By Ali Matapira | The prospects of Vubachikwe Gold Mine’s reopening are looking bleak as a forensic investigation report identifies a number of issues ranging from mismanagem
ent, mounting debts, and operating in bad faith.
The damning report, which was conducted by ForFar Forensics, a South African forensic company, may be the figurative black cloud hovering over the heads of the workforce that still hoped to be bread winners again.
Vubachikwe Gold Mine in Gwanda closed on the 8th of November 2022, after workers downed their tools due to outstanding salary payments, poor working conditions and other issues. According to the report Duration Gold, who are the owners of Vubachikwe Gold Mine, and its subsidiary Forbes and Thompson (Pvt) Ltd, are swimming in murky waters due to a ballooning debt of over US$ 8 592720.00 and ZWL 3 556 917 841.00 as of November 2023. A monthly debt increase is estimated at approximately US$250 000.00 and there is no laid out plan or strategy to service the debts.
The forensic investigation report was conducted between the period of January 2022 to November 2023. The aim was to look into the overall management of Forbes and Thompson (Pvt) Ltd and its associated group companies in Zimbabwe. The results show a number of irregularities that do not portray a positive position for the company to get back on its feet. Much of the problems apparently emanate from the major shareholder’s incompetence, over-expenditures and mismanagement of funds. MR Allan Brent Dolan is the major shareholder and Managing Director of Forbes and Thompson and seems to have an appetite for traveling yet failing to own up to the bills. The investigation report notes that hotel bills are accumulating with some hotels now only accepting Mr. Dolan as guest if there is a deposit paid in advance. Bronte Hotel in Harare and Musketeers in Bulawayo are cited as some of these hotels. Apart from the extensive traveling, Mr Dolan is said to have been involved in ‘reckless trading’ that include engaging new creditor liabilities despite the company’s inability to pay the new appointees, undervaluing asset sale transactions to benefit related parties at the expense of creditors, and failing to own up to promises made to creditors. This has resulted in Forbes and Thompson losing credibility with its suppliers.
What led to Vubachikwe employees going on strike on that fateful day of 8 April 2022 was not because of their own greed but one can imagine a father spending so much time in the mine only to come home empty-handed. The over 800 employees have been reeling in poverty and yet working in an industry regarded as one of the country’s biggest foreign currency earners does not augur well with President Mnangagwa mantra of leaving no place and no one behind. The Forfar Forensic report notes that during the period of January 2023 to November 2023 workers at Vumbachikwe were receiving a stipend of US$ 100.00 and food hampers worth approximately US70.00, which were only given to the 107 essential services employees. Despite coming up with such a fuzzy selection criterion, the company failed to own up to the stipend.
Mr Dolan as the major shareholder, is being accused of embarking on cash-demanding Exclusive Prospecting Order (EPOs) soil sampling project, which has no bearing to the operations of Forbes and Thompson/Duration Group operations. The EPOs are said to be personally owned by Mr. Dolan and instead of funding from his personal coffers he is diverting cash generated by other subsidiaries such as Met Solutions. As a result, even Met Solutions have been struggling to pay their employee salaries and wage bill. According to the Forensic report, Duration Gold has failed to allocate funding to the Vubachikwe human disaster but instead funded the purchasing of camping equipment and paying samplers engaged on the EPOs project.
Apart from the employee salaries, other creditors in the queue include the Zimbabwe Revenue Authority (ZIMRA), Zimbabwe Electricity Supply Authority (ZESA), and ZINWA. By November 2023, ZESA was being owed US$1 116 000.00, and the money was accumulating at approximately US$60 000.00 per month. The Forensic report indicates that an audit was done into Forbes and Thompson ZIMRA non-compliance and issues of tax evasion that includes, nonpayment and/or inaccurate payment of Pay As You Earn (PAYE) and nonpayment of withholding tax. ZIMRA issued an assessment to the value of US$2 671 6658.00 withholding tax accrued but not remitted. Such action is not only at the detriment of employees and staff of Forbes and Thompson but also to the National fiscus. In simple terms, Forbes and Thompson (Pvt) Ltd has not been conforming to the legislative requirements expected in the country.
With all these findings, one would wonder if the idea of reopening Vubachikwe mine is not just a dummy sold to quiet the creditors. Mr. Dolan has pilling hotel bills, employee salaries dating back to 2022, and a train of other service providers waiting for their pay day. Despite all these pending responsibilities, he goes on to have soil sampling projects that are not benefiting the overall company but an individual. Vubachikwe was one of the biggest mining companies in Matabeleland South and its coming back online would create job opportunities for the community, contribute to the province’s gold output and the national gross domestic product. Alas, this may just be another fallacy.