Costly Blunder: OK Zimbabwe Bought 62 Cars Instead of 31 in Double Vehicle Procurement Error
Shocking fresh details have emerged showing that struggling retail giant OK Zimbabwe Limited suffered a major financial setback after duplicating a vehicle purchase for its 2024 OK Grand Challenge promotion.
The error saw the company acquire 62 vehicles instead of the planned 31, resulting in unplanned expenditure exceeding US$500 000 at a time when the business was already grappling with severe financial strain, NewsDay reveals.
Also Read: OK Zimbabwe On Brink Of Collapse: Enters Corporate Rescue Owing Suppliers US$24 Million
Administrative Breakdown Behind Costly Error
According to findings from a report presented to creditors, the duplication stemmed from internal administrative failures, highlighting serious weaknesses in procurement systems.
The incident has been described by insiders as one of the most significant governance lapses at a listed company, raising concerns about oversight and internal controls.
Corporate rescue practitioner Bulisa Mbano confirmed the scale of the error, noting that the company absorbed approximately US$560 000 in costs for the extra vehicles.
“OKZL purchased 31 OK Grand Challenge promotion cars in duplicate in 2024, with the company absorbing the cost of US$560 000 for the extra cars,” the report read.
Vehicles Redeployed Amid Cash Flow Strain
Although the additional vehicles were later reassigned for operational use and allocated to staff, the financial impact had already taken its toll.
The unexpected expense further strained working capital, worsening liquidity challenges for the retailer, which had already been battling tight cashflows and rising obligations.
Failed Investments Add to Financial Pressure
The procurement mishap forms part of a broader pattern of financial missteps that contributed to the company’s decline.
The report highlights millions of dollars channelled into investments that failed to generate returns, including ventures in Food Lovers Market, a Bon Marché outlet in Marondera, and Alowell Pharmacies.
Additional working capital injected into these projects also failed to yield results, with several of the ventures eventually being shut down.
Asset Sales Fail to Provide Relief
Efforts to ease financial pressure through asset disposals delivered limited relief.
While some properties were sold to settle debts, a significant portion of proceeds was immediately used to offset existing borrowings, leaving little liquidity to support operations.
In another transaction, part of the funds received remains tied up pending tax clearance from the Zimbabwe Revenue Authority.
Currency Volatility Triggers Liquidity Crunch
The company’s financial woes were compounded by exchange rate instability.
Although supplies for the 2024 OK Grand Challenge were secured in US dollars, much of the revenue was collected in local currency. A sharp depreciation later in the year significantly reduced the value of these funds.
This mismatch eroded purchasing power and contributed to a liquidity crisis that left suppliers unpaid.
Supplier Fallout and Revenue Decline
As payment delays mounted, supplier confidence deteriorated, with many scaling back or halting deliveries altogether.
The disruption led to stock shortages and declining sales, with monthly revenue dropping sharply from over US$21 million in early 2024 to just over US$1 million by January 2026.
At the same time, operational inefficiencies, including poor procurement practices and inventory losses, further weakened the business.
Turnaround Efforts Underway
Despite the scale of the challenges, Mbano expressed cautious optimism about the company’s recovery prospects.
He noted that while decisions made by management were collectively approved, they ultimately proved damaging.
An investigation into the company’s affairs is now expected, in line with insolvency regulations, as part of efforts to stabilise the business.
However, rebuilding will require fresh capital injection and the restoration of strained relationships with suppliers.
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