Hwange Colliery has suspended its MD, Thomas Makore, on allegations of corruption. Acting board chairperson, Juliana Muskwe, says the measure was taken following reports of disharmony within the company’s top management.
“Hwange Colliery wishes to advise shareholders and members of the public that it has become aware of allegations of impropriety that have emerged following a dispute of two senior company officials,” reads a statement from the company.
“As such, Hwange Colliery advises that it has instituted formal investigations into those allegations and shareholders and members of the public shall be advised of the outcome in due course.”
Makore, who recently had a nasty public spat with Hwange Colliery secretary Allen Masiya, has confirmed his suspension, but could not divulge the circumstances and reasons.
Makore was appointed as MD at Hwange Colliery in 2014 and since then, the company’s fortunes have been on the decline, with analysts blaming his management of running down the country’s leading coal producer.
Government holds a 37% shareholding in the mine.
The balance sheet at Hwange Colliery has been deteriorating from a positive shareholders’ equity of $37,2 million in 2014 to a negative $167,7 million in 2016.
Its liabilities outstripped assets by $168 million.
In 2017, the company registered a loss of $43,84 million, while corruption and underhand deals topped its activities.
Its workers have gone for months without salaries and, at some point, the company planned to sell its properties to sustain operations.
Hwange Colliery has also faced challenges in dealing with legacy debts, frequent breakdown of equipment, and high production costs which were causing the company financial strife.
Last year, the Zimbabwe High Court approved a scheme of arrangement, which allows Hwange to pay creditors, including employees’ outstanding wages over time while pursuing a turnaround strategy.
In accordance with the provision of the scheme of arrangement, employees have already been paid through monthly installments since December 2017 says Hwange Colliery.
These installments will continue until all owed employees are fully paid. Installments to trade creditors will start in June 2018.
Output is expected to reach 300 000 t by June 2018. The colliery, whose shares trade on the Zimbabwe, London and Johannesburg stock exchanges, is currently producing 10 000 t of coking coal from its 3-Main underground mine and is looking at raising monthly production to 50 000 t.