BAZ noted an array of inconsistencies within the initial application by Zimpapers and a presentation delivered by its group marketing and business development director, Tapiwa Mandimutsira.
The inconsistencies ranged from unbalanced cash flow projections, shareholding structure, legal and inconclusive technical details.
The commission chaired by Tafataona Mahoso left the Zimpapers panellists led by Zimpapers group chief executive officer, Justin Mutasa, at pains to justify the irregularities.
Commissioner Charity Moyo let the ball rolling when she put Zimpapers panelists to task after she demanded to know the shareholding structure of Zimpapers.
Moyo queried how the Mass Media Trust, which is the majority shareholder, can still have a stake in Zimpapers when its board has been dissolved.
She further demanded to know the faces of the unnamed 12,99 percent holders of the group, which the panelists could not identify.
“This is very critical in the issuance of a license as we should be in a position to know whether there are any foreigners among your shareholders,” Moyo indicated.
Commissioner Edward Dube further mounted pressure on the panelists after he noted 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. Dube indicated that the accumulative loss contradicts projections by Zimpapers that the radio station will become profitable after the first 10 months of operations.
Zimpapers intends to spend $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.
“There is an accumulative loss of over $245,000 in your first year as indicated by your cash flows in the application forms we have in possession yet your presentation here indicates that you will be making profit just after 10 months of operations,” he said.
Dube further noted that a 50 percent in reduced costs of studio equipment was not factored into the cash flow while there was aggregation and lumping of figures under administrative costs.
The commissioner who is a finance guru also raised the concern that the Diamond FM financial projection failed to factor in the $50,000 licensing fee demanded by BAZ given their application is approved.
“Under your cash flow, you didn’t factor in the financial obligation of the $50,000 demanded in the case your application is approved,” Dube highlighted.
He queried why Diamond FM has no supporting letter from Trans Media in setting up of its transmitter, giving the impression that Zimpapers will solely fund the exercise, which threatens viability of the project.
It came to light that Trans Media has been reluctant to offer the supporting letter considering that Zimpapers is yet to meet its transmission requirements for its current radio station, Star FM.
Zimpapers’ intention to have crossover programmes from Star FM was further interrogated since the station is supposed to have content from and by people in Mutare.
Mahoso ordered Zimpapers until next Wednesday to refine its application.
Post published in: News