Harare Mayor: Council Is Investigating Assets Included In West Properties' VFEX Portfolio
Harare Mayor Jacob Mafume has announced that the local authority will launch an investigation into how some of its assets were included in the portfolio of West Properties, a company listed on the Victoria Falls Stock Exchange (VFEX), with the council’s approval.
West Properties, previously known as Augur Investments, generated controversy when it listed on the VFEX in April due to ongoing court cases. Augur Investments had acquired vast tracts of land from the Harare City Council (HCC) as partial payment for an unfinished project involving the Harare Airport Road. Augur formed a joint venture with the council called Sunshine Property Development, which was granted significant land in Harare. However, the properties are now listed on the VFEX without the involvement or knowledge of the local authority.
According to the joint venture agreement, Augur controls 70% of the shares and was responsible for providing capital for Sunshine’s projects, while the council was to provide land and retain a 30% shareholding.
Mayor Mafume expressed concern that the council had not been informed about the inclusion of Sunshine assets in West Properties’ portfolio. He emphasized that such matters should have been discussed by council committees and brought to the attention of the full council. Mafume indicated that he would request the town clerk to assess whether the council’s interests were being protected in the Sunshine deal. If not, the council would seek legal advice to safeguard its interests and those of the residents. Mafume stated:
As we speak, this has not been discussed by any of our committees.
This is something that council had to be informed of because those properties are still the properties of council.
We have a stake in Sunshine and there are many condition precedents that have to be fulfilled before anything happens and we certainly will ask the town clerk and our representatives in those boards to see whether they is communications that come to council and have not been brought to the attention of the full council.
If not, we will then be taking advice from our legal practitioners as to how we can protect the interest of the council and the residents.
We are not aware, we certainly did not seek the endorsement o the council.
We have processes under the Zimbabwe Investment Development Agency that we have to follow.
There are quite a number of hurdles that a public entity has to cross over and most importantly, we have to consult the residents as to whether they want to be tied up in such a setup.
Certainly, I would have expected the representatives in the (Sunshine) board to have informed us.
It is a subsidiary duty as councillors to protect the interest of council and we will embrace all the options that we have as a council to defend the interest of council.
Should the advice lead us in that (VFSE listing) we will exercise all options as advised by our legal practitioners, and chamber secretary department to make sure that the interest of residents is not entangled in areas that will not add value to the residents nor interests where they that have not been consulted.
Last month, the council declined to address questions related to the transfer of land to Augur Investments in the Sunshine deal, citing ongoing court cases. However, it was later revealed that there were no active court cases involving Sunshine. The inquiries sought to clarify the establishment of the joint venture and the circumstances surrounding it in 2007.
In March, West Properties published a prospectus for listing on the VFEX, including Warren Hills Property and other properties owned by Sunshine in its property portfolio, subsequently listing them on the US dollar-denominated bourse. The company CEO is Kenneth Sharpe, a local businessman popularly known as Ken Sharpe.
