AN INVESTIGATION has revealed that three top Industrial Development Commission (IDC) officials received in excess of US$500,000 as kickbacks from Chinese nationals during the share purchase transaction in which Marcopolo Tiles Limited sold a minority stake for US$44.8 million.
But Marcopolo Tiles Limited chief executive officer Huang Yao Chi has denied paying any form of gratification to top government officials or senior managers at the IDC, claiming that whatever payment was made was in form of “board fees”.
Meanwhile, IDC Head Corporate Communications Namakau Mukelebai says no payments were made by the majority owners of Marcopolo Tiles Company Ltd to any employee or Board member of the IDC before, during or after the share transaction.
However, a News Diggers’ investigation revealed that Marcopolo majority shareholders Zhang Lingling and Huang Yaochi paid IDC officials in excess of US$500,000 after IDC successfully purchased minority stake in their company.
IDC paid Marcopolo Tiles Limited US$44.8 million as consideration for the purchase of a minority stake in that company, while NAPSA also paid another US$30 million to Marcopolo, which is strange as the company was barely two years old at the time.
The investigation revealed that top IDC officials had personal interests in the share purchase transactions as they individually received money from the investors, straight into their personal accounts.
After the suspicious cash payments, Marcopolo owners appointed some officials as board members, which the investors are using as justification for the payments made.
Meanwhile, a check at PACRA also revealed that none of the three state institutions that bought shares in Marco Polo are listed as shareholders and there is no government representation on the structures.
But responding to a press query, Huang denied the allegations when he was asked whether he could confirm if he, in his personal capacity, or Marcopolo paid any money to IDC members or government officials linked to the share sale.
He said Marcopolo, its shareholders or directors have never paid any form of gratification to top government officials or some senior managers at the IDC, claiming the company only paid board fees to its members.
“The Company pays Board fees to its Board Members who have been nominated by institutional shareholders to seat on the Board as per Shareholders Agreement and as per Board Remuneration Schedule approved by the Annual General Meeting. Membership on the Marcopolo Tiles Company Limited Board of Directors includes two (2) representatives from the IDC (one of whom is the current acting Board Chairperson), one (1) representative of NAPSA and one (1) representative of the Workers Compensation Fund Control Board. Furthermore, the Board Allowances are paid by electronic fund transfer (EFT) through our bank,” Huang said.
But a News Diggers investigation showed that the Chinese investors paid the IDC officials from their personal accounts.
Asked to indicate what rate the said board members are paid as remuneration and when the company started paying the said officials, Huang said in 2020, Marcopolo spent K769,000 on board remuneration.
“Our current Board was constituted in July 2020 and accordingly Board remuneration became due from this date. In 2020, total spent on taxable Board remuneration was K769,000 whereas as of July 2021, the total spent on taxable Board remuneration was K689,000 as per tax returns, tax payments and tax certificates, representing 0.2% of our sales. There are no irregular financial transactions and payments between Marcopolo Tiles Company Limited and any anyone else, whether an institution or an individual. We make all our payments based on law and the Companies constitutive documents,” he said.
However, according to the investigation, the Chinese officials paid over K10 million to IDC officials.
Further the investigation revealed that some PF surrogates also received huge unexplained amounts of money from the two Chinese owners of Marcopolo on several occasions.
Recently, the Marcopolo Chief Executive officer told a French television channel that Zambians are not ambitious as they are content with little things.
He went further to say that he was looting for President Edgar Lungu to win this week’s elections for the sake of his business stability.
Meanwhile, responding to a separate press query, Mukelabai said Marcopolo had not paid any money to any IDC board member or employee.
“The Industrial Development Corporation (IDC) upholds the Law in all its business transactions. Its investment decisions are guided by its investment policies, strategies and procedures as approved by its Board of Directors. No payments have been made by the majority owners of Marcopolo Tiles Company Ltd to any employee or Board member of the IDC before, during or after the share transaction. Furthermore, IDC has not made any payments to the owners of Marcopolo Tiles Company Ltd over and above what was agreed in the transaction documents,” said Mukelabai.