via Home-seekers duped of $1m | The Herald July 7, 2015 by Sophia Chese
AT least 1 300 home-seekers from Budiriro’s Ngungunyana Housing Cooperative lost more than $1 million in the past five years to the management committee, an audit released at the weekend revealed.
The audit was conducted by Mr Livingstone Magede of Oppermec Business Services Pvt Ltd.
It was presented to members during the housing cooperative’s annual general meeting on Sunday.
It accused, the Mr Tikho Sibanda-led committee of feasting on members’ subscriptions through receipt forgery, buying luxuries among other dealings.
“It was noted that the management received cash from replacement fees and these were not banked. However, we did not have information as how these funds were utilised from general minutes,” reads part of the audit report.
Documents in possession of The Herald showed that over $400 000 meant for allocation and replacement fees for stands was diverted for personal use, while $132 839 was siphoned as petty cash to cover various expenses.
The audit revealed that there was no evidence that the allowances were approved.
“We did not have any evidence that these allowances were approved by a general meeting as outlined in the By Law Section 51 (1),” he said.
It was also established that the management made payments of more than $500 000 to a company called Egorock Investments, but there was no contract that was signed between the cooperative and the firm.
“We did not get contracts of agreement between the cooperative and Egorock Investments, that is the memorandum of agreement or any contract made between the management and the service provider,” the audit revealed.
“A contract would state the terms and conditions each party should follow and remedies of any breach.”
The audit concluded that management was not following the provisions of the Co-operative Societies Act Chapter 24:05 and Housing Co-operative By Laws.
“There was no evidence that the management were running the co-operative with an approved budget as defined also by Section 57 (2).”
The cooperative is now under an interim leadership led by Mr Luke Chesango and the misappropriation of funds by the previous executive has been reported to the CID serious fraud under case number DR53/06/13.