A $1,6 million loan deal between Chinhoyi Municipality and a financial institution hangs in the balance after the bank discovered that one of the signatories was previously convicted of fraud. The deal is widely expected to ameliorate the municipality’s financial woes as it battles to fund capital projects and staff salaries.
Salaries are in arrears with workers at some stage threatening to down tools.
The stormy issue was recently brought before council where councillors wanted to know how finance director Mr Tonderai Mukosa, was employed when he had a previous fraud conviction and served a 24-month custodial sentence with labour.
Councillors accused management led by town clerk Mr Mungororo Mazai of failing to exercise due diligence in recruiting the finance manager.
The matter came to light when the bank (CABS) requested CVs of senior managers as it wanted to do a background check on whether they had not been blacklisted before.
As a precondition before releasing the money, the bank ordered council to clear the matter as the board had since approved the loan.
In council minutes dated May 1, 2015 two scenarios emerged where either council knew about the conviction and still went ahead with engaging Mr Mukosa or council was not aware that he had a previous conviction and would take steps to address the matter.
A recommendation was made that the matter be treated as a disciplinary issue. It is therefore recommended that this is a disciplinary issue and requires due process and that while this process is underway, the director of finance would not deal with all financial matters that involve CABS and other banks with immediate effect until disciplinary measures were finalised.
It is further recommended that the director of finance would also not be involved in future transactions involving CABS and other banks, reads the minutes.
Councillors laid the blame squarely on town clerk Mr Mazai with calls for him to step down.
Cllr Voster Mashevedzanwa said that both the town clerk and the finance director should be suspended.
Another councillor interjected saying the issue was about the finance director and not the town clerk. Mayor Test Michaels pointed out that he was the only one who could suspend the town clerk and he had not done so.
This put him in the line of fire as the councillors were now baying for his blood.
Meanwhile, Mr Mazai tendered a resignation letter on June 3, 2015 stating he would serve his notice until August 31.
The letter was read before council and another one was later read showing that he had withdrawn his resignation letter.
Cllrs were of the view that Mayor Mr Michaels sat on the letter of resignation.
Ideally if a person of that stature is to resign, council sits within 24 hours to discuss the matter. However, the mayor, for reasons known to himself, decided to sit on the letter. We smell a fish here, said one councillor.
Councillors then moved a motion to recall the mayor from the chair. The matter is still being finalised. Mayor Mr Michaels said the town clerk was still on duty.