Liquidation of Correios de Moçambique: CIP asks if each building costs 805,000 meticais

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Liquidation of Correios de Moçambique: CIP asks if each building costs 805,000 meticais

10:12 CAT | 27 Oct 2021

FILE PHOTO - For illustration purposes only. Correios de Moçambique building in Tete city. [File photo: Scia Media]

The Public Integrity Centre (CIP), a non-governmental organisation that advocates transparency and integrity in the management of public affairs, warns of the risk of squandering the real estate assets of the extinct public company Correios de Moçambique, which has been in liquidation since June of this year.

The alert comes in a study published by the organisation on Sunday.

At issue is the fact that the Institute for the Management of State Holdings (IGEPE), has assessed the 170 buildings declared by Correios de Moçambique in its 2019 annual report, as worth 137 million meticais, which corresponds to an average of around 805,000 meticais per building [around 12,608 US dollars per building, at current exchange rates].

According to the CIP, the value is “much below what is considered in the market, taking into account that the company’s buildings are mostly located in provincial capitals and in the centre of cities”.

There is also the fact that Correios de Moçambique owns land, industrial buildings, guest houses and housing whose accounting valuation is unknown, as well as there being no information regarding the location of these assets or their current condition.

“This possible undervaluation of the company’s properties puts at risk the company’s assets and the fulfilment of its obligations towards its stakeholders, since the main destination of the company’s assets is the amortisation of its debts. Furthermore, this scenario of undervaluation of Correios de Moçambique property risks being associated with situations of corruption, in which a low valuation of the property may benefit future buyers to the detriment of compliance with the company’s duties and, consequently, to the detriment of the state,” the CIP says.

Assets greater than debts

According to the CIP study, by 2019, Correios de Moçambique had total assets of 409.6 million meticais, of which about 63% (258.9 million meticais) corresponded to amounts which the company was to receive from customers and other debtors. Standing out in the list of debtors are companies Gree Point Investment Group Ltd (with about 157.7 million meticais); subsidiary Post Bus (12.4 million meticais); postal accounts accepted from other countries (12.42 million meticais); and debts with the leasing of spaces (12.44 million meticais).

“The company also has financial holdings of 8 million in the companies Corre, Post Bus and others. Meanwhile, in the 2019 report and accounts there is no record of receipts of financial returns from the participation in these companies. Therefore, the rights and obligations of Correios de Moçambique in relation to these companies constitute an aspect which equally deserves the attention of the IGEPE and the Liquidation Commission,” the CIP study comments.

According to the CIP, citing the 2019 annual report, Correios de Moçambique has accumulated debts of 402.1 million meticais, of which 168.7 million meticais are debts with suppliers of goods and services, 154.6 million meticais with taxes and mandatory social security, 53.7 million meticais with workers and 25.10 million meticais with national banks.

Read: Mozambique: 18 months to liquidate Correios de Moçambique – AIM report

For this reason, the organisation urges the Liquidation Committee of Correios de Moçambique to carry out an “efficient and complete survey of the accounting value of these assets”, in order to avoid the depletion of the state’s assets through under and/or overvaluation.

“This way, it will be possible to guarantee the fulfilment of the company’s obligations to its stakeholders, as well as the possible reorientation of part of the value of its assets to support other public companies still in operation,” the report stresses.

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Correios de Moçambique was dissolved on the 25th of May, during the 17th Ordinary Session of the Council of Ministers. Minister of Economy and Finance Adriano Maleiane told reporters at the time that the winding up of the company was due to the fact that it did not fit into the category of companies which are strategic and structuring in the state’s business sector.

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