ZHE property under the hammer for salaries

Innocent Selatlhwa | Friday April 5, 2019 12:59

The company will have a delivery van, a delivery combi, a fridge and a steel filling cabinet auctioned in order to raise P203,680 towards payment of employee salary arrears.

The Industrial Court Registrar on February 7, 2019 issued a writ of execution directing the deputy sheriff to attach and take into execution the movable property of ZHE and that of its two directors Joel Baitse and Ronny Mojadife.

This came after the Commissioner of Labour awarded the aforesaid default award on December 10, 2018. The company failed to pay salaries on January 10, 2019 as had been ordered.

Ten employees had reported the company to the Department of Labour after it failed to pay them salaries between late 2017 and 2018.

The employee owed the most money is Thuso Mahangwe, who will pocket P48,000.

A draft report on the status of ZHE prepared for BOSETU has unearthed gross maladministration in actions between the union and the company.

ZHE is a logistics company, which is now on its knees despite BOSETU having injected at least P30 million in it.

BOSETU last year engaged Pashur Investments to carry out an audit on the company it had bought a 25% stake in three years ago. They wanted the auditors to undertake a review of the current status of business, determine future prospects of business success and whether it would be worthy to continue investing in it.

The audit report states that the valuation figure was based on projections, which were unrealistically high compared to those used during the company’s launch and the first financial statements, and are far from the current accruals.

The auditors found that there had been poor financial management and control over expenditure characterised by lavish spending without prioritisation and due consideration of value for money resulting in lack of working capital, which is crippling the business.

“There has been poor control over cash with no defined petty cash limit resulting in withdrawals ranging between P10,000 and P60,000 under this classification.

“We could not be furnished with documents to prove usage of the money and these remain unaccounted for.

One employee who has since left the company obtained over P959,400 from October 2016 to June 2017 without accounting for it.

The auditors also bemoaned that significant amounts were spent on marketing and branding, which raised eyebrows as to whether or not the amounts were spent as purported.

“The rates at which service providers charged the company were exorbitant in many cases, which raises suspicion of collusion with intent to siphon BOSETU money through ZHE,” noted the auditors.