According to a
forensic audit of Harare Municipal Medical Aid Society (HMMAS) dated August 11,
2023, several anomalies were obtained including overpricing and double payment
of another property in Ruwa amounting to US$1,2 million.
The audit
revealed that the medical aid society bought properties without obtaining title
deeds, which has led to complications in tracing them.
Further, for
some months the former chief executive officer personally collected money for
members’ subscriptions from the City of Harare, but it was observed that US$246
500 was not received by the cashier.
According to
the audit report, there was an agreement of sale entered into by Everleigh
Services Private Limited represented by AfrAsia Bank and HMMAS for the purchase
of land held under Title Deed 11020/99.
It says the
total value was US$1,7 million of which a deposit of US$1,4 million was paid.
The transaction
took place on February 13, 2015.
Investigations
showed that the board was informed that the property was held as security by
the High Court for HMMAS for funds locked in Kingdom Bank.
“We observed
that despite the full payment having been made, it never became HMMAS property
but instead, it was sold to Cheetah Express Logistics Private Limited on 22
July 2018.
“HMMAS suffered
an actual prejudice of US$1,4 million and US$300 000 respectively. There are no
records to show that the above transaction was reversed, and money receipted
back into HMMAS accounts,” reads the forensic audit.
According to
the audit, it was further noted that after HMMAS bought the property, a total
of US$300 000 would have been required as conveyancing fees and stamp duty.
The audit said
in any event, the US$300 000 presented to the board was way above normal fees
for the transaction given that Capital Gains Tax was 4 percent of purchase
price (US$1, 7 million) was US$68 000. Conveyancing fees were round 3 percent
and a negligible figure for stamp duty.
HMMAS recently
came under for buying a 12-roomed house in Ruwa for a staggering US$1,2
million.
The forensic
audit shows that according to the agreement of sale signed by both parties, the
value of the building was US$700 000 which was paid in full including US$100
000 conveyancing fees paid into the Trust Account of Muza and Nyapadi Legal
Practitioners.
The audit
observed that the $100 000 was way above the stipulated expected conveyancing
fees, which is 4 percent of the purchase price and should have been US$28 000.
Even if duty
stamps were to be paid at prevailing rates, the total sum would not have come
to the US$100 000 paid.
The audit found
that pursuant to the purchase of Fortress Hospital, more than US$700 000 was
paid over and above the initial US$700 000 that was already paid through
Kingdom Bank.
“After that,
and without supporting documents, a sum of US$650 000 was stated and paid as
payment for equipment. Whereas we observed that Briward Enterprises values the
equipment that was there at the material time to be US$100 000, HMMAS was
prejudiced to the sum of US$550 000.” Herald
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