EEC MANAGERS FACE E75M FRAUD CHARGES

MBABANE – Has the Eswatini Electricity Company finally made a breakthrough in its forensic investigation into the alleged multi-million Emalangeni fraud scandal?

After almost a year since the Times SUNDAY revealed that the country’s power utility had been hit by a fraud scandal amounting to E400 million, two managers – one senior and the other is mid level - have been singled out to face the music.

However, the money they are alleged to have cost the company is around E75 million. While the names of the two managers are known to this publication, they have been withheld due to legalities surrounding the matter.

The senior manager sits in the executive management, which consists of the company’s eight top administrators.
The mid-level manager, this publication impeccably understands, faces a total of 24 charges, while the senior one has been slapped with eight counts.
Their disciplinary hearing is expected to commence on Tuesday, May 14, 2019. The E75 million, according to impeccable sources within the public enterprise, is alleged to have been siphoned off the company between the years 2015 and 2018.

Although the two managers have been charged, there are a lot of misgivings within some employees of the public enterprise who feel that they are being made scapegoats of the forensic investigation.
“As far as we know, both these managers were cleared by the forensic investigation and we are surprised that they have now been slapped with charges,” said the sources. 

biggest shocker

They said the biggest shocker was that of the charges against the senior manager because he was never even linked to the forensic investigation.
“Even when some managers were suspended because of the fraud allegations, he was never part of them so it is surprising how he is now part of the suspects,” said the sources. 

This publication understands that the mid-level manager’s charges range from fraud to gross negligence and dishonesty.
“The mid-level manager is the one who is accused of having caused the company to lose a lot of money and his charges implicate a lot of suppliers and service providers who are said to have acted in cohorts with him,” said one of the impeccable sources.

The names of the suppliers and service providers are known to this publication but will not be revealed because no charges have been brought against them.
“It is alleged in the charge sheet that these suppliers and service providers inflated prices and caused the public enterprise to pay more than it was supposed to,” stated the sources.

It is said that with the senior manager, while no alleged fraudulent activity is directly linked to him, he has been charged because he is blamed for not properly monitoring the mid-level manager.

only senior manager

“However, what is not clear here is why it is only the senior manager who has been charged yet there are three or four other managers below him who are supposed to exercise an oversight role on the mid-level manager. It means if the mid-level manager committed the fraud as it is said, these three or four managers to whom he reports should have detected any wrongdoing, not the senior executive,” noted one of the sources.

Further, the sources alleged that during most of the dates on which the alleged fraudulent activities occurred, the senior manager was on leave and, therefore, in their interview, not liable for what happened. The impeccable sources managed to give the Times SUNDAY a glimpse of the charges preferred against the senior manager.

One of these is that of gross negligence in that he allegedly failed in the performance of his duties by not taking all reasonable steps to ensure that the mid-level manager complied with all policy and all prescripts thereto and conducting procurement in a fair, transparent, equitable and cost effective manner.
“Your failure resulted in the organisation suffering a financial loss approximated at E75 million,” reads the charge sheet.

Another charge of gross negligence is that the senior executive allegedly failed to ensure that there was a policy and procedure in place and implemented and/or failed to ensure that strategic stock was included and managed through the Ellipse system for proper internal control and accounting purposes and/or failed to disclose stock in the annual financial statements of EEC.

A third gross negligence charge is that allegedly authorised upfront payments to suppliers and failed to ensure that EEC took up early settlements discounts from these suppliers “thus causing the organisation financial loss of E172 500.00” which was 2.5 per cent of the E6.9 million that was paid to the suppliers.

gross negligence charge

The fourth gross negligence charge is that the senior manager allegedly failed to ensure that stock was properly safeguarded, managed, reconciled and correctly accounted for in the books and records of the EEC.

The fifth gross negligence charge is that the senior executive allegedy failed to ensure that appropriate systems, processes and internal controls were implemented around the use of consignment stock and Vendor Managed Inventory (VMI).

Separate from gross negligence, the senior manager has also been charged for alleged breach of ICT policy “in that you encrypted a company laptop without any authorisation from the organisation”.

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