Mozambique: LAM management shocked at allegations of embezzlement

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Mozambique: LAM management shocked at allegations of embezzlement

8:42 CAT | 15 Feb 2024

File photo: Lusa

The management of Mozambican airline LAM says it was “taken by surprise” by the allegations of embezzlement by the South African company that is managing the airline, and is concerned about the impact on its reputation.

In a letter signed by LAM’s director-general, João Carlos Pó Jorge, addressed to the Minister of Transport and Communications, Mateus Magala, and to which Lusa has had access, it is stated that the board met “in an emergency” on Monday, after the press conference in which alleged embezzlement schemes were denounced in ticket shops through automatic payment terminal machines (TPA/POS) that do not belong to the company.

“We did a lightning job with LAM’s internal security to collect all the POS and, of LAM’s 20 ticket sales points, we had collected 81 POS by Sunday. There are some shops where the managers themselves don’t recognise the machines and say they don’t even know who they belong to,” said Sérgio Matos, who is responsible for restructuring LAM, at a press conference in Maputo.

LAM is in the process of being revitalised, with the South African company Fly Modern Ark (FMA) managing it since April last year and a restructuring plan underway.

“We reiterate that this information was not previously shared with LAM’s general management, which was taken by surprise when the information was published in the media. We are concerned about the impact of these statements on the reputation of the company, its workers and possible impacts on the recertification audits and those of major clients due to be carried out later this year,” reads the letter signed by the company’s general manager, contesting the allegations.

The letter states that the management “distances itself from the pronouncements made by the FMA” and claims that LAM’s “cash management (treasury) is under the exclusive responsibility” of that company, which is also “responsible for all payments made” to the airline.

“LAM – Linhas Aéreas de Moçambique SA is always guided by the principle of legality, scrupulously observing the principle of the presumption of innocence in order to guarantee its legal security in all the acts it carries out,” it concludes.

According to the information provided at Monday’s press conference, the inspection began almost a fortnight ago, when the company realised that although the number of tickets sold was rising, the accounts were still far from what was expected.

“We’re selling, but the company isn’t getting all the money, and in the last three months of evaluations, we’ve seen that the difference we were getting was between $2 million (€1.8 million) and $3 million (€2.7 million). In December alone, we had a deficit of $3.2 million (€2.9 million),” noted Sérgio Matos.

He also said that the inspection recorded suspicious cases even in the collection of cash in shops and that the inspection also identified anomalies in the fuelling of aircraft.

“If an aircraft has a maximum fuel capacity of around 80,000 litres, we call it 80 tonnes, [in the documents] the same aircraft is being fuelled at 95 tonnes. So the question is where the remaining 15 tonnes are going,” he asked.

In addition to these situations, LAM’s restructuring director denounced the discovery of an account in Malawi with $1.2 million (€1.1 million), which no one in the company has access to.

The company’s revitalisation strategy follows years of operational problems related to a reduced fleet and a lack of investment, with a record of some incidents, not fatal, associated by experts with poor aircraft maintenance.

Source: Lusa