Council lose millions in dodgy operations

MOSES MATENGA

Harare lost millions of dollars that could have rehabilitated social amenities to a network of corrupt officials and politically connected cartels that have taken over Rufaro Marketing, investigations show.

Rufaro Marketing, a once-lucrative venture that financed crucial city projects, is a stark example of the rampant plunder, neglect, and corruption that has plagued Harare.

Millions of dollars generated by this entity have disappeared, leaving a trail of mismanagement and unaccounted funds.

Investigations by the Business Times in conjunction with Information for Development Trust (IDT), a non-profit organisation helping journalists produce investigative stories on corruption and bad governance, have established that, taking advantage of leakages due to porous council systems, the opposition Citizens Coalition for Change (CCC) party could also have benefited from the looted funds during the 2023 harmonised elections.

According to officials, Rufaro Marketing has been generating between US$35 000 and US$45 000 per month since 2022, totalling approximately US$500 000 annually. However, there is no documentation to substantiate how these funds have been utilized.

Several critical documents, it emerged, have gone missing over the years, raising suspicion officials and cartels sold some of the Rufaro Marketing property and benefited from the proceeds.

Cartels

Investigations show that a cartel comprising both ruling Zanu PF party aligned activists, opposition senior officials, councillors and council officials are involved in the illegal letting and subletting of Rufaro Marketing facilities across the city.

A visit to Zororo Bar in Mbare owned by Rufaro Marketing revealed a lot of underhand dealings and a complex web of dealers who “make it happen.”

Posing as a potential tenant to one of the facilities, this reporter engaged with officials from Rufaro Marketing offices at the Remembrance building in Mbare.

According to one of the operators running a shop at Zororo Bar, it is difficult to go directly to Rufaro Marketing officials to facilitate a place to operate from hence the involvement of go-betweens.

The operator said to facilitate “a discussion” there was need for “something”—meaning a bribe—for a dealer only identified as Maxwell who has links to a Rufaro Marketing official, Nyasha Jongwe, who is employed as Operations Manager for the council-owned entity.

Jongwe is based at the Rufaro Marketing head office at Remembrance House in Mbare.

After the visit, the reporter got several calls as follow up to his interest on securing space to run a bar and in one of the calls, the caller, one of the business owners at Zororo Bar outlet, was in the presence of Maxwell, whose full identity and role could not be immediately established.

In the recorded conversation, Maxwell kept on inquiring whether this reporter was serious and promised to facilitate a meeting with another official only identified as Chikwariro, who described himself as a finance point person at Rufaro Marketing.

Though his first name could not be immediately established, Business Times spoke to Chikwariro on allegations he was part of a bigger cartel contributing to financial mismanagement at Rufaro Marketing.

A visit to Chikwariro’ offices revealed the modus operandi where nothing moves without money.

Pressed to speak on his role at Rufaro Marketing and accusations he was involved in corrupt activities there, Chikwariro said: “My duty is simply to receive money. I don’t handle operations because there are others tasked with that. My responsibility is to manage financial transactions and make payments and I have been in this role for years,” he said.

Initially, Chikwariro had told the then undercover news team that they would get “something” if they pay for a prime spot.

“There is nothing yet unless you’re willing to pay for a prime spot (Mbare and Highfields.) Rentals vary but they remain fairly consistent across the high-density suburbs.”

Maxwell, who led the news team to Chikwariro said: “Are you truly serious about this opportunity? If you are interested in this area, you need to pay a fee that we can negotiate among ourselves.”

It emerged the dealers were not only there to facilitate acquisition of facilities at Rufaro Marketing but form part of larger scheme to facilitate council deals from Remembrance which also houses the Housing department.

The dealers are also involved in housing deals where they get paid to facilitate home seekers to have waiting list cards back-dated for them to qualify for allocation of residential or commercial stands.

