TRANSPORT group Unifreight Africa Limited allegedly prejudiced its shareholders on the Zimbabwe Stock Exchange (ZSE) an estimated US$18 million wired into an offshore account in the United Kingdom (UK) in 2014, resulting in an ongoing probe by the Reserve Bank of Zimbabwe (RBZ), the Zimbabwe Independent can reveal.
By Tinashe Kairiza
Documents show that in 2015 one of the group’s local subsidiaries, Pioneer Transport was placed under judicial management arising from mounting debts, with the group recording a loss during the period.
The alleged corporate malfeasance, which can potentially open a can of worms around Unifreight Africa’s financial statements from 2014-2017 prepared by auditing firm Ernst Young (EY), is now subject to an investigation by the central bank, according to confidential emails seen by the Independent. Under the Exchange Control Act (Chapter22:05), it is a criminal offence for an individual to bank money earned in Zimbabwe outside the country.
Pioneer Transport was formed in 1999 by Simon and Hamish Rudland and was a flagship brand under Pioneer Corporation Africa Limited. The Rudlands, who have a significant stake in the entity, according to registration details of United Transport Freight Zimbabwe (UK), are resident in Zimbabwe.
In 2014, the transport group’s shareholder funds were recorded at £12 186 000, during which time the exchange rate stood at £1: US$1,55, translating to US$18 888 300, according to records filed by the UK Companies House under United Transport Zimbabwe Freight.
The emails were shared between RBZ governor John Mangudya and a whistle-blower in 2018 and early this year.
In the emails, Mangudya said the apex bank would institute an investigation into the allegations which have also been brought to the attention of the Securities Commission of Zimbabwe (SECZ) and the Institute of Chartered Accountants of Zimbabwe (Icaz)
In 2015, Unifreight Africa, according to financial reports compiled by EY and released in 2016, incurred a “loss of US$3 402 000 for the year ended December31, 2015,” resulting in Pioneer Transport being placed under judicial management. Then judicial manager, Wesly Sibanda was, among other tasks, assigned to scout for suitable partners to revitalise the moribund subsidiary, whose debt to various creditors stood at US$1,7 million.
At the time Pioneer Transport went bust, leading to placement under judicial management, the subsidiary was sold to Lamcent Capital Private Limited. The loss is reflected in the financial statements by EY, stretching from 2014 to 2016.
However during the time Pioneer Transport was reeling under mounting debts, compounded by a streak of losses, Unifreight Africa-part owned by Sarah Leigh Rudland and Hamish Rudland, allegedly spirited US$18 million into an offshore account in the UK, registered under United Transport Freight Zimbabwe.
According to allegations raised in the dossier, the money was moved into the offshore account without the knowledge of shareholders on the local bourse.
United Transport Zimbabwe Freight had a total asset value of £12 186, 000 (US$15 442,891) as at December 31, 2014 and the same figure as of December 2015, according to records filed by the Companies House. Curiously, at the end of 2017 the account only had £1 (US$1,27) only in its books of accounts with £9 204,045 million (US$11 663,629 million) moved to Chepstow Limited, a dormant company with registration number 04847603. The financial reports prepared by EY do not reflect the US$18 million allegedly stashed in the UK, although it is recorded in the UK books.
In the UK, the transport group’s unit is registered under the name United Zimbabwe Freight Transport registration number 02538541. The Companies House is the equivalent of Companies Registry in Zimbabwe, with the mandate to register company information, as well as making it available to the public.
In the UK, United Transport Zimbabwe Freight is domiciled at Wey Court West, Union Road, Farnham, Surrey, GU9 7PT and was incorporated by the Companies House on September 10, 1990. According to confidential emails between Mangudya and the whistleblower seen by the Independent, the Central bank boss committed to the informant to investigate the alleged corporate malfeasance by Unifreight Africa.
“Good evening and many thanks for the information. We are proceeding to institute investigations on the matter. Kind regards and Happy New Year,” Mangudya wrote back to the informant, in an email dated January 8, 2019.
The investigations by the RBZ are being handled by the institution’s Financial Intelligence Unit. At the time of going to print, Mangudya had not responded to questions sent to him around progress of the probe.
During the time at which the funds were allegedly moved into an offshore account in the UK, Lisbon Mhonda, now employed by Unifreight Africa as the group’s finance excutive director was in the employee of EY working towards attainment of his articles.
Sources say he was part of the team which audited the Unifreight books.
Mhonda, who confirmed having been engaged by EY did not respond to questions emailed to him. He referred questions to Unifreight Company secretary Moreblessing Mukamba.
Mukamba said : “For this information, I will direct that you get in touch with EY who were the employers of Lisbon Mhonda. I am of the belief that this is not a personal interview but rather a business interview, hence it will be prudent to verify the information given from the primary source. Lisbon Mhonda joined Unifreight with effect from 1st August 2016,”Mukamba said,after being quizzed on whether Mhonda was once employed by EY.
She added: “On the issue of the authenticity and verification of the signatures please contact EY Chartered Accounts as it is the firm that can provide you with such information. An audit is governed by ISAs and PAAB regulations and it was not a requirement for the audit opinion to bear the name of the partner signing the opinion. This came into effect in 2016 and if you do your research, you will find that it is only the audit opinions from 2016 (all this is available to the public) onwards that bear the names of the partner signing the opinion.”
Unifreight Africa chief executive Rob Kuipers after several meetings with the Independent, declined to speak on record.
EY managing partner David Gwande declined to take questions from the Independent, stating he was only answerable to Unifreight Africa’s shareholders.
Unifreight was originally formed in the UK in 1946 as United Transport Company, which was later acquired by British Electric Traction in 1971. In 1996,the British entity was bought out by which was, as a whole, bought out by Rentokil (UK) then subsequently acquired by locally-owned Pioneer Corporation Africa in 2011 in the form of a reverse listing.
Hamish Rudland acquired United Transport in 2013,becoming a director on May 14,2013 with Sarah Rudland also assuming directorship in the firm.