THE struggling Harare City Council (HCC) has lost potential revenue running into millions of United States dollars in more than 15 years in a calculated move to plunder resources at its subsidiary Rufaro Marketing by senior officials, investigations by NewsDay has established.
At its peak, Rufaro Marketing was one of the city’s cash cows, injecting thousands of dollars into council coffers which were used to build Rufaro Stadium and several amenities in high-density suburbs.
It also employed more than 1 500 people at its brewery and 157 beerhalls dotted across the city.
After it disposed of some of its assets, the once flourishing company ventured into real estate with 86 of its bars being leased to tenants.
However, rentals collected from tenants did not reach HCC coffers, the sole shareholder for 10 years.
Former Rufaro Marketing chief executive officer Daniel Mutiwadirwa told NewsDay that the company did not remit any funds to HCC for years, citing debit payment as the cause.
“Rufaro Marketing had a lot of debt, we were settling the debt for 10 years and we could not remit any money to council,” he said.
Investigations by NewsDay revealed high ranking officials at the company connived with tenants where they would partition and sublet the premises charging rentals in United States dollars, while Rufaro Marketing was paid very little in local currency.
A special report compiled by Harare City Council business committee in possession of NewsDay showed that there was serious misgovernance at the institution which led to massive looting.
“Eleven stalls averaging US$660 at Hunters in Mabvuku were being sublet by a Rufaro Marketing tenant. Rufaro Marketing received a meagre ZWL$3 000 which is the equivalent of just two stalls,” the report noted.
It also emerged that the tenant in question is Citizens Coalition for Change Mabvuku councillor Alexio Nyakudya, raising issues of conflict of interests.
“Yes, I had the lease from 2017. I have been sub-leasing because the lease is silent on subletting,” he said.
Rufaro Marketing new director for operations Juma Ulete admitted that money was converted for personal use by the former management.
“We don’t know how money has been used for close to 10 years by the fired CEO Daniel Mutiwadirwa and we are now going for a forensic audit. Rufaro Marketing had no audit in the last 15 years and we had the first one recently,” he said.
“When we took over, there was a single employee called Mutiwadirwa who used to go around collecting money, cash in a car boot, now we have a functional bank account.
“There was no remittance or any money going to council for 9 years, but from last year to today, we have directed funds close to US$400 000 to council through direct cash remittance and works at Rufaro Stadium and instructed by a full council resolution.”
Harare mayor Jacob Mafume said the special committee recommended to fire Mutiwadirwa after realising that council had lost millions of dollars in potential revenue.
“The committee has notable difficulty in engaging and meeting with the CEO of Rufaro Marketing. He evaded co-operation with the committee in providing key comments, evidence to support the work of the committee,” Mafume said.
The former chief executive allegedly did not call for annual general meetings for more than 10 years as stipulated by the company’s articles of association.
“The committee was not favoured with minutes of any AGM [annual general meeting] or EGM [extraordinary general meeting] of Rufaro Marketing over the years especially for the years leading to the decision to liquidate the company in September 2012 and the years following the decision to liquidate the company,” the report read.
Mutiwadirwa refuted the allegations saying the board which fired him was not properly constituted.