THE Zimbabwe Stock Exchange (ZSE)’s wage bill gobbled up more than US$600 000 in the year to December 2011, with more than half of that said to have been paid out to suspended CEO Emmanuel Munyukwi.
Accounts audited by PricewaterhouseCoopers (PwC) show that staff costs for the exchange amounted to US$665 167 for just 12 employees who mainly consisted of just the CEO, operations manager and several clerical staff.
Munyukwi’s salary bill was said to be more than US$400 000 per annum, which means that he earned between US$30 000-US$36 000 per month, making him one of the highest paid executives in the country.
Munyukwi was suspended in May for alleged incompetence. Among the charges of incompetence was what investigators from the ZSE board termed shambolic minutes of ZSE meetings. The board said in some instances, items that would have been highlighted as important were omitted or lacked detail. Financial records were allegedly poor and there were questionable procurement procedures.
Sources say the larger part of the administration expenses of US$311 520 were attributed to Munyukwi.
In 2010, PwC made recommendations that the exchange should improve on its accounting system. Among PwC’s recommendations was that there had to be a formal policy with regards to allowances for management, including travel.
The auditors recommended that assets belonging to the exchange be physically verifiable and ownership books be kept and registered in the name of the exchange. This followed observation that registration documents for one of the motor vehicles were in the name of Munyukwi and his wife, though these were recorded in the exchange’s fixed assets register. Reconciliation was also to be done between amounts of brokerage fees paid to the exchange by brokers and the records as per the exchange.
Whilst the ZSE was running a huge salary overhead, critical projects such as the automation and computerisation of the exchange were failing to take off the ground, supposedly for lack of funding. However, financial documents in the possession of businessdigest show that the stock exchange had an annual income of US$1,647 million in 2011 and US$1,467 million in 2010 against total expenditure of US$1,034 million and US$929 892 in 2010. This resulted in a surplus for the two years of US$612 947 and US$537 151 respectively.
Total assets of the ZSE amounted to US$1,64 million. The exchange received listed companies fees of US$97 400 and US$75 163 in brokerage fees.
Efforts to get comment from Munyukwi were unsuccessful as his mobile phone went unanswered..
Meanwhile, Bethel Securities stockbroker and MD Geoff Mhlanga resigned from the ZSE board at the exchange’s annual general meeting held last week.
Sources said Mhlanga, who was the stockbrokers’ representative on the board chaired by Eve Gadzikwa, tendered his resignation without giving any specific reason.
Mhlanga confirmed to businessdigest this week he had retired from the board.
He said: “Remember when I was brought back in last year, it was supposed to be for a short time. I wanted to be part of the solution to the ZSE’s various problems and I am glad I have done my bit.”
Mhlanga said the mandate of stockbrokers was to build an institution that did not depend on individuals but on robust systems and structures. He said the board had finalised the recruitment of key skills such as the finance manager and listings manager. A business development manager and an IT Manager would soon be appointed, Mhlanga said.
It is not yet known who will be nominated to the board, amid speculation that it might be one of the younger crop of stockbrokers who are more adaptive to calls for reform at the exchange.