HomeNewsCMED moves to recover $2,7 million lost in botched fuel deal

CMED moves to recover $2,7 million lost in botched fuel deal

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CMED (Pvt) Limited is proceeding with hearings of its two executives to determine how the company was fleeced of $2,7 million in a botched fuel deal.

NDAMU SANDU
CHIEF BUSINESS REPORTER

CMED is up in arms with a private fuel supplier, First Oil, after the latter failed to deliver three million litres of diesel despite being paid.

The executives — managing director Davison Mhaka and fuels manager Brian Manjengwa — were suspended last month to facilitate investigations into how CMED lost the money in the deal.

Mhaka’s hearing was supposed to have been held on September 22 but was postponed to October 7 as his lawyer Advocate Lewis Uriri had other engagements.
CMED lawyer Aston Musunga, who is handling Mhaka’s case, confirmed the postponement yesterday.

“It was postponed to October 7. Mhaka’s lawyer was tied up somewhere so he could not turn up so we agreed to postpone the matter,” Musunga said.
The disciplinary committee is chaired by retired judge Justice Simbi Mubako.

Mhaka faces charges of “acts, conduct or misconduct inconsistent with the fulfilment of your express or implied conditions of your contract of employment in terms of Section 4 (a) of Statutory Instrument 15 of 2006”.

This stems from the fact that the CMED board had resolved that bulk fuel be purchased from a company which had the fuel inland, an order Mhaka defied.
He is alleged to have acted in concert with First Oil to defraud CMED.

Mhaka is charged with colluding with First Oil and “deliberately conducted a fraudulent and fake due diligence and defrauded the company of $2,7 million”.
Mhaka faces charges of gross incompetence by awarding a tender to a company without a valid import licence and not on the list of suppliers approved by the State Procurement Board.

He is accused of awarding a tender to a company without first carrying out adequate due diligence “to confirm that First Oil had fuel or the actual capacity to fulfil the tender and purchase order”.

Manjengwa has been attending hearings. The hearing was supposed to have been wrapped up last Friday, but moved to September 30 as Manjengwa was not feeling well, another CMED lawyer Moses Kamdefwere, handling Manjengwa’s case, said yesterday.

Manjengwa faces charges of gross incompetence or inefficiency in the performance of his work in terms of Section 4 (f) of the Statutory Instrument 15 of 2006 for failing to carry out a due diligence exercise on the state of First Oil.

He also faces charges of disregarding a CMED board resolution to purchase bulk fuel from a company which had the fuel in Zimbabwe.

He also faces fraud charges.

In June, Transport and Infrastructural Development minister Obert Mpofu told the new CMED board, chaired by Godwills Masimirembwa, to recover the money, saying First Oil were not “untouchables”.

First Oil had won the bid to supply fuel on the strength that it was offering the cheapest price per litre of $1,21 than three other suppliers — Comoil ($1,25), MAPS Petroleum ($1,26) and Sakunda Energy ($1,28) — despite making an unsolicited bid.

It, however, failed to deliver the fuel.

A board of inquiry chaired by former Attorney-General Sobusa Gula-Ndebele unearthed serious irregularities in the awarding of the tender as no due diligence had been done.

The investigations showed that First Oil won the contract despite the fact that its licence had expired on December 31 2012 and was only renewed on May 27 2013, pointing to lack of due diligence on the part of management.

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