VERBATIM: Court hears IDC scandal in detail

Former Industrial Development Corporation (IDC) Executive Director for operations Paul Siame has told the court that when the Development Bank of South Africa vetted the Corporation before deciding to lend it money, it emerged that two of the board members were linked to criminal activities, with one allegedly arrested for drug related charged in Asia.

And Siame, who is also former State House economic advisor, revealed that former Finance Minister Alexander Chikwanda used an acting Secretary to the Treasury, Pamela Chibomba Kabamba to instruct the PACRA CEO Anthony Bwembya to change the composition of the IDC board.

Meanwhile, during cross examination, Siame admitted that although he still hasn’t received a letter of dismissal from his “employers” (the IDC Board), he agreed to the computation of his gratuity, despite the amount being less than what he was entitled to.

This is a case before High Court judge Edward Musona in which Siame has sued the IDC and the IDC shareholders for unlawfully terminating his contract of employment.

He claims that although he was charged with insubordination, there was no disciplinary hearing for his case.

Siame further claims that it was illegal for the IDC shareholders who are the Minister of Finance and Secretary to the Treasury, to terminate his contract, when it was the IDC board which hired and signed his employment contract.

In this case, IDC is represented by Lubinda Linyama of Eric Silwamba and Company while Siame is represented by former Attorney General Musa Mwenye of Mwenye & Mwitwa Advocates. The IDC shareholders who are second respondents in the matter are represented by Salome Chomba Sakala.

Below is the verbatim of the continued cross-examination:

Linyama: According to the way you interacted at IDC, you also had subordinates working under you isn’t it?

Siame: Yes

Linyama: And you as their supervisor had the power to charge them when they erred in the manner they were working or they misconducted themselves?

Siame: That power, I didn’t have explicitly. What we would do is bring it to the attention of the overall supervisor who is the CEO.

Linyama: And in this case, in relation to your employment, the CEO had the power to charge you if you misbehaved?

Siame: He had that power yes.

Linyama: Thank you. And on the 1st of October 2016, in this letter which has been exhibited here, he exercised that power on you, saying “Mr Siame, I am charging you”, isn’t that correct?

Siame: It is not correct in the sense that I was suspended for almost two months before there were any charges. When we went for a meeting at State House, what was explicit was, what was the reason for suspending me…

Linyama: We are clear on that. But according that letter, is there any allegation relating to that matters prior to your meeting at State House?

Siame: The issue of the Articles of…

Linyama: Yes or No?

Siame: There is yes.

Linyama: which one?

Siame: The issue of Articles of Association I started mentioning it to the CEO as far back, then the issue to do with alleged corruption, I had started raising it following the CEO’s writing… without board approval.

Linyama: So you have this inherent fight with the CEO isn’t it?

Siame: It’s not a fight. Pointing out that some articles were irregularly amended that’s why we are having challenges of coordinating, that’s why we are having challenges of coordinating State owned enterprises is not a fight. How is it a fight? Pointing out that ‘CEO, why have you approved 90 per cent acquisition in this company instead of 25 per cent acquisition’, how is that a fight?

Linyama: According to your evidence, you have categorized yourself as a whistleblower, correct?

Siame: Yes.

Linyama: Where did you blow the whistle?

Siame: I informed the CEO, I informed the members of the Committees of the board.

Linyama: Verbally?

Siame: Verbally yes, because first you deal with it internally. Let me clarify. I also wrote to the CEO on the 5th of September.

Linyama: Where is that letter?

Siame: The memo should be at the Corporation in his office. But if need be, we can produce that letter as well.

Linyama: You had that opportunity to even summon, but let’s stick to what is in court. So after this staff discipline letter, which you were charged under, which you decided to ignore, like we agreed initially, you continued going for work, business as usual. Then you were now given a letter, terminating your employment, isn’t it?

Siame: Yes.

Linyama: What was the date of the letter if you have it there?

Linyama: How many days after being charged?

Siame: It’s 11 days:

Linyama: Now sir, I have tried to look at the documents, I would like you to just clarify how much you were paid when the employment was terminated. How much were you paid in total.

