Harare mayor Jacob Mafume says the local authority will investigate how some of its assets were included in Victoria Falls Stock Exchange (VFEX) listed West Properties’ portfolio with council’s approval.
WestProp, which listed on the VFEX in April amid controversy over outstanding court cases, morphed from the Ken Sharpe-owned Augur Investments.
Augur Investments acquired vast tracts of land from Harare City Council (HCC) as payment for the incomplete Harare Airport Road project.
Augur also formed a joint venture with council known as Sunshine Property Development and the entity was given vast tracts of land in the capital, which is now listed on the VFEX without the local authority’s involvement.
Under the joint venture agreement, Augur controls 70% of the shares and was supposed to provide capital for Sunshine’s projects.
Council, on the other hand, was supposed to provide land for developmental projects and control 30% shareholding.
Mafume said council should have been informed about the listing of the Sunshine assets as part of WestProp’s portfolio.
“As we speak, this has not been discussed by any of our committees,” he said.
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“This is something that council had to be informed of because those properties are still the properties of council.
“We have a stake in Sunshine and there are many condition precedents that have to be fulfilled before anything happens and we certainly will ask the town clerk and our representatives in those boards to see whether they is communications that come to council and have not been brought to the attention of the full council.”
Mafume said he would ask the town clerk to check if council’s interests were being safeguarded in the Sunshine deal.
“If not, we will then be taking advice from our legal practitioners as to how we can protect the interest of the council and the residents,” he said.
The mayor also said he was not aware if council had a stake in WestProp.
“We are not aware, we certainly did not seek the endorsement o the council,” Mafume said.
“We have processes under the Zimbabwe Investment Development Agency that we have to follow.
“There are quite a number of hurdles that a public entity has to cross over and most importantly, we have to consult the residents as to whether they want to be tied up in such a setup.
“Certainly, I would have expected the representatives in the (Sunshine) board to have informed us.”
He added: “It is a subsidiary duty as councillors to protect the interest of council and we will embrace all the options that we have as a council to defend the interest of council.
“Should the advice lead us in that (VFSE listing) we will exercise all options as advised by our legal practitioners, and chamber secretary department to make sure that the interest of residents is not entangled in areas that will not add value to the residents nor interests where they that have not been consulted.”
Council last month refused to ask questions related to the transfer of land to Augur Investments in the Sunshine deal saying the information was related to cases before the courts.
Inquiries, however, revealed that there were no cases involving Sunshine before the courts.
The questions sought to establish the circumstances in which the joint venture was established to form Sunshine in 2007.
In March WestProp published a prospectus to list on the VFEX where Warren Hills Property and other properties owned by Sunshine were included in its property portfolio and subsequently listed on the United States dollar-denominated bourse.