News / National
MDC-T's Eddie Cross 'exposes' Meikles chairman Moxon
16 Apr 2015 at 06:06hrs | Views
Meikles Limited should get $56,6 million from the debt owed by the Reserve Bank of Zimbabwe (RBZ) instead of $90,8 million after the Finance ministry prescribed that only 5% interest will be permitted on creditors balances and Meikles and the Moxon families stand to gain $2.4 million personally from the proposed dividend, a legislator has said.
Bulawayo South legislator Eddie Cross accused Meikles chairman John Moxon of continually misleading "shareholders and the public by claiming that the Meikles debt continues to be at the level stated in the annual accounts of $90,8 million".
Cross said he was being accused of sabotaging the company and undermining investor and shareholder confidence by pointing out that it was not a done deal that the company would get $90,8 million.
"The effect of this decision on the Meikles Group will be substantive - it involves the write-down of the balance in accounts of $90,8 million to a maximum of $56,6 million - a write down of $34,1 million, virtually wiping out the profits reflected in the 2013 to 2014 accounts," Cross said.
Cross accused Moxon of failing to disclose that the $16 million of the Treasury Bills (TBs) given to the group in settlement of the liability by the Finance ministry had already been disposed of into the market at a discount rate of over 31%. He said this had yielded $11 million instead of $16 million.
He says the ministry may apply the in duplum rule to the domestic debt. The in duplum rule protects debtors from exploitation by ensuring that their creditors cannot allow interest to accumulate indefinitely. It's a concept that stops the running of interest when unpaid interest equals the outstanding capital balance.
"Further compounding the difficulties of the group is the possibility that the ministry may apply the in duplum rule to the domestic debt and if they do, then the balance will be further reduced to $51,8 million.
"My own concern remains the welfare of shareholders, creditors and staff. I have found it difficult to understand the attitudes of Meikles directors or the actions of senior staff at both RBZ and the Finance ministry, especially the manner in which this important issue has been managed. I further think that the group's auditors should have been proactive and cautious in their handling of this issue," Cross said.
On the dividend, Cross said, "I feel very strongly that this sort of fraud cannot be allowed to go through, its theft of public funds on a large scale to benefit a small minority - the Meikles and Moxon families stand to gain $2,4 million personally from the proposed dividend."
Bulawayo South legislator Eddie Cross accused Meikles chairman John Moxon of continually misleading "shareholders and the public by claiming that the Meikles debt continues to be at the level stated in the annual accounts of $90,8 million".
Cross said he was being accused of sabotaging the company and undermining investor and shareholder confidence by pointing out that it was not a done deal that the company would get $90,8 million.
"The effect of this decision on the Meikles Group will be substantive - it involves the write-down of the balance in accounts of $90,8 million to a maximum of $56,6 million - a write down of $34,1 million, virtually wiping out the profits reflected in the 2013 to 2014 accounts," Cross said.
He says the ministry may apply the in duplum rule to the domestic debt. The in duplum rule protects debtors from exploitation by ensuring that their creditors cannot allow interest to accumulate indefinitely. It's a concept that stops the running of interest when unpaid interest equals the outstanding capital balance.
"Further compounding the difficulties of the group is the possibility that the ministry may apply the in duplum rule to the domestic debt and if they do, then the balance will be further reduced to $51,8 million.
"My own concern remains the welfare of shareholders, creditors and staff. I have found it difficult to understand the attitudes of Meikles directors or the actions of senior staff at both RBZ and the Finance ministry, especially the manner in which this important issue has been managed. I further think that the group's auditors should have been proactive and cautious in their handling of this issue," Cross said.
On the dividend, Cross said, "I feel very strongly that this sort of fraud cannot be allowed to go through, its theft of public funds on a large scale to benefit a small minority - the Meikles and Moxon families stand to gain $2,4 million personally from the proposed dividend."
Source - online
