THE top brass at haemorrhaging retail giant, OK Zimbabwe Limited (OKZL), duplicated the procurement of vehicles for its flagship OK Grand Challenge in 2024, forcing the business to absorb over half a million United States dollars in unplanned expenditure, fresh details emerged.
The blunder meant OK bought 62 vehicles instead of 31, effectively doubling procurement due to an administrative breakdown. A report exclusively obtained by the Zimbabwe Independent showed the bungle worsened working capital pressures at a time the retailer was battling tight cashflows, currency volatility and rising arrears.
Insiders described the incident as one of the most startling governance failures in a listed company. It forms part of a broader chain of missteps that plunged OK into administration in February.
Documents showed the mix-up occurred while the business battled severe financial strain, with plummeting revenues and weakening supplier confidence.
A market analyst questioned how a company with over three decades’ experience running the OK Grand Challenge could commit such an error.
Corporate rescue practitioner Bulisa Mbano, who is leading the turnaround effort, confirmed the gravity of the transaction.
“You would have killed the business,” Mbano told the Independent.
In a report presented to creditors owed millions of dollars, Mbano identified the duplication as one of several factors behind the retailer’s near collapse.
- OK Zim ignites Christmas is Here promotion
- OK Zim finalises Food Lovers acquisition
- 600 to win prizes in Bon Marche promotion
- OK Zimbabwe targets volumes growth
Keep Reading
“OKZL purchased 31 OK Grand Challenge promotion cars in duplicate in 2024, with the company absorbing the cost of US$560 000 for the extra cars,” the report noted.
The vehicles were later redeployed into operations, but only after inflicting significant financial damage.
“They were allocated to staff. They were deployed for operations, but it is now a cash flow issue,” Mbano said.
The incident forms part of a wider pattern of operational and strategic failures that accelerated OK’s decline over the past two years.
The report showed working capital — critical for day-to-day operations — was diverted into investments that failed to generate returns.
These included US$5 million injected into Food Lovers Market, US$3 million into a Bon Marché store in Marondera, and US$800 000 into Alowell Pharmacies.
“Subsequent to setting up, working capital amounting to US$893 143 was injected into these investments, but no returns were realised. These investments were subsequently closed,” the report said.
Further pressures came from asset disposals that failed to deliver relief.
Proceeds from the sale of Stand 5950 were used to settle bank guarantees extended to three suppliers, yet only one resumed deliveries after the guarantees were cleared.
Other properties were mortgaged as security for bank loans, the report said. Although they were sold for US$3,8 million, US$2,6 million was immediately offset against outstanding borrowings.
In another deal, OK received US$1,825 million, but part of the funds remains locked pending clearance of capital gains tax by the Zimbabwe Revenue Authority.
“We are currently engaged with Zimra as these funds are urgently needed as working capital to kick-start operations,” the report said.
Ahead of the 2024 OK Grand Challenge — which ran from April 3 to June 8 — the company secured supplies priced in United States dollars but payable in either US dollars or the Zimbabwe Gold (ZiG).
However, most revenues were collected in ZiG. When the currency depreciated sharply later in the year, the value of those balances was severely eroded.
“In September 2024, the exchange rate rose from ZiG14 to over ZiG24,38 per US dollar in the official market. This resulted in a significant erosion of purchasing power given OKZL’s ZiG balances,” the report said.
The depreciation triggered a liquidity crunch that crippled the company’s ability to meet its obligations.
“Constrained cash flows resulted in the non-payment of suppliers and service providers, with several suppliers remaining unpaid for goods and services delivered during 2024,” the report noted.
As confidence weakened, suppliers began scaling back or suspending deliveries.
“This led to a deterioration in supplier relationships, causing many key suppliers to suspend or cease supplies to the business,” the report said.
The disruptions quickly translated into stock shortages, operational constraints and declining revenues.
Monthly revenue plunged from US$21,7 million in January 2024 to US$7,5 million in January 2025, before collapsing further to US$1,3 million by January 2026. Operational inefficiencies compounded the crisis.
The report found that centralised procurement systems were failing, resulting in goods being sourced at uncompetitive prices and in incorrect quantities, tying up capital in slow-moving stock.
Inventory losses surged, with the company writing off US$2,6 million in the 2026 financial year.
Despite falling revenues, OK struggled to reduce its cost base. Fixed overheads — including management salaries, utilities, insurance and statutory obligations — remained high, according to the report.
Mbano said the decisions that contributed to the collapse were collectively approved, but proved disastrous.
“So, it is a combination of things,” he told the Independent.
“Are they criminal? I think the board will probably have to deal with that, but they were all sanctioned,” he said.
“People sat down and agreed to do them, but then those ventures failed. There are many factors that can cause a business to fail that are not necessarily fraudulent.”
He added that a formal investigation into the company’s affairs would now be undertaken.
“An investigation and examination of the affairs of the company pursuant to Section 134 of the Insolvency Act (Chapter 6:07) (will be instituted),” Mbano said in the report.
Despite the scale of the collapse, Mbano expressed cautious optimism about the retailer’s prospects.
“Our preoccupation was to convince creditors that OK, as a business model, makes sense — it is just that other issues distracted management,” he said.
However, he warned that rebuilding the business would require significant capital and the restoration of strained supplier relationships.
“It is promising that the company is going to be turned around, but it will take hard work because suppliers were really affected. They are not happy — far from happy,” Mbano said.
Once one of Zimbabwe’s dominant retail chains, OK has in recent years struggled to compete against informal traders and smaller retailers better able to navigate the country’s volatile currency environment.
The revelations paint a picture of a company brought down by a cascade of governance failures, poor investment decisions and operational inefficiencies — capped by a costly procurement blunder that nearly pushed the retailer over the edge.
