Rampant Corruption at AICO –– Audit Report

A KPMG audit report into AICO Africa Limited operations alleges rampant financial maladministration and corruption at the company.

At the centre of the alleged maladministration and corruption is group chief executive officer Happymore Mapara.

But, Mapara yesterday denied the allegations against him and blamed the auditors for incorrectly presenting the report on the businesses of AICO.

The KPMG audit report dated June 16, 2009 shows that the company bought two Toyota vehicles for Reserve Bank officials in exchange for easy access to Zimbabwe dollars that were in short supply last year.

“In July 2008 two motor vehicles (Toyota Hilux models), valued at US$15 700 each, were acquired for two RBZ officials in exchange for Zim dollars cash,” the report read without naming the central bank officials. “There was no agreement in place in respect of these transactions and no other documentation could be provided to auditors. The transactions were, however, authorised by the group CEO.”

But Mapara yesterday said the audit report was badly written and that it failed to capture the real facts.

“The report (audit) is badly written,” said Mapara.  “The auditors failed to capture all the facts which we had supplied. The money for the RBZ officials was wrongly debited into our account, and we provided all the papers to that effect but still the auditors went on to write the report that way.  I did not pay RBZ officials for the Zim dollars.”

The audit said various other deals entered into between the RBZ officials and Mapara last year –– the first one valued at US$18,3 million and the second valued at US$25.5 million, which all benefited AICO at the expense of the public –– were structured by the two RBZ officials.

The audit also says that AICO bought Salamax Trading (Proprietary) Limited for the primary purpose of procuring AICO’s operating requirements. It gets all the financing from AICO.

Salamax is incorporated in South Africa and its accounting function is currently outsourced to a South African accounting firm, Professional Accounting Services. The company contributed 0,3% to the group’s revenue during last year; however, as all sales were to the group companies, this was eliminated on consolidation.

Prior to its acquisition, Salamax was a dormant shelf company. The company was purchased from Professional Accounting Services and is wholly owned by Yutican, a subsidiary of Cottco international limited.

The audit showed that significant amounts of money were frequently transferred into Salamax although the registration process of the company was yet to be completed.

It also cites Nancy, who is allegedly a very close friend of Mapara as the sole director of the company and is the sole signatory on the bank’s accounts and is also responsible for maintaining the company’s accounting records.

“Given the current status of the company’s (Salamax) statutory and registration documentation, the group may have no legal claim to any of the company’s assets,” the audit reads.

Henry Mhara

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