During the investigation, it also emerged that former Mbare Constituency Member of Parliament, Starman Chamisa, brother to former Citizens Coalition for Change (CCC) leader Nelson Chamisa was pushing to take over control of Zororo Bar using his political muscle.

It emerged Chamisa tried to use opposition councillors and his political influence in Mbare then to wrestle out some tenants renting facilities at the council-owned outlet.

Those he reportedly tried to bully out of the facility confirmed his involvement in trying to grab the facility adding that he is still pursuing the taking over.

Chamisa however, refused to comment, saying: “I don’t have time for interviews. Don’t waste my time. I will respond when it’s convenient for me.” This response suggested an effort to obscure his questionable practices.

Zororo Bar is now home to a private college with classes from ECD to Advanced level.

Sources said the school pays more than US$1,000 to Rufaro Marketing through Chikwariro.

Those who operate some of the businesses were initially hesitant to entertain the news team saying: “A lot of investigations are happening. That’s why I can’t assist you.”

This was in apparent reference to the Commission of Inquiry set up by President Emmerson Mnangagwa that has exposed the Rufaro Marketing rot.

Last year, President Emmerson Mnangagwa appointed a Commission of Inquiry chaired by retired Judge Justice Mathias Cheda to probe suspected cases of financial mismanagement in Harare since 2017.

The commission has so far received testimonies from several actors within the local authority all pointing to possible looting of council-owned facilities including Rufaro Marketing.

This investigation also led this reporter to another Rufaro Marketing owned facility in Mabvuku called Hunters.

Others who have since benefitted from the chaos at Rufaro Marketing are Mabvuku Ward 21 councillor Alexio Nyakudya who is said to be benefitting from Hunters Bar in Mabvuku.

Nyakudya was awarded the bar without any reference process and his issue was.

One of the employees at the facility mentioned Jongwe, whose name also featured prominently in Mbare, as the key man in case one wants something from Rufaro Marketing.

The employee, a bartender said they pay US$1000 monthly to Rufaro Marketing but the rental is paid through Jongwe.

He said in the area, those who want space can talk to a local businessman only identified as Mannex who runs a number of tuckshops in the area.

The news team went to see Mannex who expressed that he was eager to assist due to his strong connections with Jongwe.

Mannex refused to disclose his full name and links with Rufaro Marketing during the investigation.

He however said that Rufaro Marketing has bars in Manresa, a middle density suburb in northern Harare, and access to these venues requires financial backing.

He said grocery stores and beer outlets are charged between US$250 and US$350, depending on the size of the property, and there are 20 of them, bringing the cumulative rental to US$7 000 a month.

The money, the investigation established, is not remitted to council but is directed to members of the cartel that involves officials from Remembrance House in Mbare and their runners.

Missing records fuel looting suspicion

According to a report by a special committee on the operations of Rufaro Marketing in 2019, no critical documents including minutes of AGMs and EGMs were availed hence no clear picture of the state of affairs at the company was painted raising suspicion of looting and efforts to conceal illegal activities.

“The Committee was not favoured with minutes of any AGM or EGM 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. A failure to hold the mandatory AGMs would be in violation of the Articles of Association of the company and the Companies Act (Chapter 24 :03),” the report reads in part.

The committee was not provided with any minutes of meetings of the previous boards.

Former Rufaro Marketing Chief Executive Officer, Daniel Mutiwadirwa, confirmed the chaotic records system amid accusations and counter-accusations.

“They destroyed documents,” Mutiwadirwa claimed.

“They claim I have documents but they communicated my suspension electronically. So how could I have taken those documents? It was a designed chaos in order to loot,” he added referring to the missing documents.

Among the missing documents are some lease agreements between Rufaro Marketing and some tenants making it difficult to establish how much those renting premises were paying and in which currency.

This has raised suspicion that officials were collecting rentals in United States dollars and only remitting it in local currency prejudicing Rufaro Marketing in the process.

Harare Mayor Jacob Mafume, confirmed the missing critical documents saying: “There was no record of Rufaro Marketing. He (Mutiwadirwa) conspired to sell three bars and he was stopped.”