Siame: In total, I need to relook at the… (peruses some documents as lawyer refers him to a specific attachment). Net pay after deductions, is K1,660,880.

Linyama: So you were paid a gratuity on a pro-lata basis?

Siame: Yes

Linyama: You were also paid your leave days?

Siame: I was

Linyama: And all other services, the fuel, talk time, those you were paid.

Siame: I was paid.

Linyama: Mr Siame do you recall signing a document where you agreed to the computations of your dues as paid by IDC? Do you recall signing a document agreeing to that computation?

Siame: I do recall. What happened is that…

Linyama: Thank you, it’s sufficient for me. You also recall signing a document agreeing that the computation for the personal to holder motor vehicle, the utility vehicle, you agreed on a net book value, and signed for it?

Siame: Yes, I do recall.

Linyama: And these documents were executed by yourself about 11 days after the termination, around the 22nd of November 2016, correct?

Siame: Yes

Linyama: Now sir, in terms of payments, did you, at any point, ever go to IDC and tell them that ‘I signed the computation, agreed and acknowledged, but they were wrong?’ Did you ever do that?

Siame: What happened is that…

Linyama: Yes or no?

Siame: No, I didn’t.

Linyama: Thank you. I would like you to look at the charge letter from Mr Chipwende. In that letter that you are being charged for those incidences of insubordination, is there anything to do with the purchase of Zampalm?

Siame: In the charge letter, no.

Linyama: Is there anything to do with how you behave or conducted yourself with respect to the then Minister of Finance?

Siame: No.

Linyama: Among those charges, is there anything relating to your position to go and approach these senior civil servants, that they were not following the guidelines for investment, among those allegations?

Siame: Point “C” says that “asserts that private sector members on the IDC board were corrupt and did not go through security vetting prior to being appointed…

Linyama: The allegation was that you said this on the 17th of October, that was the allegation?

Siame: I did not say it only on the 17th.

Linyama: You repeated it on the 17th?

Siame: On the 20th in a meeting. What this entails, or where I was getting this from; during the same time in 2016, we were trying to raise money from Development Bank of South Africa. And in raising that money, Development Bank of South Africa, asked us to submit the list of board members.

Linyama: Now sir, related to that issue.

Siame: I am still explaining

Linyama: But I am trying to relate that to the question that I am asking

Siame: That’s why I am trying to explain.

Linyama: Mr Siame, you are a person who has got information that the IDC board has corrupt individuals.

Siame: My Lord, I haven’t finished what I was explaining.

Lubinda: You can come and clarify when State Counsel is re-examining you. You need to satisfy the question.

Siame: Yes, I will satisfy it. What I was saying is that in responding to Development Bank of South Africa, when we submitted the names, they came up with issues concerning two particular board members. Those issues they raised were grave. They raised issue that one of our board members had been arrested in Thailand or Philippines on drug related issues. And the other board member, on some financial transactions. So when they raised those issues to us, I got alarmed. That’s how I informed the CEO to say ‘these issues being raised are because our private sector board members, we haven’t taken them through security vetting.

Linyama: Who appoints the board?

Siame: The President who is also the chairman.

Linyama: Did you alert the chairman?

Siame: I alerted his economic advisor and his legal counsel.

Linyama: You wrote a letter to His Excellency the President’s legal advisor that he has chosen crooks or people of questionable character.

Siame: No, I did raise issue that DBSA has raised issues.

Linyama: You wrote a letter?

Siame: No I didn’t write a letter.

Linyama: Mr Siame, these are very serious allegations do you know that?

Siame: They are very serious, I know that.

Linyama: So did you even take time, because you are saying they were not vetted upon appointment, what proof do you have that they were not vetted?

Siame: What I raised is that…

Linyama: Sir, answer my question. Do you have proof that the security wings of this country did not vet board appointees of the IDC?

Siame: No, I don’t have that proof but because…

Linyama: Yes, just there. And you can also confirm that these allegations that are serious about drugs, about financial scams were never proved. It was just the people who were trying to finance the company, telling you that ‘we have heard this about these people’.

