Details have started emerging of how senior officials at the Zambia National Farmers Union embezzled billions of Kwacha in donor funds meant to help small scale farmers.
About 70 small scale farmers who are direct beneficiaries of the donor support will be affected.
In court papers prepared by the Drug Enforcement Commission, ZNFU Executive Director Ndambo Ndambo and former Union President Evelyn Nguleka stole close to K3 billion between 2012 to December 2015.
Mr. Ndambo aged 43, of Farm No. 87a/D/26 Chongwe was yesterday arrested and jointly charged with Dr Nguleka aged 46 of Plot No. 2752, Ndeke Meanwood in Lusaka for theft by servant, obtaining money by false pretences and money laundering contrary to the Laws of Zambia.
The duo is accused of fraudulently authorising the transfer of K906, 750.00 from the ZNFU account to R.N Parks and Gardens on dates unknown but between 1st November, 2012 and 31st December, 2015.
Mr Ndambo purported to show that the said payments were for landscaping and plumbing works at ZNFU Headquarters when in fact he engaged R. N Parks and Gardens to carry out construction and landscaping works at his farm estate in Chongwe.
And the duo is also accused of fraudulently authorising withdrawals of a sum of USD15, 000.00 from the ZNFU Dollar account purporting that the said funds were for various members of staff attending conferences in South Africa when in fact not on dates unknown but between 1st November, 2012 and 31st December, 2015.
In the third count, Mr Ndambo jointly and whilst acting together with other persons unknown did fraudulently obtain household furniture from Décor More Investments Limited valued at K169, 000.00 which was paid for by drawing cheques on the ZNFU account on dates unknown but between 1st November, 2012 and 31st December, 2015.
The said cheques were meant for procuring ZNFU office furniture but the furniture ended up at Mr. Ndambo’s house.
Yesterday, Dr Nguleka stepped down from her position as ZNFU President and consequently relinquished her position as Head of the World Farmers’ Organisation.
The two officials had earlier refused to yield to donors’ demands for the funds to be paid back after the donors which included Sweden, Finland and We Effect urged the Zambian authorities to take firm action against those involved so that the funds intended to benefit small-scale farmers are recovered.
“We need to ensure that accountability takes place by the board but also by law enforcement agencies,” said David Wiking, the head of Development Cooperation at the Swedish Embassy. “It is also important to remember that donors have a due-responsibility, both to tax payers at home in Sweden and Finland but also to farmers in Zambia.”
“The conclusion is that ZNFU has systems that fails, whether by design or by accident,” said Mr Wiking. “KPMG report also concludes that there is significant non-budgeting of cost related to among other things… the executive pay, significantly higher than what has been agreed by the donors,” said Mr Wiking during a news conference.
But the ZNFU board dismissed the audit reports on the institution, saying they were “flawed and not handled professionally”.
The board vice president, Richard Lisimba who is now the Acting President following Dr Nguleka’s resignation said the donors were free to terminate funding to the farmers if they so wished.
Following the release of the preliminary report in January this year, ZNFU top officials engaged in a deliberate attempt to mislead the public by dismissing the findings of the audit carried out by EMM Corporate Partners.
But KPMG Finland, an accounting firm tasked to evaluate the disputed audit did not question the report.
And sources at ZNFU have indicated that the embezzlement at ZNFU was going on at a time when Mr Ndambo was earning US$15,000 as monthly salary
Amongst the biggest audit queries are payments in excess of K1.4 million made to Jambo Vehicle Tracking Limited, a company owned by Ndambo and his wife which were made outside the ZNFU budget.
After the release of the first report in January this year, Mr Ndambo is said to have written a letter to Mr. Wiking, claiming the report is “reprehensible and the insinuations are odious”, and accused the auditors of incompetence, malice and lacking an understanding of the operations of ZNFU, and in full breach of many applicable audit standards.
In addition, he claimed the report “contains inaccurate elements that were not substantiated with the appropriate personnel” which “illustrate a lack of objectivity”.
He further claimed that the report was being used “as a tool to discredit the union and management.”
ZNFU also threatened legal action against the audit, acts of intimidation that the audit “considered both reportable and at odds with Sections 30 and 38 of the Accountants’ Act 2008, given the statutory, protected and privileged nature of audit assignments”.
But the request of the ZNFU Council, the Zambia Institute of Chartered Accountants (ZICA) reviewed the entire audit process and the findings of the preliminary audit report and declared that the auditor, EMM, “complied with all relevant standards and that there is no evidence of any professional misconduct or malpractice, and that there is no basis for any disciplinary action against EMM.
It is an outcome that did not please the union, which has tried to discredit the work of the auditors. ZNFU had previously accused EMM of being “totally ignorant of the joint financing agreement” between ZNFU and the donors.
In February this year, DEC performed a search at the ZNFU offices and Mr. Ndambo’s farm estate in Chongwe which is fitted with a 9-hole golf course, Zebras and Impalas.
The suspects were arrested yesterday and are currently on Police Bond and will appear in court soon.