Ex-ZESCO MD Cyprian Chirundu shouldn’t hold 10 000 shares on behalf of Zambians-Chikwanda

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Zesco Limited Managing Director Cyprian Chitundu delivers a speech during the launch of the 330 KV power line transmission Kasama yesterday
Former Zesco Limited Managing Director Cyprian Chitundu delivers a speech during the launch of the 330 KV power line transmission Kasama yesterday

THE managing director of ZESCO is not a public official to hold shares on behalf of Zambians, says Energy Forum Zambia (EFZ) chairperson Johnstone Chikwanda

Mr Chikwanda said the shares must therefore be transferred to the Industrial Development Corporation (IDC) which was the patent company.

He said the forum had learnt with shock that 10,000 shares in ZESCO’s subsidiary company -Kafue Gorge Lower Power Development (KGLPDC) were allotted to then ZESCO managing director Cyprian Chitundu while 990,000 shares were allotted to ZESCO.

Mr Chitundu has been dragged to court for failure to surrender 10 000 shares of Kafue Gorge Lower Power Development Corporation Limited he held in his name as managing director at the power utility firm.

This is contained in a statement of claim filed before the Lusaka High Court accusing the former ZESCO chief of holding on to 10. 000 shares of Kafue Gorge when he was no longer the MD as prescribed by the company Articles.

The company has pleaded with the court to compel Mr Chitundu to surrender the shares to the current ZESCO chief Victor Mundende to allow him perform functions of a shareholder as required.

In 2013, the plaintiff incorporated Kafue Gorge Lower Power Development Corporation as a Special Purpose Vehicle (SPV) for the development of the 750 MW Hydro Power project situated in Chikankata district.

Mr Chikwanda noted that a similar situation was anticipated to happen in the future, saying the forum’s view was that those 10,000 shares must be held by the new owners of ZESCO which in this case was Industrial Development Corporation (IDC) or at a minimum an appropriate government official on behalf of the Zambian people.

“These companies are owned by the people of Zambia and therefore no person who is not a public or government official must hold shares on behalf of Zambians,” he said

And Mr Chikwanda said whether the shares were allotted to the then ZESCO MD in his capacity as the company chef or in his personal capacity with or no monetary value, the forum was of the opinion that this was not best practice in terms of good corporate governance.

“There is a debatable connection in this matter and it is not ‘immoral’ to feel that this is not perhaps the best practice in terms of good corporate governance. This is very strange,

“At the time of the transaction, it is likely that ZESCO was owned by the Minister of Finance and Secretary to the Treasury on behalf of government just like other parastatals unless ZESCO was a special case,” he said.

Mr Chikwanda explained that Zambia was experiencing terrible “energy poverty” leading to colossal loss of business worth millions of dollars per month, saying it was therefore in a hurry to develop power generation facilities.

“To this end, the High Court will do good justice to the people of Zambia to determine this matter urgently as Kafue Gorge Lower Power Development represents not just the hope of Zambia but the hope of the region.”

He further said the forum would monitor the case closely not just because it was in public interest but also for its objective to lobby for best practice in the energy sector.

ZESCO managing director can still attend meetings of KGLPDC because he is a member of the board of directors which virtually owns KGLPDC.

“However, due to possible legal impediments, we hope this matter will be expeditiously determined by the court so that the board of KGLPDC can have smooth unquestionable engagements with all shareholders,” said Mr Chikwanda.

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22 COMMENTS

    • According to multiple reports, the Department of Homeland Security interpreted the orders as not applying to people with passports from those seven countries who nevertheless had lawful permanent resident in the U.S. — a status also known as being a holder of a green card.

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    • Why in the first place was this allowed?

      Is this something that can happen without the awareness of relevant authorities at the ministry of energy such as PS?

      Come, this must be probed, not just surrendering the shares.

      Something is wrong.

