BAZ grills Zimpapers bosses over Mutare radio station

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THE Zimpapers top brass had a torrid time on Tuesday as they sought to convince the Broadcasting Authority of Zimbabwe (BAZ) that they were the right candidates to be granted a commercial broadcasting licence.
The newspaper company is applying for a licence to operate its Diamond FM radio station to be based at their Manica Post offices in the eastern city of Mutare.
Zimpapers was represented by group chief executive officer, Justin Mutasa, Group Editor-In-Chief Pikirayi Deketeke and Comfort Mbofana.
The representatives were grilled by the Tafataona Mahoso-led commission for nearly two hours and were at pains to explain some inconsistencies in their application.
The BAZ commissioners queried the group’s capacity to run the project after a number of inconsistencies were cited in their documents.
Zimpapers group marketing and business development director, Tapiwa Mandimutsira, delivered a presentation to the public before the commissioners started to grill them.
The inconsistencies noted by the commission ranged from unbalanced cash flow projections, the opaque shareholding structure, legal and inconclusive technical details.
Commissioner Charity Moyo asked the Zimpapers representatives to shed light on the shareholding structure at the newspaper company which she said was unclear.
Shareholding structure
She queried how the Mass Media Trust, which is the majority shareholder in the application, still has a stake in Zimpapers when its board was dissolved.
“In 2001 Zimbabwe Mass Media Trust and its board were abolished, to what extent then is Zimbabwe Mass Media Trust still a legal persona? I am glad Lady Tomana is here she could clarify. We are not privy to some of the things that happen in the echelons of power,” she said.
“I still understand Mass Media Trust was a holding company for Zimpapers, Ziana, Community Newspapers and Kingstons. Are these still part of the Zimbabwe Mass Media Trust which is a holding company for Zimpapers?” asked Moyo.
Moyo demanded that the Zimpapers panel divulges the names of the faceless 99 percent of the shareholders of the group.
The panel was clearly taken aback by the question and had a tough time providing a satisfactory response.
Moyo said it was critical for the commissioners to know the structure of the shareholders as it was a prerequisite in the issuance of a radio licence.Advertisement

“We want to know whether there are foreigners among the shareholders, it is very critical for the Commission to know,” said Moyo.
Financing not clear
Edward Dube, a commissioner with BAZ, said there were some anomalies in the projected cash flow figures.
“You told us that Diamond FM cash flows were running in accumulative loss of over $245,000 in the first year accrued from a loan scheme to set-up its studio.
“The loan is expected to be cleared within 30 months. How do you then project to pay back the loan given than your licence is a commercial one?” queried Dube.
Dube noted that the accumulative loss was in sharp contrast with Zimpaper’s projections that the radio station will be able to rack in profits after the first 10 months of its inception.
According to Mandimutsira’s presentation, Zimpapers intends to pump $179,413 on studio equipment, $25,450 on furniture and fittings, $21,706 on computer equipment, $14,000 on motor vehicles and $55,569 on plant and machinery.
But Dube, who was in an uncompromising mood queried the accumulative loss of over $245,000 in the first year as indicated by the cash flows in the Zimpapers’ application forms.
“Your presentation is telling us a different story from the application. Your presentation is talking of profits in the first 10 months. Can you clarify please,” he said amid laughter from the floor.
Other commissioners also noted that some information on the reduction of the equipment by 50 percent was not mentioned in the cash flow.
Project viability
“The figures are just bunched in the cash flow, it’s not clearly explained especially on the administrative costs,” said Dube adding that the $50,000 BAZ licensing fee was not factored in the cash flow.
The BAZ commissioners also queried the non-availability of a supporting letter from Trans Media in setting up of its transmitter which the commissioners said gave an impression that Zimpapers will solely fund the project.
They said this could threaten the viability of the project given the high cost of broadcasting equipment.
The issue of crossover programmes from Star FM in the mornings also came under scrutiny as the application by Zimpapers clearly states that the station will be owned by people of Mutare.
Throughout the inquiry, the Zimpapers management kept on profusely apologising for the inconsistencies.
“We sincerely apologise for this. I think it was just an oversight. We will address all the inconsistencies,” said Mandimutsira.
The Zimpapers management was given until next Wednesday to put their house in order before they are entertained again.