admindissolution of the firm that faces collapse owing to alleged mismanagement.
Zexcom has 7 000 shareholders, all of them war veterans.
The freedom fighters came together under the leadership of the late national hero Dr Chenjerai Hunzvi and pooled their resources together after getting Z$50 000 gratuity each from Government.
Zexcom’s assets are now valued at over US$2 million.
Zexcom had invested in various sectors of the economy to enhance the future earnings of war veterans’ and their dependants.
The investments were in the form of properties and included shareholding in various local companies such as Delta, Econet, Kingdom Bank and Telecel.
In Harare, properties owned by Zexcom include Equity House, a seven-storey building that generates about US$13 000 in rentals monthly.
It owns another building in Bulawayo and a commercial complex in Murehwa.
The disgruntled shareholders claim many other properties were being kept under cover and were benefiting individuals. They claim that their investments have now gone down the drain.
An audit carried out on the company by Masdam Investments (Pvt) Ltd blamed the situation on gross mismanagement by the 17-member board. Zexcom board chairman, Cde Moffat Marashwa, declined to comment last week.
“The board is sitting on Friday and we will then produce a detailed report on the company. In the meantime, do not write anything about the issue,” he said.
According to the audit report, Zexcom is operating without any financial books making, it impossible for management and the board to ascertain its operations.
“The company is operating at a loss due to uncontrolled spending and poor management of income. For the audited six months, total recurrent and overhead expenditure exceeded income by 101 percent. Rental income from Harare and Bulawayo are in arrears by 42 percent.
“There is virtually no cost management principles in place, costs are left unchecked. Sixty-five percent of the costs relate to expenses benefiting staff and most worrying is the fact that some of the costs are being engineered to benefit certain individuals.”
The shareholder register is outdated, Zexcom is operating without a financial budget and there are no staff records, the report noted.
“There is a culture of uncontrolled spending which is now threatening the viability of the company,” it added.
The auditors said payments were being made without any invoices or receipts, while cash was not reconciled to any record but kept by the administrator.
The report recommended a full inventory of the company’s assets, while noting that besides putting properties like Equity House to effective use, they were in a bad state because of lack of repairs.
The auditor noted that Zexcom’s biggest threat was shareholder dissatisfaction due to the company’s poor performance.
Last month, the dissatisfied shareholders wrote to President Mugabe, Cde Patrick Chinamasa (in his capacity as Minister Justice and Legal Affairs) and the Attorney General seeking their intervention.
Reads part of the letter dated September 13 2011: “The board of directors began to mismanage the company and alleviated millions of dollars into their personal accounts and could not be accounted for. Company assets were purchased, movable and immovable, some were registered in their names. Some of the shareholders received a dividend once at the end of 1999 and never received any other payments to date.”
Online Reporter