Siame: They brought it to my attention and the CEO’s attention.

Linyama: Did they even show you a conviction?

Siame: They just showed us those particular issues that ‘we have issues with these two people, so can you please follow up and find out’.

Linyama: Actually, to borrow your words, I like the way you termed it in your affidavit in reply. To borrow your term, these reports you are complaining about, were unsubstantiated. I have seen you using the word unsubstantiated in your reply. They were unsubstantiated reports you got from DBSA.

Siame: Yes, but the fact that they raised them with us, we had to take it up ourselves as well. I was alarmed my Lord that here is a foreign bank which is formed by the South African government, brining out issues on members of our board. I was alarmed that this board also consists of government officials. Why should a foreign bank be bringing out issues which ourselves, we haven’t yet picked.

Linyama: Because they don’t exist. Just because someone comes and says Mr Siame is like this, I shouldn’t conclude. It’s a serious allegation you are raising. You are aware that this board was appointed by the President?

Siame: Yes.

Linyama: And someone comes and says, he has appointed people who are a risk, what was a prudent thing to do? Write a letter as a person who is very responsible, to say Your Excellency, we have received this report. Or Mr Chipwende, here is a memo from me, can you escalate this to the shareholders? Did you do that?

Siame: I didn’t write a letter.

Lubinda Linyama

Linyama: Did you write an email?

Siame: I didn’t write that because it was the CEO’s duty to write that letter because when I was informed in that meeting with the CEO. We were the two of us and the DBSA representatives. They actually flew in to present that particular issue.

Linyama: So, having heard that, you decided to act as CEO now?

Siame: How?

Linyama: By going to State House, because you are saying it was Mr Chipwende’s job but you ended up doing it yourself.

Siame: No, I said I verbally mentioned to colleagues that we have received these issues.

Linyama: But you went to State House. Why didn’t you tell Mr Chipwende that ‘these are serious issues, do your job’? So coming back to the issues, I would like to close My Lord with the computation that you (Siame) are challenging.

Siame: Yes.

Linyama: What is the disparity in terms of numbers.

Siame: (Browses through documents…)

Linyama: You wanted the company to pay you or calculate the computation based on what amount?

Siame: My salary was K132,160, the computations were based on K132,000. Then second…

Linyama: What’s the difference in numbers?

Siame: K160

Linyama: K160 is what you are complaining about?

Siame: Let me come to that…

Linyama: No no no! Just answer the question.

Siame: I am complaining because when you compute the tax, the taxes are based on the figure which is not correct.

Linyama: And whose loss is that?

Siame: Of course it’s my loss because I didn’t get the money I was meant to get.

Linyama: The figure which is missing is K160, per month.

Siame: Yes, and the other thing which was…

Linyama: No, I am satisfied, wait for my next question Mr Siame. My next question is this. Who are the shareholders in IDC?

Siame: The shareholders are the Minister of Finance pursuant to the Minister of Finance Incorporation Act tab 349 and the Secretary to the Treasury.

Linyama: And those two shareholders are the ones who signed the letter of termination?

Siame: They are the ones who signed the letter of termination, but my contract was not with the shareholders. My contract was with the company’s board of directors. Even in the contract, it says the company shall terminate. It doesn’t say the shareholders shall terminate.

Linyama: Those are legal issues, we shall submit on them.

Siame: Okay, thank you.

Linyama: So is addition to you being paid gratuity on a pro-rata basis for the whole period you were at IDC, the company also paid you three months pay.

Siame: Yes.

Linyama: That is what is bringing the figure to about K1.4 million

Siame: K1.6 million.

Linyama: And you were given an opportunity to buy your vehicle. You were not deprived of that opportunity were you?

Siame: I was given that opportunity, the money was deducted, but to date, I don’t have white book. So I don’t know if it’s my car or if it’s a company car because when I go to pay for Road Tax, it comes out as IDC.

Linyama: So you would like IDC to facilitate change of ownership?

