Chiyangwa's Zeco struggles

HARARE - Businessman Philip Chiyangwa’s listed Zeco Holdings Limited (Zeco) is stuttering with the engineering group trading in the red since dollarisation in 2009.

The group’s losses widened to $4,7 million in the year to December 2013 from $2,5 million incurred in prior year.

During the period under review, revenue declined by 60 percent to $600 000 from $1,5 million.

Chiyangwa, who is Zeco’s chairman, said the poor performance “reflects the challenging macro-economic environment that was prevailing in the country during the period.”

Zeco last year ranked the worst governed company on the Zimbabwe Stock Exchange by the Institute of Chartered Secretaries and Administrators of Zimbabwe (ICSAZ) — is involved in engineering, fabrication and plastic blow moulding.

According to ICSAZ, Zeco performed badly on the adjudication template prepared by the institution.

The adjudication considered three categories — shareholder protection, shareholder practices and sustainability reporting, and board conduct.

The group, which has been struggling to publish its financial results within the bourse’s stipulated time, has also not held an annual general meeting in the past years with the last one held in 2010.

Chief executives and board members are also constantly changing.

Market analysts have also questioned Zeco’s continued listing on the ZSE as the company is largely controlled and run by Chiyangwa himself, ignoring basic corporate governance rules.

Zeco is owned by Chiyangwa’s Native Investments which had an 82,58 percent stake before the listing and now holds 66,05 percent of the listed entity, way above the 35 percent majority shareholding threshold according to ZSE listing rules.

It listed on the local bourse in 2008 and is currently trading at 0,01 cents.

Chiyangwa, however, said Zeco was a going concern evidenced by its strong asset base valued at over $45 million.

“Efforts to secure re-entry into lucrative regional markets that would culminate in improved performance are still on-going,” he said of Zeco’s subsidiary Delward Engineering.

“Negotiations with a major regional rail operator are still underway, and if successfully concluded, should have a major impact on the performance of the company in 2014,” he added.

Chiyangwa noted that on the local market, the company had entered into a strategic alliance with a private rail operator which should result in more work and improved performance for the engineering firm.

“Delward also successfully negotiated and sealed a major contract with a foreign company which won a local infrastructure tender and work has already commenced. These contracts are expected to have a positive impact on results in the current year,” he said.

Comments (3)

what was chiyangwa trying to do anyway. thief

see - 1 April 2014

Chiyangwa, zanu yako yakawhinha resoundingly maelection, so what economic challenges are you talking about? Tongaizve tione and make money. Isu tiri va Morgen

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