HomeLocal NewsZupco in $6,4m debt

Zupco in $6,4m debt

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Zupco is reeling in a $6,4 million debt that it owes to institutions like NSSA, Zimra and Local Authorities.

Yesterday the parastatal’s board of directors appealed to Parliament to convince the government to assist in recapitalising it.

This was revealed to the Parliamentary Portfolio Committee on Local Government, Rural and Urban Development chaired by Chimanimani West MP, Lynette Karenyi, by the Zupco board chairperson Chipo Dyanda.

Dyanda denied the parastatal was insolvent even with its huge financial challenges.

“We have debts of $6,4 million owed to institutions such as NSSA, Zimra and Local Authorities, but our external auditors have said up to the period 2009, we are not yet insolvent and they are still to do books for 2010,” said Dyanda.

“We want the shareholder to help us recapitalise because the pace at which we are doing business is slow. We also want support from the shareholder to be able to repay retrenched workers as they have done with other parastatals facing problems.”

However, lawmakers in the Local Government committee felt there were a lot of irregularities in the manner the Zupco board had handled business in the parastatal, including issues to do with conflict of interest where some board members were also in management, as well as failure to manage the company’s business in 2009, which resulted in massive fall of profits.

MPs said the board was not practising good corporate governance when it appointed deputy board chairman Nelson Kangausaru as acting Zupco CEO since the current CEO, who is also former Local Government deputy minister, Morris Sakabuya, had been declared ill.

Dyanda said the appointment of Kangausaru as acting CEO had been done in accordance with the laws regulating the board.

“In 2009, Zupco had 400 buses and collected a revenue of $1,4 million, but within a year it was left with only 50 buses and revenue had fallen from $1,4 million to $200 000, with also a salary backlog of six months. Can you explain how that happened?”

Warren Park MP, Ellias Mudzuri quizzed the Zupco board. Dyanda said the buses were only doing a few trips and sanctions had affected business at Zupco, resulting in the losses.

MPs said it was morally wrong for Zupco to issue out payslips to employees when there was no money to pay them.

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