Mutapa Fund hit with qualified audit over valuation and currency translation breaches

The Mutapa Investment Fund (MIF) has received a qualified audit opinion from Grant Thornton, with auditors flagging major breaches of international accounting standards relating to the valuation of subsidiaries, associates and financial assets, as well as the translation of Zimbabwe Gold (ZWG) financial information into United States Dollars (USD).

In the report, covering the period 19 September 2023 to 31 December 2024, auditors said Mutapa failed to comply with IFRS 9 and IFRS 13 by not measuring its investments at fair value on initial recognition. The Fund assumed control of dozens of state‑owned enterprises through Statutory Instruments 156 of 2023 and 51 of 2024, but did not determine fair values at the dates the assets vested.

As a result, the auditors said the carrying amounts of investments and the capital contribution recorded in the financial statements are misstated, and the extent of the misstatement could not be determined.

Grant Thornton also raised concerns over the use of unaudited financial information to value unquoted subsidiaries and associates worth more than USD 11.4 billion. The auditors said they were unable to verify whether necessary adjustments had been made to the unaudited data used in the valuations.

A further breach was cited under IAS 21, after Mutapa translated ZWG financial statements into USD without first restating them for hyperinflation as required by IAS 29. Some entities were also translated using exchange rates auditors deemed inappropriate.

The auditors said they could not determine the adjustments required to correct the misstated values.

Despite the qualified opinion, the auditors confirmed that the financial statements were otherwise properly prepared in accordance with the Sovereign Wealth Fund of Zimbabwe Act.