Siame: No, what I am saying is that, that should have been done earlier. I should have been given the white book. Why hold on to the white book if you have deducted money?

Linyama: Sir, when the money was deducted, did you even engage IDC to say ‘Can I have the documents to this vehicle?’

Siame: Yes, I did.

Linyama: You wrote to them?

Siame: No.

Linyama: It seems, Mr Siame, you are a very organised man I must say because you like writing letters or emails. But on certain issues, you just change and become verbal. Who did you see at IDC to say ‘I want documentation for the vehicle?’

Siame: I spoke to the late office manager and to Mr Mulumba Lwatula.

Linyama: They refused to assist you?

Siame: No, they said they will follow it up.

Linyama: But no one has interfered with your possession of that car up to now isn’t it?

Siame: No.

Linyama: You are driving it as you please.

Siame: Not as I please, in December I wanted to go to Botswana, but I couldn’t cross to go to Botswana because I didn’t have a white book. So I was inconvenienced.

Linyama: And you wrote to IDC to say ‘It’s coming out of hand now’?

Siame: No, I didn’t write.

Linyama: You were quiet.

Siame: Yes, because issues were now before court.

Linyama: So in terms of your claim in this court, it is that you were not given a reason for that termination? Is that what you are asserting?

Siame: My claim is that to date, IDC has not formally dismissed me because they are the ones who engaged me. To date I have not received a letter from IDC terminating my contract.

Linyama: But you have received a pay from IDC that ‘we have computed what you are entitled to now, here it is’. And you have accepted.

Siame: I received under duress of course.

Linyama: And this is the same IDC that had charged you with the offence.

Siame: The CEO, not the IDC. IDC would mean the board of directors. The CEO, here it says the Chief Executive Officer is the one who charged me with disciplinary issues.

Linyama: In his capacity as Chipwende or in his capacity as your supervisor?

Siame: In his capacity as Chief Executive Officer.

Linyama: Thank you. My Lord, that will be all from me in cross examination.

At this point, lawyer for the second respondent Chomba Sakala, asked for an adjournment to allow her clients who had been elusive, to come and cross-examine Siame.

She begged for the court’s indulgence for one more adjournment, saying she had been chasing after her clients, but had failed on several occasions, further promising that she had only that day managed to get a contact person through whom she could reach the client and get instructions.

But Judge Musona denied the application, saying the court could not be compelled to move at the pace of litigants, but the other way round.

He then asked Mwenye SC, to go ahead and reexamine Siame.

Mwenye: You are asked whether there was a letter of appointment from His Excellency the President, do you recall that?

Siame: Yes.

Mwenye: And what was your answer?

Siame: My answer was “Yes” My Lord. There was a letter of appointment from the President.

Mwenye: Mr Siame: Do you have any knowledge of how letters to the President are treated?

Siame: Yes, they are marked secret documents.

Mwenye: Now, this letter from the President that you received, did it have any markings?

Siame: It had the marking “secret” at the top.

Mwenye: Let me backtrack a bit. How do you know how letters from the President are treated?

Siame: I was previously appointed by the fifth Republican President as Special Assistant to the President for Economic and Development Affairs.

Mwenye: Now, for the completeness of the record, who was the fifth Republican President?

Siame: The fifth Republican President was His Excellency the late Mr Michael Chilufya Sata.

Mwenye: Mr Siame, why didn’t you produce that document?

Siame: I didn’t produce it because it is marked secret, but I have it.

Mwenye: So do you have any other proof of your employment with the first respondent [IDC]; any document proving that you were employed by the company?

Siame: The contract between myself and the Industrial Development Corporation, and the letter of offer of terms and conditions of service, pertaining to my contract.

Mwenye: Have you availed these documents to the court?

Siame: Yes, My Lord.

Mwenye: Could you point out the documents.

Siame: (Browsing documents)…in affidavit in support.

Mwenye: If you could just tell the court the date of the affidavit and who swore it.

Siame: The date of the affidavit is 8th February 2017, and myself, I swore it.

Mwenye: Could you point out the document name? There is a marking on top of every document.

