Mashonaland Holdings chief executive officer , Manfred Mahari,
LISTED property investment and development concern, Mashonaland Holdings Limited (Mashold), has suspended two top executives after an audit revealed that the firm could have been prejudiced of millions of dollars through financial irregularities.
Chief executive officer (CEO), Manfred Mahari, and Nodzo Matsangura, the finance director and company secretary, were suspended last week amid concerns over the manner loans and allowances were granted to staff.
The company’s internal auditors unearthed the irregularities, which were also confirmed by an external audit instituted by the company at the instigation of the board.
Ron Mutandagayi, chairman of the company’s board of directors, confirmed the suspension of Mahari and Matsangura.
“Both gentlemen are on suspension while the company is instituting disciplinary hearings following alleged irregularities unearthed by an internal audit,” Mutandagayi told the Financial Gazette this week.
“Subsequent to the internal audit, the board ordered a forensic audit, which seemed to confirm the initial allegations. It is important to bear in mind that, at this juncture, we are dealing with allegations and the pair is innocent until proven guilty,” said Mutandagayi.
Neither Mahari nor Matsangura could be reached for comment.
Mahari has served as CEO of Mashold since July 2008.
He holds a Masters of Business Administration degree in Goal Directed Project Management from the University of Zimbabwe, and a Bachelor of Science degree from the same institution.
He is a registered estate agent and an associate of the Chartered Institute of Arbitrators.
Matsangura has served as finance director since July 2008, having started as executive director of the company in August 2007. He also served as company secretary within the company between July 2007 and September 2007, and as acting CEO between August 2007 and July 2008.
He joined Mashold in July 2007 and holds a Masters of Business Administration degree, as well as ACMA, ACIS and AIOBZ.
In its financial results for the year to September 30, 2016, Mashold highlighted that because of the irregularities, the firm had provided for an impairment allowance of US$400 000 for unsecured staff loans.
The group reported a US$5,9 million loss for the year to September 2016, from a loss of US$6 million posted during the same period last year.
Revenue during the period under review was down seven percent to US$5,5 million, from US$5,9 million recorded in the comparable period. This was due to increasing void levels and declining rentals.
There has been an increase in property voids on the market, reflecting the unstable economic environment in the country.
An increasing number of tenants are finding it difficult to pay rentals due to the worsening liquidity crunch and joblessness, while others are re-negotiating existing contracts for downward rental reviews.
The business environment has been characterised by retrenchments, company closures, deflation and reduced aggregate demand.
A number of firms continued to downsize their lettable space thus putting pressure on revenues and occupancy levels. Consequently, property values declined.
The company, however, said new income streams were being developed to grow the revenue base.
The property market fundamentals remained weak, as occupancy levels and market rentals continued to decline, while arrears increased.
Arrears for the period closed at 31 percent from 28 percent in 2015.
Demand for space declined as companies rationalised their space requirements, resulting in occupancy levels falling to 74 percent during the period under review, from 76 percent in 2015.
Mutandagayi said the group would continue to focus on tenant retention and cost containment measures.
Due to the challenging market conditions, Mutandagayi said the group would seek land 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.
