HomePoliticsMirror $160 billion in the red

Mirror $160 billion in the red

Dumisani Muleya/Ray Matikinye

THE Zimbabwe Mirror Newspapers Group, which is owned by the Central Intelligence Organisaion (CIO), is in an “extremely precarious” financial

position as it owes creditors almost $160 billion due to poor advertising and circulation, minutes of a recent board meeting reveal.

This comes as the Daily Mirror has hired a new editor, Dr Joseph Kurebwa, from the University of Zimbabwe to take over the editorial department of the paper which the CIO has wrested control of. Kurebwa’s employment, which has divided the Mirror board, was part of a rescue package promised to the company by its “shareholder”, minutes of a board meeting held on June 23 disclose.

Kurebwa last year predicted in a survey that Zanu PF would win 72 seats in the general election and the party won 78 seats. He also forecast the MDC would win 45 seats and it won 41.

The meeting was attended by board chairman Jonathan Kadzura, his deputy John Marangwanda, Charm Makuwane, Alexander Kanengoni and acting CEO Tichaona Chifamba. Board member Thomas Meke was absent. The current board largely represents the CIO interest in the Mirror.

The minutes obtained by the Zimbabwe Independent show that the company, whose titles include the Daily Mirror and the Sunday Mirror, is in deep financial trouble and is saddled with a staggering debt profile that threatens its survival.

The minutes say the Mirror group has been performing poorly as a result of “low circulation and low advertising”. The company owes $108 billion to its bankers and $50 billion to creditors.

Kadzura told the June meeting that the company was in dire straits and an urgent rescue plan was needed. He suggested that the best way forward would be for the company to buy its own printing press and image setter. The cost was US$1 million for the printing press and US$48 000 for the image setter, the minutes say.

“He said members had appreciated this, but no capital had been injected into the project. In the meantime, the company owes the bank $108 billion, and another $50 billion to other creditors.”

The minutes say the Mirror was only able to get a bail-out package if it accepted Kurebwa’s hiring because “there is a strong correlation between the appointment of the editor of the Daily Mirror and the release of funds”.

Kurebwa’s appointment by the “shareholder” has divided the board and the owners of the papers. Marangwanda expressed his displeasure at Kurebwa’s appointment by the shareholder saying this should have been the responsibility of the board. He queried what value Kurebwa would add to the company.

“He said he was against the idea of rubber-stamping decisions arrived at by other parties. His sentiments were echoed by Mr Mukuwane, who said the appointment of an editor would complicate matters given the prevailing situation where the company was involved in a legal wrangle with Dr (Ibbo) Mandaza.

“He also said the mandate of the board should be clearly explained. The chairman pointed out that Dr Mandaza was editor-in-chief, and therefore Dr Kurebwa’s position would not be in breach of the current structure.”

But Kanengoni chipped in with a different view to break the impasse at the board meeting.

“Mr Kanengoni said if bringing in Dr Kurebwa would result in the release of funds, then the appointment should be effected. However, the board had to register its displeasure with the way the shareholder had conducted himself,” the minutes said.

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