By Alois Vinga
AIR Zimbabwe is currently saddled with a US$407,8 million cumulative loss on the back of US$39 million debt to a Chinese company coupled with bad management practices almost threatening the existence of the entity.
The alarming rot laid bare by Acting Auditor General (AG) Rheah Kujinga’s report reveals that urgent intervention is required to save the airline.
“Air Zimbabwe incurred a loss of US$15,4 million in 2019 and US$85 million in 2018. The accumulated losses of US$407,8 million have been recognised to date. The company’s total liabilities exceed its assets by US$380,2 million,” AG’s report reads in part.
Additionally, the report said, there is a contingent liability amounting to approximately US$39 million arising from claims being done by South Jet (China) in connection with a dispute over ownership of ZWPN Airbus A320.
“These conditions create uncertainties which cast significant doubt on the company’s ability to continue as a going concern. My opinion is not modified in respect of this matter,” said the AG.
Decision-making at the almost crippled airliner is also under severe threat after revelations that the company’s eleven top management posts are all filled with acting personnel.
Keeping shambolic books of accounts has also become the order of the day amid revelations that at the beginning of the year ended December 31, 2019, the airline’s opening balances were not syncing to the prior year’s financial statement balances.
“However, management could not provide a justification or correction for the variances in the opening balances amounting to US$92,4 million.
“As such, I could not satisfy myself on the accuracy of the opening balances and determine if any adjustments were necessary to the statement of financial position. Therefore, for all balance sheet balances, valuation and accuracy of them could not be determined,” said Kujinga.
The report shockingly reveals that the company has not recognised as its assets several aircraft that it has either used in the past or currently maintains due to the unavailability of information on whether Air Zimbabwe is the rightful owner of the aircraft.
Consequently, the AG was not able to obtain sufficient appropriate audit evidence on the completeness of the aircraft recognised and any associated obligations that the company may have.