The Zimbabwe United Passenger Company (Zupco) has been weighed down by glaring financial mismanagement, flouting of Reserve Bank of Zimbabwe foreign exchange regulations and
rising expenses due to inappropriate instruments used to finance debts.
Zupco’s finances for the two years ended December 31 2003 were adverse and did not portray a good picture of the organisation, the company’s auditors Kudenga & Company said in their statement accompanying the financial statements.
Documents in the possession of the Zimbabwe Independent say that financial mismanagement at the bus company was glaring while the increase in revenue was well below inflation indicating a negative growth.
Zupco’s performance during the period under review was below inflation while finance charges were higher than core costs due to high interest.
“The interest was even made higher because the instrument used to finance the debt was inappropriate for the project,” the documents say.
The documents did not however disclose the total debt being referred to.
The passenger company also conceded that the issue of recapitalisation was fundamental since fares are controlled.
During the two years under consideration, the company’s chief operating officers, Clever Zvingwe and Ben Mauchaza, flouted the Reserve Bank of Zimbabwe foreign currency regulations by failing to record foreign currency.
“On the foreign currency issue, they (Zingwe and Mauchaza) agreed that they had reverted to putting money in safes instead of banking it. The chief operating officer from the Southern Region in particular did not give a satisfactory explanation why the foreign currency was not being recorded,” the documents say.
“They were required to declare the money in and out of Botswana in line with the RBZ requirements.”
The documents also say the company’s then chief executive officer Bright Matonga failed to offer a satisfactory response when quizzed by the board on issues raised by the Kudenga report.
Controversy has rocked the transport parastatal, with Matonga resigning under unclear circumstances following reports of financial audits having unearthed anomalies, the documents reveal.
The board felt that Matonga’s responses to the issues raised in the audit were not comprehensive enough as they did not address specific issues highlighted in the report. The report specifically questioned the unexplained balance of the retrenchment package of $494 million and the $64 million paid to a Mrs Majoni.
“In addition the response given by the chief executive in relation to Mrs Majoni was not satisfactory to the board,” the documents show.
Zupco has had to float a new tender after three companies that won the initial tender to supply 250 buses failed to deliver. The first delivery was expected at the end of September but nothing has been delivered yet.