Siame: The document is PMS1 and the other one is PMS2

Mwenye: Just on PMS1, if you could go to the last page. Could you tell the court who are the signatories to that document?

Siame: The first signature is for Dr Lawrence Sikutwa who was the chairman of the Finance and Administration Committee.

Mwenye: Finance and Administration Committee of what?

Siame: Of the board of the IDC.

Mwenye: That would be the first respondent in this matter, correct?

Siame: Yes.

Mwenye: Okay, go to the second signature.

Siame: The second signature is for the late Ms Clare Banda who was the office manager for the Corporation. And the third signature is mine.

Mwenye: Finally, on this document, for now because we will come back to it, what is the date of this document?

Siame: It’s 11th January 2016.

Mwenye: Now, turn to PMS2. Tell the court what that document is.

Siame: This is the offer of new terms and conditions of service.

Mwenye: Who signed that document?

Siame: The document was signed again by Dr Lawrence Sikutwa, as chairperson of the Finance and Administration Committee, and it’s also dated 11th January 2016.

Mwenye: What is the tenure of the contract?

Siame: The tenure of contract is three years.

Mwenye: From which date?

Siame: From the 28th of January 2015.

Mwenye: For the benefit of the court and ourselves. These documents have the same date. Please tell us, which one preceded the other? Which one came first?

Siame: The contract came first.

Mwenye: Could you reference it by the marking, which document it is?

Siame: PMS1

Mwenye: Now, my colleague asked you extensively about gratuity, you recall that?

Siame: Yes, I do.

Mwenye: Is there any provision in this document that talks about gratuity?

Musa Mwenye

Musa Mwenye

Siame: The contract and the terms and conditions.

Mwenye: Let’s go to the contract. Please look at page 6, in particular 8.2. My colleague asked you about pro-rata payment, you recall that?

Siame: Yes, I do.

Mwenye: Could you read out 8.2?

Siame: (reading the document) “Where the contract is terminated before expiration of the contract for any reason other than dismissal, the employee shall be paid gratuity calculated on a pro-lata basis.”

Mwenye: You recall my colleague raising the issue that you were paid gratuity, you recall that?

Siame: Yes

Mwenye: Could you have been paid gratuity according to this clause if you were dismissed?

Siame: If I was dismissed by the company, I would have been paid…

Mwenye: Read that clause again Mr Siame and answer my question. If you were dismissed and there was a letter of dismissal, would you have been entitled to gratuity?

Linyama: Objection; it’s a leading question My Lord.

Mwenye: My Lord it’s not a leading question.

Linyama: I am objecting My Lord to that question because it’s a leading question.

Mwenye: That’s what I am telling the court that it’s not a leading question, but I will be guided and I also don’t want to belabour the point so I withdraw it.

Linyama: Much obliged My Lord.

Mwenye: Now, look at that clause. Or perhaps let’s move away from that. Did you ever receive a dismissal letter?

Linyama: Objection! It’s another leading question My Lord.

Mwenye: My Lord, this is not a suggestive question, a leading question is a question that is only capable of one answer. This question is capable of even more than two answers. Did he receive a dismissal letter? He can answer. A leading question would be, “you received a dismissal letter, didn’t you?” That’s only capable of one answer. But this is elementary evidence.

Linyama: My understanding of a leading question is one which gives guidance, this is suggestive. “Did you receive?” “Yes I did”.

Mwenye: Or No I didn’t

Linyama: It can be rephrased My Lord. It’s suggesting and it has been placed in a particular context.

Mwenye: I will be guided by the court My Lord.

Judge Musona: Right, I will ask the learned State Counsel to rephrase the question so as to avoid the answer “Yes” or “No”.

Mwenye: You were referred to a document dated 11th November 2016, you recall that?

Siame: Yes.

Mwenye: My Lord I am referring the witness to the document marked PMS6 in the affidavit in support. …Mr Siame, look at that document and tell the court whether there is any reference to disciplinary proceedings.

Siame: There was no reference to the disciplinary proceedings.

Mwenye: Is there any reasons for termination given in that letter?

