Auditors unearth internal loan scandal at Mash Holdings

Property concern, Mashonaland Holdings, is mulling taking legal action after internal and external auditors unearthed irregularities in the granting of staff loans and allowances.

BY BUSINESS REPORTER

Mashonaland Holdings board chairperson, Ron Mutandagayi
Mashonaland Holdings board chairperson, Ron Mutandagayi

In a statement accompanying the company’s financial results for the full year ended September 30, board chairperson, Ron Mutandagayi said internal and external auditors noted irregularities in the granting of loans and allowances and the board resolved to carry out an investigation appointing auditing firm KPMG to do the task.

“The board is considering the final report on the agreed upon procedures and will institute legal proceedings it considers necessary to resolve and address any irregularities noted,” he said.

“The group has provided for an impairment allowance of $400 000 for unsecured staff loans in the financial statement.”

In the period under review, revenue was down 7% to $5,5 million from $5,9 million recorded in the comparable year due to increasing void levels and declining rentals. Mutandagayi, however, said new income streams
were being developed to grow the revenue base. He said property market fundamentals remained weak, as occupancy levels and market rentals continued to decline, while arrears increased. In the period under review, arrears for the year closed at 31% from 28% in 2015.

Mutandagayi said demand for space declined as companies rationalise their space requirements resulting in occupancy levels falling to 74% during the period under review from 76% in 2015. He said the group would continue to focus on tenant retention and cost containment measures.

In the outlook, Mutandagayi said the group would continue seeking development opportunities supported by stable strategic partners in key market segments.

“This strategy will be underpinned by unlocking value on existing and new land banks. The implementation of these strategic initiatives will strengthen the business through aligning the portfolio to evolving market needs,” he said.

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