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Lincoln Towindo and Debra Matabvu
The appointment of former banker Mr James Mushore as Harare Town Clerk hangs in the balance following allegations of corporate governance malpractices during his stint at NMB Bank.
At least three forensic audit reports compiled by the Reserve Bank of Zimbabwe’s Bank Supervision Division and two by private auditing firm Deloitte and Touche link Mr Mushore to shady deals with Kapp Jack Trading, a diversified wholesale company based in Harare.
There are also indications that Local Government, Public Works and National Housing Minister Saviour Kasukuwere has received recommendations from his officials to stop Mr Mushore’s ascendance on account of the audit findings.
Mr Mushore was NMB chief executive until 2014 when he resigned citing ill-health.
Sources told The Sunday Mail: “Mr Mushore resigned a month after a forensic audit report was issued in September 2014. Were the contents of the audit report the basis of his health problems? He was told that: ‘The forensic audit revealed:
a lack of diligence on the part of the chief executive officer with regard to his failure to alert the board to the exposure of the bank in its dealings with Kapp Jack;
a lack of integrity concerning his failure to disclose interest or relationships;
an ‘appearance of evil’ involving a transfer of funds for other parties;
an apparent effort to hide information from auditors by not handing over his IT equipment for the period;
the facilitation of the breach of exchange controls involving US$155 000.”
The sources said when Mr Mushore was specified from 2004 to 2010, he allegedly used a colleague to illegally operate a bank account on his behalf.
The findings of a forensic audit by Deloitte and Touche were presented to NMB board chair Mr Tendayi Mundawarara on June 30, 2014.
The report, which The Sunday Mail has seen, reads, “. . . in our discussions with management, it appears the relationship that James Mushore had with Paul Mitchel, although he had left KJT (Kapp Jack Trading), raised a belief among the NMB management team that he was in some association with KJT or its management.
“As a result, there appears to have been an indirect influence on the way the account was handled going forward.”
Another Deloitte and Touche audit signed off on September 3, 2014 reasserted this position. A targeted on-site examination by the RBZ of NMB from August 27 to September 2, 2014 alleged Mr Mushore presided over corporate governance malpractices.
The central bank determined that Messrs Mushore and Edmore Musimwa, former head of corporate banking, had shares in Kapp Jack which enjoyed financial facilities from the bank.
The duo did not disclose this relationship to the bank’s board in breach of NMB policies.
The RBZ said despite Kapp Jack showing signs of weakness, the borrowing facility was continuously renewed at increased levels, reaching US$4,9 million by June 30, 2012. In that month, NMB took over management of Kapp Jack.
Additional facilities were then availed to the company and the outstanding amount ballooned to US$10,32 million as at December 31, 2013.
“The examination determined some serious corporate governance malpractices such as failure by some NMB Bank officials to disclose their relationships with directors of a non-performing account,” reads the report.
“Withholding of a pertinent report with critical information regarding the poor performance of Kapp Jack from the board by some NMB Bank senior executives and disguising of severance packages to former Kapp directors as loans.
“The revelations of financial relationship between the bank’s chief executive officer, Mr Mushore, and former Kapp Jack directors have a divisive effect on the bank’s board with the representatives of foreign shareholders expressing their lack of confidence and calling for accountability from Mr Mushore.
“The targeted on-site examination determined financial relationship between Kapp Jack and some NMB Bank officials, namely Mr James Mushore . . . and Mr Edmore Musimwa . . .”
Online Reporter