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  1. Is it not supposed to be automatic transfer of shares and why has it taken so long to rectify the problem? Is Mr Chitundu’s responsibility to surrender or someone has failed to perform duties? I don’t think the court is necessary. It’s just a way of rewarding some laywer they failed to a give a job

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    • Total incompetence by Zesco company secretary. At the time of allotment Chitundu should have been made to sign two documents: 1. a nominee agreement telling Chitundu that he was a mere nominee shareholder on behalf of Zesco, and not a beneficial owner of the shares. 2. an undated share transfer form signed by Chitundu, that would have allowed Zesco to transfer the shares at any time without Chitundu’s authorisation. This lapse shows the low calibre of senior managers at Zesco.

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  2. “THE managing director of ZESCO is not a public official to hold shares on behalf of Zambians, says Energy Forum Zambia (EFZ) chairperson Johnstone Chikwanda”

    These are the type of Zambians we need.

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  3. Have you ever noticed that this Johnson Chikwanda never condemns the govt…who gave him those shares on the first place? They are about to sale now they have noticed a fellow Zambian can get very wealthy in the process!!

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  4. I suspect he has not been paid his benefit. Pay him his benefits if you have not done that.

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  5. When did this practice started and was it approved by the board then let frank bwalya and other past chairpersons furnish us with then the logic and rational behind this before we effectively comment.

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  6. This is very fishy, to say the least. Why were these shares not allocated to zesco, in the first place, together with the other shares?
    Has chitundu received dividends? If so how is he going to refund the money? Who authorized the shares of a public entity to be in a private individual’s name? Why did the board and minister allow such a serious matter to take place?
    There is a long list of accountability to be brought to account.

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  7. This reminds me of one former VC at UNZA who claimed the shares he held in ZAMNET were allocated to him in his personal capacity!

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  8. Pf cadres given high level positions in parastatals and they end up stealing. This shouldn’t surprise anyone. Pf is the worst thing to happen to Zambia. Pf and lungu must go

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  9. Isnt you yourself Chikwanda eating with your fellow chakolwa jameson,unde Lungu bane nothing serious will happen,even those making noise are just doing it so that they themselves can benefit instd baja benangu.So never take these riff ruffs serious-its a game.Just fold your arms and watch from a distance and let the comedy show begin.After all we lost our respect as a country already.So have fun and enjoy watching fools fighting each other.Next on the headlines will Kambwili against Lungu,Jean Kapata against Bwalya,Lusambo against mwilla etc.hahahahha!!!

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  10. Bane, I am very bamboozled at this scenario. From what I have observed here in RSA governance of parastatals, the Government is the Share-Holder, and it is represented by the Minister responsible for that Sector, and not the CEO of that company. For example, SABC has a CEO, but he is not the Share-Holder, and does not hold any shares. The Minister of Communication represents the Share-Holder (Government), but does not herself “literary” or “figuratively” hold any Shares. The Shares are held by Government, who are the owners of those Shares. How come Zambia gives shares to CEO?

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  11. Mr. Chikwanda seems not understand why CEOs in private and public companies are given shares. Mr. Chikwanda should concentrate on good development of building power station based on the lowest water record. It is a shame that the Ministry of energy and ZESCO Board decided to build 380 MW generator 2X180 MW, at Kariba North Bank Extension overloading the dam. The initial design capacity of Kariba Dam for both Zambia and Zimbabwe is 1400 Maximum, the current installed capacity is approximately 1900MW. Despite the low rainfall it shows how incompetency the Ministry of Energy and ZESCO are. IDC is an useless board. Let each public company operate independently.

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    • In a private company perhaps but this is a public company belonging to GRZ. There should be no private shares given to the individual.

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  12. if it is in his contract to have them in his personal capacity hen they are his. he can be asked to sell them.. question is……are they trasnferrable or not. does he hold them as his?

    let his contract be scrutinized in the courts of law, but my view is that this reminds me of Dr chirwa clive at ZR when he wanted to have shares in ZR

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