Home » Judicial » U.S $58 Million Lawsuit for ZBC Bigwigs

The Ministry of Information, Media and Broadcasting Services, together with the Zimbabwe Broadcasting Corporation, have filed a lawsuit demanding $58 million from the public broadcaster’s former chairman Cuthbert Dube and five top managers.

Chief executive Happison Muchechetere, general manager news and current affairs Tazzen Mandizvidza, general manager finance Elliot Kasu, general manager radio services Allan Chiweshe and head of finance Ralph Nyambudzi, who are all suspended, were listed as co-defendants with Dube. In the lawsuit, ZBC is listed as the First Applicant, while the Information, Media and Broadcasting Services Ministry is listed as the Second Applicant.

They are accused of being reckless in their management of the entity and unjustifiably enriching themselves through hefty salaries and loans.

It is argued that the six carried out ZBC’s business in a negligent and reckless manner that caused financial prejudice to the company.

ZBC contends that the top brass acted extravagantly and allocated themselves hefty loans at a time when the company was bleeding and in a dire financial state.

The largest amount being claimed by ZBC is $28 million which the accused are said to have connived not to remit to the Zimbabwe Revenue Authority in respect of statutory obligations.

The managers are also accused of abusing $23 million which they took fraudulently from the company.

According to the plaintiff’s declaration, on January 19 2010, the five managers with the approval of Dube, took a loan of $618 000 from CBZ Bank for the purchase of executive vehicles.

It is ZBC’s argument that the six misrepresented that the loan had been approved by the board when it was their own initiative and decision.

They are also alleged to have unlawfully approved a housing loan scheme agreement between ZBC and CBZ Bank on May 5, 2010.

The housing loans, according to ZBC and the ministry, were unlawfully guaranteed in the name of ZBC without the approval of the board of directors.

The five managers benefited from the fraudulent housing scheme and the company suffered prejudice to the tune of $300 000.

The loans in question attracted $24 583 as a three percent administration fees, which was borne by ZBC.

Despite receiving the said loans, the managers in connivance with Dube, continued to unlawfully access housing allowances, thereby double-dipping.

ZBC suffered financial prejudice to the tune of $441 400 as a result of the continued receipt of housing allowances.

In January 2010, the ZBC board approved the chief executive’s salary increase by 10 percent, but Dube and Muchechetere unlawfully increased the salary by 93,869 percent to the prejudice of the company.

On June 1 2011, Dube and Muchechetere unilaterally increased Muchechetere’s salary by 365,579 percent.

In March 2010, the ZBC board of directors approved salary increment of 10 percent for general managers, but Muchechetere and his fellow managers disregarded the board resolution and increased it by 77,11 percent.

In June 2011, the management unlawfully awarded general managers 297,85 percent salary increase without approval from the board.

In January 2010, the managers and heads of departments were awarded a 72 percent salary increment in total disregard of the 10 percent that had been approved by the board of directors.

A year later, the managers and heads of departments were also treated to a 77,21 percent salary increment.

The board of directors approved a 20 percent salary increment for the general staff in March 2010, but the workers ended up getting 30,52 percent.

In March 2011, the workers were awarded 89,175 percent salary increase without the board’s approval, while they got another 22,546 percent increment in March 2012.

On July 25 2013, Muchechetere reportedly received an irregular cash payment of $50 000 as part of his purported back pay, but no tax was deducted from the amount.

Between 2009 and 2013, the management recklessly and negligently failed to remit tax (Pay As You Earn) to the Zimbabwe Revenue Authority in breach of the Income Tax Act.

Failure to remit tax is likely to cost ZBC up to $10 759 494.

During the same period, the management failed to withhold 10 percent tax on the fees paid to artists and authors.

ZBC paid $1 364 393 to artists and authors between 2009 and 2013, but failed to remit $136 493,33 to ZIMRA.

Dube is being accused of theft after taking furniture belonging to the company worth $5 072.

The property was acquired through some barter trade arrangement between ZBC and Teachers’ Furniture where a Samsung 65 Inch LED television set, Opus Plasma stand, four Eland side stools and one Eland coffee table were delivered to ZBC.

It is alleged that Dube took the furniture and kept it for himself to the prejudice of ZBC.

Scanlen and Holderness law firm filed the lawsuit on behalf of ZBC.

Source : The Herald