A forensic report conducted by South Africa’s ForFar Forensics has flagged the reopening of Vubachikwe Gold Mine, citing several issues such as mismanagement, mounting debts, and unscrupulous operations.
While workers were looking forward to the reopening of the mine, the prospects are looking bleak as the damning report may be the figurative black cloud hovering over the heads of the workforce that still hoped to be breadwinners again.
Vubachikwe Gold Mine in Gwanda closed on November 8, 2022, after workers downed tools due to outstanding salary payments, poor working conditions, and other issues.
According to the report, Duration Gold, 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$8,592,720 and ZWL 3,556,917,841 as of November 2023.
A monthly debt increase is estimated at approximately US$250,000.00, and it appears that there is no laid-out plan or strategy to service the debts.
The forensic investigation report was conducted between January 2022 and 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 several irregularities that do not portray a positive position for the company to get back on its feet. Many of the problems emanate from the major shareholder’s incompetence, over-expenditures, and the mismanagement of funds.
Mr. Allan Brent Dolan is the major shareholder and Managing Director of Forbes and Thompson, and according to the report, he seems to have an appetite for travelling yet fails to own up to the bills. The investigation report notes that hotel bills are accumulating, with some hotels now only accepting Mr Dolan as a 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 extensive traveling, Mr. Dolan is said to have been involved in ‘reckless trading’ that includes 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 April 8, 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’s mantra of leaving no place and no one behind,” one writer commented.
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 US$70.00, 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 a cash-demanding Exclusive Prospecting Order (EPO) soil sampling project, which has no bearing on 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 has been struggling to pay their employee salaries and wage bills.
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 in the EPO project.
Apart from 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 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 include 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 to the detriment of employees and staff of Forbes and Thompson but also to the National Fiscus. In simple terms, Forbes and Thompson (Pvt) Ltd have not been conforming to the legislative requirements expected in the country.
With all these findings, one would wonder if the idea of reopening the Vubachikwe mine is not just a dummy sold to quiet the creditors.
Vubachikwe was one of the biggest mining companies in Matabeleland South, and its coming back online would create job opportunities for the community, and contribute to the province’s gold output, and the national gross domestic product.