Source: Crisis at Rufaro Marketing . . . board not constituting a quorum | Daily News
Rufaro Marketing (Private) Limited is in serious breach of international best practices and corporate governance rules after it emerged that the Harare City Council (HCC)’s liquor business is technically operating without a board.
Minutes of HCC’s finance and development committee indicate that the company is only operating with three people on its board who do not constitute a quorum.
A quorum is the minimum number of members that must be present at a meeting.
A meeting of an organisation cannot take place unless the required quorum is in attendance.
Any decision passed without a quorum is null and void, which means that, technically, Rufaro Marketing is operating without a board.
It therefore requires two more board members to be fully functional.
However, engaging additional board members would result in additional financial burden to the company whose profitability has been vacillating like a yo-yo.
In 2016, Rufaro Marketing made a profit of $299 000, with profitability dipping the following year to $14 000 in 2017.
Last year, the business was up on the previous year with profits reaching $110 000.
According to the HCC, Rufaro Marketing’s debts have been reduced from $12 million to $5 million after key payments were made to banks and other creditors, among them the National Social Security Authority, African Distillers and BDO.
Significant payments were also made towards human resources matters with $2,7 million going towards retrenchments from a total of $3 million owed.
A total of $826 000 was paid in pensions against a total of $1,698 million.
“Payment on the Zimbabwe Revenue Authority debt was yet to be paid as priority was given to employee-related benefits,” read part of the minutes.
While a decision has been made to venture into real estate on property investments and turn former beer halls and gardens into students accommodation, leisure and children play centres, this is yet to be implemented as the company’s focus was to retire the legacy debts.
Rufaro Marketing’s chief executive officer told the finance committee that there were still four employees at the company who had taken them to court over salary disputes.
Acting human capital director Matthew Marara said some employees had been retrenched while others had been absorbed by HCC.
“Those employed by council had been vetted for their suitability and had been engaged with the understanding that the city would be responsible for their welfare from the date of engagement into council services. The salaries that they were owed by Rufaro Marketing would be resolved there,” Marara said.
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