Debt-ridden Zimbabwe Football Association (Zifa) is set to lose hundreds of thousands of dollars in on-going cases against its creditors and former workers as the football mother body’s debtor book continues to balloon.
By XOLISANI NCUBE
A report from external auditors, Baker Tilly Chartered Accountants for the year 2016, says the Philip Chiyangwa-led executive has less prospects of winning a number of labour cases it has with ex-workers and creditors.
The auditors said this could cripple the cash-strapped association, which is already saddled with a ballooning debt and facing allegations of mismanagement and poor corporate governance.
Among the cases that auditors said the association would lose is a legal battle with former CEO, Jonathan Mashingaidze, who is said to be owed $116 744, among many others.
“Zifa is opposing the figure claimed, saying they only owe $85 338,81. A decision from the labour officer is expected imminently. There are low prospects of success in this matter,” read part of the audit report.
The report also said Zifa risked losing its legal battle against Lazarus Riva, who wants to be paid $23 078 after he won a judgement and had almost garnished the association’s bank accounts until a deal was reached that he would be paid in instalments — a deal which the association, however, defaulted on.
“Zifa lawyers have opposed the application. However, there are very low prospects of success in the matter,” the auditors said. The report suggested that Zifa under Chiyangwa increased its debts by $854 902 within 12 months — contrary to claims that since 2015 when he took over, no debt had been incurred.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
The audit report states that in 2015, Zifa’s liabilities stood at $5 089 754 and had, by December 31 2016, grown to $5 944 656. Another case the auditors said the association would lose is the legal battle against Travel Bureau, a travel agent engaged by Zifa and was owed $27 870 and had a garnish order granted in default. The auditors said while the association had high prospects to fight for the reversal of the garnish order, it was bound to lose the claim case.
Zifa is said to be in debt to the amount of $5 944 656, a figure Chiyangwa had promised to deal with when he assumed office.
But instead, the association has increased its liability after it got a fresh loan of $1,2 million from Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) between 2016 and 2017.
The loan has an interest rate of 5% and $225 000 was due by September 2017. But to date, no cent has been paid back of the money borrowed to fund the 2017 Africa Cup of Nations senior men’s national team qualifiers campaign.
A further $1 million was borrowed in 2017 to bankroll the participation at the soccer fiesta but nothing has been paid back and all the while, the interest rate continues to balloon.
The auditors said with better management and funding from government and other stakeholders, Zifa had a chance to survive but listed numerous challenges that would militate against its going concern.
“The association has total liabilities exceeding total assets by $5 944 656. Note 18 describes the challenges being faced by the association that indicate the existence of material uncertainty, which may cast significant doubt on the association’s ability to continue as a going concern,” read the report.
The $5 9444 656 did not include the $1 million loan from Potraz accessed in January 2017 which was not included in the 2016 audit report.
This comes as Chiyangwa, through his investment vehicle Kilima Investment and those linked to him, had reportedly pocketed $139 500 by December 31 2016 in rentals and renovation of Zifa Village by Hansporte Investments — a company run by Marshal Jonga, who is an employee at Kilima Investments.
The $139 500 is exclusive of the $72 000 paid to Kilima as rentals for the year 2017 and another $72 000 paid for 2018.
“We draw attention to the fact that at 31 December 2016, the association incurred a consolidated net loss of $854 902 and had accumulated losses of $7 353 324 ( 2015: $6 541 897). The group’s total liabilities exceed total assets by $5 944 656,” the report stated.
“The association has not been able to pay its creditors, including statutory payments, when due. There are pending legal proceedings against the association that may, if successful, result in claims that the association is unlikely to satisfy,” the audit report further stated.
The audit said Zifa hopes to get $750 000 from Fifa, a fund it wants to use in its resuscitation efforts.
