu,” disclosed Siame.
“At no time did I intimidate any of my colleagues whilst I was in employment, however as already alluded to above, the charges of insubordination where as a result of my inquiries made to the chief executive officer over irregularities I discovered. I was very emphatic about my objection to the irregularities but the passion and emphasis I attached to my protestations against irregularities certainly did not amount to intimidation.”
He further claimed that after the termination of his employment, he never got his full terminal benefits.
“The [IDC] has never formally dismissed me but my contract of employment was terminated by letter dated 11th November 2016 written to me by the Honourable Minister of Finance, which termination was in direct contradiction to the very explicit instructions of His Excellency the President of the Republic of Zambia as Board Chairman of the [IDC] who ordered a stop to the victimisation,” submitted Siame.
“In addition, the said honourable Minister of finance terminated the contract without following the law or internal company procedure and without giving any reasons for the termination of employment. As I alluded, my terminal benefits were not paid in full as the same were calculated on the basis of a salary of ZMW132,000.00 and not ZMW132,160.00 which was my monthly basic salary.”