Siame: There are no reasons given My Lord.

Mwenye: You remember my colleague referred you to a document charging you with disciplinary offences?

Siame: Yes

Mwenye: Have you seen that document?

Siame: Yes.

Mwenye: What is the date of that document Mr Siame?

Siame: 31st October 2016

Mwenye: Concerning that letter and its content, did you ever hear from Mr Chipwende again?

Siame: No

Linyama: Objection My Lord! We don’t need to interject unnecessarily. The court has already offered guidance on leading questions; questions which will produce an answer “Yes” or “No”. These are prescribed at examination [in chief].

Mwenye: My Lord, I didn’t hear you say a leading a question is a question that is capable of producing “Yes” or “No” answer, because that is not the position of the law. Procedure of evidence is that a leading question is a question capable of only one answer. I am not suggesting any answer to the witness. If I ask “Did you ever hear from him?” I am not suggesting any answer at all. He is an intelligent witness, conversant with the language we are using in this court; he can answer. So, I don’t know how to rephrase that question.

Judge Musona: The repeated guidance, is to ask learned State Counsel to avoid framing questions which are capable of giving the answer “Yes” or “No”.

Linyama and Mwenye: Most obliged My Lord.

Mwenye: Now, with regards to disciplinary proceedings, are you aware of any further proceedings after the letter charging you?

Siame: With regards to disciplinary proceedings, I was supposed to be given a hearing…

Mwenye: No, are you aware of any other disciplinary proceedings that came after?

Siame: No, My Lord.

Mwenye: Could you look at PMS6 and tell the court which letterhead was used.

Siame: The letterhead that’s used is Ministry of Finance, Office of the Minister.

Mwenye: Mr Siame, who was your supervisor?

Siame: My supervisor at the Corporation was the Chief Executive Officer, Mr Andrew Chipwende.

Mwenye: Who terminated your contract?

Siame: The shareholders of the Industrial Development Corporation.

Mwenye: By title?

Siame: By title, the Honourable Minister of Finance, Mr Felix Mutati and the Secretary to the Treasure Mr Fredson Yamba.

Mwenye: Now, when you were being cross examined, you kept on referring to suspension, and that the letter charging you came after the suspension. Can you explain that?

Siame: My Lord, I was suspended from work on the 16th of September, 2016 until my reinstatement on the 14th of October 2016.

Mwenye: When you were suspended, what happened?

Siame: When I was suspended, I just received a letter of suspension on the evening of 16th September, 2016. Following receipt of that letter, since I received it in the evening around 22:00 hours, which was a Friday, on Monday…

Mwenye: Before we get to Monday, you are mentioning a letter, have you availed this letter?

Siame: Yes, it’s in the affidavit in support, PMS3

Mwenye: Could you read that letter to the court?

Siame: (Quotes the document) “I write you to stay away from office. This letter serves to notify you that at the second ordinary meeting of the Finance and Administration Committee, the Committee held on 16th September 2016, at the IDC offices, the Committee resolved that you should be directed to keep away from the IDC offices and from performing any IDC duties which were assigned to you, by virtue of your appointment. Accordingly, you are hereby directed to keep away from the IDC offices and from performing IDC duties until further communication from the Committee. This directive is with immediate effect. During this period, you shall continue to enjoy your full salary and other conditions of service, applicable to your condition. You shall further ensure that you adhere to your oath of confidentiality”.

Mwenye: Right now, according to that letter, what was the reason for being kept away from office?

Siame: The reasons were not specified in this letter, My Lord.

Mwenye: How long did you stay away?

Siame: I stayed away until the 14th of October, 2016.

Mwenye: As at the 14th of October, were you aware of the reasons why you were sent away?

Siame: No My Lord.

Mwenye: Let’s get back to exhibit MCK3 in the affidavit verifying answer. My Lord, exhibit MCK3. Could you read out the second paragraph of this letter?

