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CEOs to pay back unjustified salaries: Chombo

By Nkosana Dlamini

FINANCE Minister Ignatius Chombo (pictured) says government will soon be forced to demand back millions squandered through unjustified perks by extravagant executives running the country’s loss making entities which ran a combined loss of $270 million in 2016.

The Treasury boss was addressing State entities CEOs, permanent secretaries, boards, State commissions and other senior staff employed by the country’s 107 business units.

In his address, Chombo said parastatals continued to hemorrhage the fiscus as it emerged some executives were awarding themselves three bonuses in a single year.

He said government will soon turn the heat on the culprits by demanding back some of the monies.

“A recent forensic audit of one entity revealed that management had paid itself two bonuses in 2012 and three bonuses in 2013 and mostly likely four bonuses in 2014,” Chombo said.

“Nothing can justify this squandering of such public funds. My ministry will be acting to ensure recovery of such unjustified payments from all those who benefited there from.”

Chombo said some entities that have proven less viable could soon be reduced to ordinary departments under line ministries.

“Directing scarce resources into restructuring or recapitalising potentially salvageable State entities will serve no purpose if the often wilful, wasteful, bad habits of management are not addressed and addressed in a manner which leaves no room for doubt that government is very serious indeed in its determination to ensure strict compliance with the principles of sound corporate governance,” Chombo said, adding that a law to end the rot was being finalised.

“Since previously published corporate governance frameworks and codes have not been taken seriously and in order to emphasise its seriousness of intent in this regard, government has developed a Public Entities Corporate Governance Bill which together with its associated implementation regulations is expected to become law at the end of this year.”

Addressing the same event, Chief Secretary to the President and Cabinet Misheck Sibanda said a 2016 survey of 93 State entities revealed a combined loss of $270 million.

Of these, Sibanda said, 70 percent of them were found to be technically insolvent.

 

The country’s parastatal bosses have long been accused of creaming off the enterprises through salaries and allowances running into hundreds of thousands.

Former Premier Service Medical Aid Society group CEO, Cuthbert Dube was in 2013 found to have been earning nearly $500,000 in monthly salaries and allowances while other top managers within the health insurer took home amounts of up to $200,000.

Following the revelations, government moved to impose a cap on all salaries paid to executives but it has emerged the directive was never complied with while government has done nothing about it.

The Zanu PF led government has often been accused of paying lip service to promises to end the rot with accusations the country’s entities were a cash cow and a patronage tool for the ruling party.

Government is seen to be reluctant to either close down of privatise some of the entities which have been found to be procuring raw materials and services from top government officials who run private businesses.

 

Staff Reporter

The author Staff Reporter

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