Salarygate: Charamba admits failure

PRESIDENT Robert Mugabe’s spokesperson George Charamba has admitted that he was incompetent as a board member at the Premier Services Medical Aid Society (PSMAS), adding that he was willing to step down if asked to do so.


Speaking on a ZiFM current affairs programme The Platform with Ruvheneko Parirenyatwa on Wednesday night, Charamba said the board was guilty for not asking the right questions and that resulted in senior managers earning obscene salaries.

“I agree, this is why, in fact, if the requirement is that we resign today, we would, because we failed Zimbabweans; we failed PSMAS and if we have to justify our continued stay on the board. We must be seen to be taking appropriate remedial action, I really admit that on that particular score, we did not ask correct questions and forthat reason we deserve to be condemned,” Charamba said.
Asked why he did not resign to show that he was a man of integrity, Charamba said there were legal challenges.

“There is a legal problem. PSMAS is a membership society; it is not answerable to the government; it is not a parastatal and it is not a State enterprise,” he said.

“If the board today resigns, you immediately create a vacuum which can only be plugged through an AGM (annual general meeting) or EGM (emergency general meeting); you do not want in such a sensitive institution which is second to the government by way of health provision, that vacuum to develop.”

Charamba said the government could easily force changes by withholding its contributions or an AGM through civil servants.

Charamba has been accused of being complicit as a member of the board committee that deals with remuneration, but he clarified that the committee was created following revelations of the outrageous salaries.

“The committee which is being spoken about did not exist at PSMAS. We only created it as an emergency ad hoc committee after the revelations of the bad goings on at PSMAS. So really, it’s not like from the time of joining that board there was that committee,” he said.

He revealed that PSMAS had a “very strange” way of doing its business “and I say that with a full sense of guilt. You do not get the whole board to become the employer of the chief executive”.

He said it was the organisation’s tradition since its establishment in the 1950s that the chairperson of PSMAS and the chairperson of its subsidiary PSMI (Premier Service Medical Investments) come together to decide on the conditions of service of a chief executive.

“So essentially that whole matter was set between three persons, one interested, two who are in fact usurping the role of the board; that was the practice as it existed from the 1950s as we found it and culpably as we allowed it to continue. This is where I would plead guilty a thousand times,” Charamba said.

He said he did not approve the chief executive’s salary saying it was always the “two chairpersons not the whole board, but to the extent that I should have challenged that”.

Although the issue of terms of service, including the housing scheme on the management was not a board issue, he said they should have asked questions on what the benefits were.

“The housing scheme was not for board members; it was for management. Remember the whole issue about conditions of service were never a board issue. What the board would get was the sum total of the labour cost and the benefits and we always judged it in relation to the total revenue of the company,” he said.

“If the percentage was below 35%, which is in fact a healthy relationship, then we are happy.

“Where we faltered is we should have actually unpacked that figure to see who was getting what. Now once beaten, twice shy.”

Charamba said the PSMAS chairperson was forced to resign while the PSMI chairperson tendered his resignation on Tuesday as they offended against principles of corporate governance.

“We now have to go beyond administrative errors; If errors they were, to then wonder whether there was prejudice to PSMAS in a way that suggests criminal conduct. This is what is going to be settled by a forensic audit…If there was, then the law must take its course,” he said.

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