Air Zim fails to submit financials in 8 years

Source: Air Zim fails to submit financials in 8 years – DailyNews Live

22 March 2017

HARARE – State-owned Air Zimbabwe (Air Zim) has failed to fulfil the
obligation to submit financial statements for audit for the past eight
years.

The insolvent airline – grappling with $300 million in debt – is currently
working on the 2010 financial statements, according to the office of the
Auditor-General (AG).

The primary objective of an audit is to express an opinion on the set of
accounts audited.

“Its accounts were not submitted for audit, again,” said a damning report
by the Office of the AG on parastatals and State enterprises tabled in the
National Assembly last week.

“Air Zimbabwe and its subsidiaries’ audits in progress and being finalised
are for the year 2010.”

Chapter 22:19 of the Public Finance Management Act requires all accounts
of parastatals to be made up yearly to the end of the financial year.

These accounts are to be made up no later than 30 days post-yearend to
which they are related, for auditing by the AG soon after.

Despite this legal requirement, Air Zimbabwe is in violation for late
lodgement of annual records during an eight-year period from 2009, it was
disclosed in the AG report first handed to Finance minister Patrick
Chinamasa by swashbuckling AG Mildred Chiri.

The responsibility of submitting financial statements for the loss-making
carrier lies solely with the chief executive Ripton Muzenda and the
airline’s chief operations officer (COO) Simba Chikoore – who is also
President Robert Mugabe’s son-in-law.

Air Zim appointed Muzenda as its new CEO with effect from August 15 last
year, taking over from Edmund Makona who has been acting CEO since 2013.

Chikoore, who is said to be a qualified pilot and is married to Mugabe’s
only daughter Bona – joined former Air Zim captain Muzenda, a relative of
the late vice president Simon Muzenda, in October last year.

The loss-making carrier, which claims it is in talks with two strategic
partners to clear money owed to foreign creditors and raise capital to
allow for the resumption of long haul flights, according to the new CEO,
has been rapped by the AG for failing to subject its annual financial
statements for audit.

Yet information contained in the financial statements is required in
commercial negotiations.

Like most State-owned firms, Air Zim has been making losses for years due
to mismanagement, high operating costs, old equipment and aircraft that
are no longer profitable to fly.

Air Zim’s under resourced and old fleet comprises two Boeing 767s, three
737s, three MA60s and two Airbus A320s.

However, only four of those are flying – one airbus, one Boeing 767, one
737 and an MA60.

International Air Transport Association (Iata) also suspended Air Zim from
its account settlement system in 2012 due to non-payment of $4m in fees.

The association’s system settles accounts between the world’s airlines,
airline-associated companies and travel agencies.

While no comment could be immediately obtained from the stuttering
carrier, Muzenda told a parliamentary portfolio committee on Transport
last month that the national flag carrier was working towards gaining Iata
re-admission by May 31 this year.

The airline’s debt comprises salary arrears, outstanding taxes, payments
to the national pension fund and employee health insurance and foreign
debts of $300m.