Siame: (Quoting document) “Particulars of the offence are that on 17th October 2016, at a meeting held at the IDC offices between yourself, the Executive Director Corporate Mr Charles Mate and myself, you conducted yourself in the following manner…”

Mwenye: You were trying to explain what happened on the actual date of this meeting, could you explain?

Siame: My Lord, following my reinstatement, on the 14th of October 2016, I immediately went back to my office, that was on Friday afternoon. And I went back to resume duties on the 17th of October 2016. I did not meet the Chief Executive Officer until 20th of October 2016, when we had a meeting in his office to discuss the preparations for the board meeting.

Mwenye: This board meeting, you talked about expansively, when was this board meeting supposed to be?

Siame: The date for the board meeting was not given, but it was due to be held within the month of November.

Mwenye: Now continue

Siame: Yes, when we met with the CEO, as part of the directive…

Mwenye: When you say “we” who are you referring to?

Siame: Me, the Executive Director and another Executive Director for corporate affairs Mr Charles Mate. So when we met with the CEO, it was with the view to brainstorm on the agenda for the board meeting, which was a directive from the board chair. During that meeting, I mentioned to the CEO that the issue of the amendment of the IDC’s Articles of Association as well as the irregular approval of the 90 per cent shareholding into Zampalm will have to be included.

Mwenye: Did anything happen after that?

Siame: After that, we never met with the CEO again.

Mwenye: Mr Siame, you were charged with insubordination, as a result of that meeting. Can you explain how?

Siame: My Lord, even myself to date, I don’t know how that happened. But I was charged following my insistence for the inclusion of the issue of amendment of the Articles and irregular acquisition of 90 per cent shareholding in Zampalm, on the board meeting agenda.

Mwenye: Mr Siame, you have talked about Zampalm, what was the grievance?

Siame: The grievance my Load was that our investment guidelines prohibited acquisition of more than 25 per cent in any one company or associated companies. Secondly, the investment guidelines also prohibited investment in a company that had not been profitable for three years. Thirdly, I also raised the issue of one of our board members who also was a board member at Zambeef Plc, the holding company for Zampalm; his involvement in the acquisition process. Fourthly, I also raised the issue that the CEO excluded us, myself and my colleague Mr Charles Mate from meetings which approved the acquisition, even though we were the ones involved in the technical assessment of the said companies.

Mwenye: What was your technical assessment?

Siame: Our technical assessment of Zampalm was that it was not a viable investment, as during our assessment, the palm plantation should have started producing fruits which would generate revenue in the fourth year. But when the acquisition was undertaken, the plantation was in its seventh year and it was not producing any fruits, palm fruits to generate revenue. Secondly, we had also engaged experts who included ZAFFICO, and International Finance Corporation who had also advised us that the project was not viable.

Mwenye: Let’s pause there. What is this International Finance Corporation?

Siame: The International Finance Corporation is the investment arm of the World Bank. So we were advised that the project was not viable. One, because it was being implemented in a region which does not have conducive climate conditions.

Mwenye: Now, this acquisition of Zampalm, how much was it?

Siame: It was subsequently acquired for US$16 million cash.

Mwenye: Now you mentioned the articles. What was the issue with the Articles?

Siame: My Lord, the Articles of Association with regards the IDC, were irregularly amended with regards to composition of the IDC board.

Mwenye: What was the change?

Siame: The original articles of incorporation did not have the President and Cabinet minister as members of the board.

Mwenye: Have you availed this document and the amendments which were made?

Siame: Yes, My Lord. The Articles are in the affidavit in reply, marked PMS1.

Mwenye: Can you point out the particular clause which was changed?

Siame: The particular clause that was changed is on page 15, sub-article 57 of section 12.

Mwenye: Could you read out the composition of the board according to that document.

Siame: Sub-article 57, section 12 states as follows: “The following shall be the directors of the company; 1. The Secretary to the Cabinet who shall be the chairman of the board of directors; 2, the Attorney General or his representative; 3, the Secretary to the Treasury; 4, the Governor of the Bank of Zambia; 5, two eminent persons appointed by His Excellency the President; 6, one representative to each of the following organisations: (a) Zambia Association of Chambers of Commerce and Industry, (b) the Chamber of Mines, (c) the Zambia Institute of Chartered Accountants, (d) the Zambia National Farmers Union, and (e) the Zambia Council for Construction.

