Joseph Kanyekanye (JK) left his position as group CEO of Allied Timbers Zimbabwe last year after 14 years at the helm. In this question and answer with NewsDay (ND), Kanyekanye gives insights into how he left the group and source of current fight with the integrated timber concern. Below are the excerpts.
ND: What led you to leave Allied Holdings — an institution that had become part and parcel of your life?
JK: I joined Allied Timbers Zimbabwe (ATZ) on September 1, 2001 on an indefinite contract. In 2013, I had made up my mind that I would leave Allied Timbers to pursue other interests, but that was not to be. I was persuaded by the board, then led by Livingstone Gwata, to stay on, on account of what I had achieved for ATZ. But when the board was replaced a few months later, this became the genesis of clashes between the incoming chairman, (Emmanuel) Fundira, and me. This eventually led us to part ways in February 2015.
ND: We understand that you were given a golden handshake. Can you confirm that?
Joseph Kanyekanye
JK: The fact that you didn’t get to hear ATZ or any of its executives being implicated in the so-called Salarygate should tell you that I was leading a loyal, ethical, professional and responsible team that was not out to enrich itself from abusing a public asset. While I would have wanted to disclose what I negotiated as my exit package, I am bound by the terms of a separation agreement that I put my signature on in February 2015, which precludes me from discussing contractual matters save to tell your readers that our separation was mutual.
ND: But have you been paid your exit package as yet? We hear that your case is before the Labour Court?
JK: It’s unfortunate how things have turned out. The current board at ATZ has departed from the initial understanding that I had reached with the previous board after several months of back-and-forth negotiations hence I have had to seek redress from the courts. A ruling has since been made in my favour by the Labour Court, which we now seek to enforce through the High Court. This has never been my wish; one can only hope that ATZ will act with haste to stop this drama.
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ND: When the ATZ board suspended you on January 16, 2015, they said it was to facilitate investigations into acts of corruption, failure to observe operating procedures and gross insubordination. What became of these investigations?
JK: Allow me to begin by getting the facts right. The suspension actually came as an afterthought for I had applied to go on my traditional annual leave from December 18, 2014 to January 23, 2015 in line with ATZ’s conditions of service, having earlier discussed my intention to go on vacation with the chairman. On the December 10, 2014, I was handed a letter in front of my subordinates, directing me to go on forced leave to allow “the board to independently evaluate the operations and financial position of the company”, in my absence. As indicated earlier, this was the tipping point in our relations.
ND: What about the allegations of abuse of office, conflict of interest, corruption and insubordination?
JK: The fact that I am not in prison or going through trial in the courts should tell you that these were nothing, but trumped up charges by those who sought to pursue their selfish interests. The allegations had absolutely nothing to do with my performance or management having done anything prejudicial to the company’s interests. It was more of a fishing expedition. Each year, our accounts were audited and we were never found wanting. Under former chairman (Gwata), we had audits commissioned by the Comptroller and Auditor-General, which exonerated management of any wrong doing. Currently, there is another audit by KPMG. This latest KPMG report is coming ahead of two similar forensic reports by BDO Chartered Accountants and Proctor and Associates who could not find any conflict of interest, preferential treatment let alone corrupt practices by my administration.
ND: How then do you explain the viciousness with which you are being pursued if you did nothing wrong?
JK: In my conversations with my immediate former chairman (Fundira), some of which conversations are on tape, it was made clear to me that my persecution was political. It was put clearly to me that the person who ordered my persecution didn’t want me to stay at Allied any day longer hence pressure was brought to bear on the board to get rid of me at any cost. Another aspect of it is that I then differed strongly with my boss over his leadership style, which bordered on micro-managing the institution as well as usurping the role of management, which was not in line with international best practices and corporate governance requirements. Because I had had enough of it, I decided it was about time for me to leave.
ND: Did you, at any given point, operate a pay structure that had no approval from the board as to give rise to allegations that some of your benefits were not taxed?
JK: At all times, ATZ has been a law abiding corporate citizen. In the period 2013 to 2014, as was the case with the other years before, we asked auditors to look into our remuneration structure and they gave us a clean bill of health. In their report for the period July 1, 2013 to 30 June 2014, Baker Tilly Gwatidzo, who conducted our remuneration audit — the last during my time — had this to say about the group chief executive officer’s salary, benefits and board fees, “the group chief executive officer’s current salary, benefits and board fees correspond with what was prescribed by the board of directors”.
ND: How come you are being asked to remit uncollected tax on your benefits to the Zimbabwe Revenue Authority (Zimra) if recent reports are anything to go by?
