LISTED property investment and development firm, Mashonaland Holdings (Mashold), is in negotiations with the Insurance and Pensions Commission (IPEC) to recover misappropriated funds from the pension schemes of two axed executives.
Mashold board chairman, Ron Mutandagayi, told The Financial Gazette that while the group had provided for an impairment allowance of $400 000 for unsecured staff loans following the dismissal of former chief executive officer, Manfred Mahari and former finance director and company secretary, Nodzo Matsangura, the property firm was moving to recover some of this money from Mahari and Matsangura’s pension schemes.
“We made a provision in our accounts of $440 000 because some of the loans were housing loans which had a mortgage on them so there would be recovery. In addition, we will be recovering from their pension schemes. “We made a provision in our accounts of $440 000 because some of the loans were housing loans which had a mortgage on them so there would be recovery. In addition, we will be recovering from their pension schemes.
“We are in the process of working with IPEC as to how much we will get. So the net exposure is probably between $440 000 and $450 000,” Mutandagayi said on the sidelines of the firm’s annual general meeting (AGM) in the capital.
Mahari and Matsangura were suspended in November 2016 for alleged financial irregularities after which an audit revealed that the firm could have been prejudiced of money due to irregularities in the granting of staff loans and allowances.
BDO Zimbabwe Chartered Accountants and Mashold’s internal auditors revealed in separate audits that there had been irregularities in the granting of staff loans and allowances.
In order to have a full understanding of these issues the board resolved to carry out further investigations and appointed KPMG Zimbabwe Chartered Accountants to carry out the investigations. The auditors confirmed the irregularities, resulting in the suspension of the executives.
On the basis of that information, the Mashold’s board appointed an independent hearing authority constituting two retired judges — Justice George Smith and Justice Moses Chinengo — to hear the cases.
“When we discovered the problem we investigated and our investigations confirmed our fears that the loans were being abused and the management were paying themselves unauthorised allowances.
“There were issues around disposal of vehicles that did not fit with the company policy. We appointed independent hearing authorities, the cases were heard and the three individuals were convicted and we have since dismissed them,” Mutandagayi said.
At the AGM, the two were also voted out of the board.
“In fact one of the resolutions we were passing today was two of those people, the managing director and finance director were directors ex-officio so because they were dismissed from their employment we are now regularising,” he said.
Meanwhile, Mashold wrote off $870 000 worth of rental arrears on the back of rising voids as the property market remains depressed, according to acting chief executive, Letwin Mawire.
She said Mashold — which recorded an increase in voids to 29,3 percent as at January 31, 2018 from 27,6 percent during the prior comparable period — had seen its debt collection ratio at 64 percent, a slight improvement from 62 percent in prior year.
“The company wrote off $870 000 worth of legacy arrears, some dating as far back as 2009. Otherwise collection on current tenants remains stable in spite of the difficult operating environment,” she said.
Mawire said the firm had managed to attract a few tenants, but has not been able to completely fill in the space left by voids.
“Generally, the highest vacancy levels were in the Harare office sector as businesses avoid noise, pollution and congestion that is characteristic of the central business district (CBD).
“Management is actively engaging Harare municipal authorities to ensure regeneration and improved management of the CBD. It is hoped that the on-going local development plan review of the Harare CBD will make the CBD more attractive and improve occupancies,” she said.
The firm’s revenue in the four months to January 2018, at $1,5 million, was three percent below comparable period the prior year but five percent above target.