CCC election funding claims

Mutiwadirwa claimed he fell out of favour with the opposition dominated council because he resisted moves to fund the August 2023 election campaign for the Nelson Chamisa-led opposition outfit.

“They were saying CCC doesn’t have money and needed money for elections,” he said.

“I was introduced to CCC leaders and had meetings with so many of them including Amos Chibaya (interim organising secretary), and what was left was to meet their (former) party president (Nelson Chamisa) but I resisted,” he said.

Chibaya, however, denied ever meeting Mutiwadirwa.

“After one of the meetings, Mafume was angry. He said he wanted the Rufaro Machipisa outlet. He forced me to find escape clauses to do away with a person who was there,” the former CEO said.

 “They warned I could only remain CEO if I complied with their demands.”

Mafume denied the allegations.

“I met him (Mutiwadirwa) once or twice the entire time. How could a non-performing company finance anything?” he asked.

But Mutiwadirwa insisted that he was forced out to pave way for perennial opposition fundraisers Juma Ulete and Ngoni Chimbalu who are now full-time directors at Rufaro Marketing.

A quick search on the two’s background shows that they have over the years been at the forefront of mobilising resources for the opposition activities with the latest being for the purchase of a bulletproof vehicle for Chamisa.

The funds remain marred in controversy as no vehicle was delivered.

Ulete and Chimbalu are known opposition activists who have been active in fundraising for the party since days of the late former MDC-T leader Morgan Tsvangirai.

“The two directors are running the company and there is no corporate governance because a non-executive is taking over an executive role,” he said.

Chimbalu and Ulete were also named at the ongoing commission of inquiry with the commission chairperson Justice Maphios Cheda accusing them of creating looting avenues that also involve councillors and officials who are reportedly running businesses at the facilities.

Chimbalu refused to comment on the accusations.

Justice Cheda also alleged that Rufaro Marketing was mobilising funds for the Citizens Coalition for Change (CCC) party.

“The money is going into their own pockets. Since 2022, there are no remittances that have been paid,” Justice Cheda said.

“They are not meeting the responsibilities of council.”

“We have a video of Hunters Bar and we are going to show you how these bars have dilapidated alongside Kuwadzana shopping centres and the 30 tuckshops that you have leased in your names,” he was quoted as saying during the inquiries.

Pressed on why he appointed board members to executive positions against principles of corporate governance, Mafume said: “What did the former CEO (Mutiwadirwa) do? (With Ulete), it has been from zero to refurbishing Rufaro Marketing headquarters. Rufaro Stadium was also refurbished using proceeds from Rufaro Marketing.”

“They (new management) are actually doing far better than the previous CEO but they are facing resistance from tenants who have turned bars into tuckshops, using political muscle and influence. Some are refusing to pay rentals.”

Documents gleaned as part of the investigations that include a 2019 Audit Committee report showed that most of the facilities were in dire need of maintenance as they have lost shape.

The documents, supported by observations show that all facilities are in need of substantial maintenance.

The report shows “significant underutilisation” of the vast land housing the Rufaro Marketing outlets.

Incidences of land invasions was also noticed at Hunters Tavern in Mabvuku, according to the report by the committee.

“The committee noticed underutilisation of the vast land housing the outlets. Sub economic rentals are being charged as the committee noticed that stalls were being sublet for at least US$60 each while Rufaro Marketing is paid an average of ZWG3000 per outlet. Eleven stalls averaging USD$660 at Hunters in Mabvuku are being sublet by a Rufaro Marketing tenant.

“Rufaro marketing receives a meagre ZWG3000 (US$250) which is the equivalence of just  two stalls. The committee noted that more

value can be tapped out of the properties. In addition, the rampant subletting, which does not benefit Rufaro Marketing must be stopped, even if it means considering having direct relationships with the sub-lessees.”

It emerged despite the recommendations, the subletting still continues.

