MBADA Diamonds has fired its chief administration officer Major Mahlangu for allegedly failing to liquidate a debt of over R200 million owed to one of its suppliers, Gecko.
Impeccable sources at the diamond mining company said Mahlangu was fired last weekend after the Zimbabwe Revenue Authority (Zimra) early this year garnished the diamond miner’s bank accounts for failing to remit taxes.
“Mahlangu, the chief administrator, was fired on Sunday last week through an email that was copied to all senior staff over the manner in which the company has failed to settle its R200 million debt to Gecko,” the source said.
However, Mbada corporate communications executive George Manyaya denied the reports.
“None of your allegations are true,” Manyaya said in a terse email response last week.
Mahlangu becomes the second high profile official to leave the firm in a huff after chief executive officer Patience Khumalo left under unclear circumstances in March this year.
Khumalo is daughter to Mbada Diamonds board chairman Robert Mhlanga.
“Mahlangu was fired and this is related to failing to make sure that the company paid Gecko as was agreed with Zimra when the company’s bank accounts were garnished earlier this year. Mbada owes Gecko R200 million and $247 000 for withholding taxes,” the source said.
The source added: “To date Mbada has only been able to repay $100 000 to Gecko.”
Mbada accounts were garnished twice by Zimra in the past eight months after the firm failed to pay its taxes to the tax collector.
The diamond miner has of late been struggling financially and recently slashed its workers’ salaries by 50% in order to stay afloat.
Zimra in March issued a second garnishee order on Mbada accounts held with BancABC for the second time. The garnishee order was for $22 442 683,22.
Sources close to the matter said it related to withholding tax pertaining to transactions between the diamond miners and Gecko Company.
Mbada acknowledged the tax liability but argued its tax issues were handled at the highest level and the government was aware of the developments and that there was an agreement that the firm paid their taxes in advance to assist the cash strapped government.
Other documents in our possession also showed that Mbada in November last year had its accounts garnisheed over tax liabilities.
BancABC head of operations Martha Muhwati on November 22, 2013 wrote an internal circular 189/2013 to all branch managers, team leaders, relationship managers, banking operations centre, credit operations and corporate banking on the Zimra order.
“We advise having received Zimra garnishee orders on the following clients: Diamond Mining Corporation $5 559 235,41; Mbada Diamonds $132 606,53 and Mbada Diamonds ZAR128 518 628,02,” Muhwati wrote.