Financial constraints have left Agricultural Development and Marketing Corporation (Admarc) board of directors failing to start disciplinary proceedings against embattled general manager Rhyno Chiphiko.

Admarc board chairperson Alexander Kusamba Dzonzi in an interview on Thursday said the State produce trader is in financial distress and is prioritising clearing salary arrears of its employees.

Chiphiko: The board did not communicate any probable alternative

He said: “The reason [why Admarc is yet to start disciplinary process] is largely because of lack of funds. We are prioritising other needs as you know employees have not been paid for two months.”

Chiphiko was suspended on May 20 2022 for buying his official vehicle, a Nissan Patrol valued at K107 million, which the board described as an act of extravagance not in tandem with the financial position of Admarc.

While Chiphiko defended the purchase of the vehicle, the board instituted an audit which later led to his suspension and he was supposed to appear before the board within 14 days from the date of his suspension.

The audit established that the procurement of the vehicle was unprocedural and not sanctioned by the board.

Kusamba Dzonzi on Thursday said it was not a must that Chiphiko appears before the board within the two-weeks  he was given.

He said the financial status of the institution has complicated the disciplinary processes against the suspended general manager.

Kusamba Dzonzi further said the parastatal is trying to seek a bailout from the government as such they would not prioritise Chiphiko’s suspension at the expense of struggling employees.

He said: “The disciplinary committee is supposed to meet and thereafter submit a report to the board for recommendations. Based on those recommendations, we will decide whether he has to retain his post or not.

“We are supposed to have on board people who are well versed with employment contracts and the law, and he [Chiphiko] will also be allowed to bring his legal representation. So, we want to make sure all those processes are followed.”

In a separate interview on Thursday, Chiphiko confirmed receiving communication from the board that his disciplinary process will be delayed due to financial challenge.

However, he said the board did not communicate any probable alternatives for his disciplinary process.

Following Chiphiko’s suspension, the Ministry of Agriculture on May 26 2022 seconded Jerome Nkhoma to Admarc as interim general manager.

Secretary for Agriculture Sandram Maweru announced the secondment in a statement indicating that Nkhoma will be the institution’s general manager until all issues surrounding Chiphiko’s suspension are resolved.

The financial performance of the parastatal has over the years been troubling.

According to the 2021 Government Annual Economic Report, Admarc reported K19.8 billion as revenues in 2020, but the bulk of it comprised invoices to the government for undertaking social obligations on its behalf.

As at half-year of the 2020/21 financial year, Admarc recorded a net loss-after-tax of K3.7 billion, mainly because it did not secure funding for commodity purchases in time, the report shows.

On the other hand, the liquidity position of Admarc in the 2019/20 financial year was barely on the margins at a current ratio 1.37:1 while leverage was at 65 percent as measured by debt and equity proportions.

At mid-year, the current ratio had worsened to 1.07:1 and it was projected at the time to further worsen to 0.76:1 by June. 

The post Admarc board yet to act on Chiphiko appeared first on The Nation Online.