Mwenye: Now, you talked about the amendment. And you said you have provided the document, can you point it out.

Siame: The amendment is marked PMS2

Mwenye: Mr Siame, PMS2 I see is a letter. Can you explain that document?

Siame: PMS2 is a letter from the acting Secretary to the Treasury, Mrs Pamela Chibomba Kabamba, who is instructing the registrar Mr Anthony Bwembya to…

Mwenye: Registrar of what?

Siame: Registrar of Patents and Companies Registration Agency…

Linyama: Objection; My Lord, I have a concern to raise. I am just at loss to appreciate where these issues arose in cross-examination. Specifically, we didn’t raise the issue of amendment of Articles and this type of evidence which is now being brought out. I wish to be guided.

Mwenye: My Lord, with due respect to my learned colleague is that he raised these issues extensively, in particular, this issue arose at “B” where it is alleged in this letter that the witness claims that the Articles of Association of IDC were illegal, in that they were approved by the Minister of Finance. This was very extensively canvased by my colleague on this letter. And this witness has submitted that he had raised the issue of Articles together with the issue on Zampalm. So we are giving him a chance to explain. But I will be guided.

Linyama: My Lord, when the issue of Zampalm was raised I did not stand because I raised the issue of Zampalm. But on this issue about Articles, the record can be revisited, I did not cross-examine the witness.

Mwenye: My Lord, we have made our point. We will withdraw from that…Now Mr Siame, you were referred to PMS7A, tabulation of your benefits, do you recall that?

Siame: Yes.

Mwenye: You did start explaining that you were not paid everything, and that there was a disparity in your salary. Can you explain that?

Siame: My Lord, in terms of agreement, my monthly basic salary was K132,160. But this computation was based on K132,000.

Mwenye: Mr Siame, where do you get the K132,160 from?

Siame: From the terms of conditions of service; from PMS2, affidavit in support, notice of claim.

Mwenye: Where, in particular, in this document?

Siame: From clause three, placement and salary.

Mwenye: Now, according to your salary, were you paid everything due to you?

Siame: No

Mwenye: You said in cross-examination that you did not go to the IDC to complain about the computation and the amount due to you, why?

Siame: I didn’t go to complain because I was of the view that I was being victimised, the people who prepared the computations are the same people who had been preparing my salary all the time when I was employed. And therefore, I did not understand how they came up with wrong computations when it’s the same people who had been responsible for my salary all along.

Mwenye: You were told that you signed documents accepting the computations, you recall that?

Siame: Yes.

Mwenye: Sweep through this document. My Lord, I am showing the witness the affidavit verifying answer. Sweep through that document to the very end. Do you see anything that you signed acknowledging?

Siame: No I don’t.

Mwenye: You mentioned in cross examination that yourself and Mr Charles Mate were reinstated. You also mentioned that he was the Executive Director for Corporate Affairs. Where is Mr Charles Mate working?

Siame: His contract was also terminated.

Mwenye: When was his contract terminated?

Siame: It was terminated at the same time as mine on 11th November 2016.

Mwenye: To the best of your knowledge, was Mr Charles Mate ever charged for insubordination?

Linyama: Objection; My Lord…

Mwenye: I will withdraw that My Lord… Are you aware why Mr Charles Mate’s contract was terminated?

Linyama: We still object My Lord on issues to do with Mr Mate.

Mwenye: One last question. You kept on referring to “we” when you said “we went to State House and when issues were being resolved at the board meeting, who was “we” in the issues you were raising?

Siame: We, included Me, Mr Charles Mate and the Chief Executive Officer.

Mwenye: My Lord, I am glad to say that is all from me.

Hearing continues.

         

Mirriam Chabala

About Mirriam Chabala

Mirriam Chabala is a Zambian journalist who covers current affairs and writes in-depth feature articles on social issues.
Email: mirriam [at] diggers [dot] news

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