JK: The correct position is that Zimra conducted their payroll audit on ATZ last year and directed the current management to gross up untaxed benefits such as motoring, school fees allowances, home security, DSTV subscriptions, rentals and utility bills for management and staff as opposed to the system that we had applied during my tenure, which, by the way, is also legal. As a culmination of that exercise, ATZ found itself with a tax bill of over $600 000 of which a portion of it was said to be “my tax liability” in the sum of about $294 000. ATZ has made unsuccessful attempts to claim that portion from me to the point of asking Zimra to collect the money themselves. I have said no to that because my separation agreement with them is clear that I am no longer ATZ’s employee and, therefore, I have no obligation towards them anymore and vice-versa. Any deductions outside this mutual separation agreement and Zimra tax directive are ultra vires our agreement. That position has since been confirmed by Zimra which, in April last year, categorically stated that the responsibility of remitting tax lies with the principal, that is, the employer. In any case, it’s not as if I received cash for these benefits namely motor vehicle, security, maid, etc. ATZ was paying directly to the providers of the service. It’s also disheartening to note the double standards at play in my case whereby ATZ is only targeting Kanyekanye and not the other staff members who find themselves in the same situation like me.
ND: What if the company decides to withhold your exit package?
JK: This is precisely what they are trying to do hence my decision to seek recourse in the country’s courts. Eventually, justice shall be served.
ND: What would you count among your successes at ATZ?
JK: Since 2001 when I came on board at Allied Timbers, we worked well as a team and, with support from the old board to make ATZ what it is today — an integrated timber business with three divisions. Our performance before my departure speaks for itself. ATZ became undoubtedly the biggest timber enterprise in Zimbabwe, with niche export markets in Zambia, Botswana and some such African countries. Consistently, we have been posting profits and, along the way, we acquired a controlling stake in EC Meikles in 2006 — the largest producer of sawn gum timber in the country. My trophy cabinet is also teeming with acknowledgements from various independent bodies.
ND: What is keeping you busy these days?
JK: I have set up a few businesses that are keeping me busy. I have also gone into consultancy, which is taking me to several African countries and beyond where I am busy deploying the experience that I have gained over the years.
ND: Do you regret leaving ATZ?
JK: I am forever grateful to ATZ for honing my skills and building me into what I am today. I had a wonderful time at ATZ never mind the run-ins I had with a few individuals towards the end of my loyal and dedicated service to the business. Whatever happened, I have learnt to take it in my stride; forgive and forget. I am moving on with my life – no hard feelings.
ND: What was the source of differences between yourself and Fundira?
JK: Now that we are both out of ATZ, I am sure we want to forget about our differences as one horrible dream that is now behind us and focus on the future.
ND: There have been reports that Allied Timbers has been a perennial loss maker. Is this correct?
JK: Whatever the motive, it is wrong and unethical for public officials to give inaccurate statements. The audited financial statements for Allied Timbers are a public record and will disprove this malice. The company consistently made positive gross profits during my tenure and also made positive net profits under the previous board with the exception of 2004 when a decision to impair assets resulted in a book loss. Since 2002 up to 2013, audited results show the group balance sheet grew by 55% with gearing levels of less than 5%, making Allied Timbers the most profitable and least geared timber company in Zimbabwe at the time of my departure.
Attempts to rewrite this narrative fly in the face of audited results. Audited financials actually show that Allied Timbers turnover was going up consistently since dollarisation with just a minor dip in 2013 traceable to reduced export earnings arising from the depreciating Rand in the group’s main export markets coupled with a decision to close the Botswana subsidiary. Allied Timbers was not only profitable, but had no debt burden, thanks to the prudent management of the group under my leadership and my fellow directors in the previous board. I can say categorically that production targets for timber and poles, export sales and low gearing under which this board took over has deteriorated since I left the group in 2015.
ND: Could you respond to claims that there were no exports to talk of at ATZ?
JK: This is completely false as the current board is aware that we were serving local and export orders with the export order payment terms being cash upfront for Zambian orders. There are problems of marketing now but these did not exist when I was in charge.
ND: Do you have any hard feelings against your successor and the current board at ATZ?
JK: I wish my successor, Dr Dan Sithole whom I worked with before, success in running ATZ profitably as I did in 14 years. My only advice to him is that the interests of ATZ shareholders could be best served by unlocking value going into the future instead of launching repeated and costly investigations on issues that had been investigated before with a preconceived objective of substantiating falsehoods.