Documents prove cases of subletting involving political actors was rampant.

Recently TN Holdings, Rufaro Marketing and a Zanu PF senior official Emmanuel Mahachi fought in court over Mahachi’s subletting and decimation of council property to erect illegal structures like tuckshops at the Vito Complex in Mbare.

“It is declared that the respondent does not have any authority to sub-lease Vito Complex, construct and build tuck-shops, modify or demolish the existing and approved buildings comprising Vito Complex,” the ruling reads in part.

Vito Complex is a Rufaro Marketing owned facility in the populous Mbare suburb and has been a battleground for fights over control.

While political actors fight to control Vito Complex, council remain the biggest loser as nothing was being remitted to them.

“Consequently, the respondent and all those acting through him or under his instructions are ordered to demolish all structures that were erected on or after 8 February 2019 within twenty-four (24) hours of this order failing which, the applicants, with the assistance of the City of Harare are authorised to demolish such illegal structures.”

Despite a clear order, Zanu PF elements continue operating from Vito Complex and recently, lawmakers from the Public Accounts Committee (PAC) chaired by Kuwadzana Member of Parliament Chalton Hwende were forced to abort a fact finding mission in Mbare at the complex after they were mobbed by Zanu PF activists with one of them brandishing a firearm.

Board chairperson Warren Chiwawa confirmed some political elements were giving the company hell but warned that action will be taken.

“We have politicians occupying some of our properties but we have impressed upon the politicians that this is not politics but commerce so we should have a win-win situation,” Chiwawa said.

“There has been resistance from politicians but I think some of them are now coming to the realization that it is in their best interest to work with us because if they resist us on the basis of politics, we will simply take them to court and evict them.”

Residents speak on Rufaro Marketing drama

Reuben Akili, Combined Harare Residents Association (CHRA) Director said: “Over years, you actually see that there hasn’t been meaningful contribution from Rufaro Marketing remittances to the revenue inflows for the local authority,” Akili said.

“Rufaro Marketing would in the past finance council run infectious diseases hospitals in terms of rehabilitation and would even contribute to social amenities, rehabilitation of key infrastructure but you realize because there have been no remittances, this has seriously impacted on the conditions of our social services,” Akili said.

“If you go to Tafara, the situation is unacceptable. If you go to Mufakose, all those social services, they are collapsing. Even if go to Gwanzura Stadium, its collapsing and the funds for Rufaro Marketing were contributing towards the development of such infrastructure and even social services,” he added.

He said an audit on Rufaro Marketing was critical.

“Some facilities were sold under unclear circumstances which qualifies as fraud because it remains public property.”

“We feel that the local authority has been prejudiced of millions of dollars,” he said.

Deteriorating infrastructure

Observations show that a number of facilities have been run down.

Documents also support the collapsing infrastructure.

In Mbare, the facilities including Vito Complex are now an eyesore with unplanned tuckshops where officials also suspect are the hub of drug peddling.

In Highfields, the facility is now populated raising fears of disease outbreaks because the ablution facilities are in most cases not working.

A committee set up in 2019 to probe the Rufaro Marketing case and was chaired by Ian Makone revealed gross irregularities including opaque selling of facilities and missing funds.

“In his verbal submission to the Committee the Acting Finance Director revealed outlets at Chitubu, Nenyere and Island Bar had been sold based on an internal valuation. Authority for the sale was not confirmed. The Committee considers that in line with its overall findings better candidates for disposal would have been Vito Red Room in Mbare and Gazaland,” the report reads in part.

Board chairman Chiwawa however said there is now stability at Rufaro Marketing after years of turbulence.

“There has been resistance of course but we have taken some of the tenants to court. We have also made sure the new contracts have clauses favorable to council and the board. Those who have been resisting, we have taken them to court and we wait for the processes to be finalized.”

 “We have recommended a forensic audit to determine the extent which council has lost revenue in the past. Once the shareholder approves our recommendation, we will start the process of a forensic audit.”