News / Local
MDC-T destroys Bulawayo factory
27 Mar 2012 at 05:42hrs | Views
---1200 workers lose jobs
MORE than a thousand workers have been left jobless after two city companies that are heavily owed by the Movement for Democratic Change formation led by Prime Minister Morgan Tsvangirai closed shop due to liquidity crisis, Southern Star has revealed.
The manufacturing firms, Cabat Trade and Finance (Private) Limited and Security Mills (Private) Limited have been placed under Judicial management by the High Court of Bulawayo after accruing a staggering debt of US$5 million in operational and other costs.
This was after their claim of ZAR 4 627 863.93 against the MDC-T was dismissed on the basis that they had no valid contract with the Tsvangirai led party.
The money was supposed to be paid in South Africa including the value added tax and was for a consignment of party t-shirts and regalia.
One of the companies, Security Mills, has since rented out their premises to a church organisation.
MDC-T had allegedly made the order for the 2008 Presidential runoff, which Tsvangirai opted out of after claiming that more than a hundred of its supporters had been attacked by Zanu-PF.
Investigations by our correspondent, whose findings have been confirmed by sources within the MDC-T and the affected companies show that on or about 18 March 2008, MDC-T legislator Eddie Cross and Simon Spooner entered into an oral contract with Laurence Zlatter, representing the company, in terms which, the former ordered on behalf of the MDC-T some party material for the 2008 elections.
The order was for the manufacturing and supply of 200 000 T shirts and head scarves, commonly known as "doeks and bandanas." The said order was to be supplied in batches and cost ZAR 4 627 863.93.
Cross and Spooner made an undertaking to pay as MDC-T agents but they defaulted prompting the companies to drag them to the High Court of Bulawayo via summons claiming the amount owed.
Justice Lawrence Kamocha dismissed the claim on 10 January this year after a three year legal wrangle and soon after that the companies filed an appeal at the Supreme Court arguing that the Judge erred in dismissing their claim because he ignored essential facts and points of law regarding the matter.
The Judge had accepted the defense by MDC-T that Cross and Spooner did not have "express authority" to enter into a contract with the manufacturing company thus there was no legal basis of suing the political outfit.
This was despite the fact that the MDC-T took all the merchandise that was ordered by Cross and Spooner and distributed it to its members.
To date neither Cross nor Spooner and or the MDC-T has paid a cent for all the T Shirts, bandanas, doeks and other material.
"The defendant denied that it had authorized Mr Eddie Cross and Mr Spooner to enter into the alleged contract.
"It averred that neither Mr Cross nor Mr Spooner had authority to enter into contracts on their behalf.
"It denied that it had purchased anything from the first plaintiff and denied liability to pay VAT in South Africa," said the Judge in his 17 page ruling.
The MDC-T has through its finance department advised the factory directors that it could not pay the debt because it was unlawful to make a payment outside the country.
However, according to a letter leaked to the Southern Star, the transaction was lawful at the time.
The letter was written by the Chief Foreign Exchange Division Administrator only identified as C Kadungure.
"We hereby confirm that the aforesaid transaction in no manner constituted a breach of then prevailing Zimbabwean Exchange Control Regulations, albeit that receipt of the said payment by yourselves from Cabat is overdue and non-complaint with the then prescribed time period into Zimbabwe of such sale proceeds.
"You are directed to make very reasonable endeavor to procure that the receipt of the said foreign currency into Zimbabwe is forthcoming as expeditiously as possible," reads part of the letter dated 19 November 2009 in part.
Several attempts to get payment from the MDC-T have failed and this paper is in possession of letters written to MDC-T leader â€" Tsvangirai and Industry and Commerce Minister Welshman Ncube by the directors of the affected companies seeking help.
MDC-T has not replied any whereas Ncube has advised that the companies apply for the Distressed Industries and Marginalized Areas Fund (Dimaf).
"Tsvangirai has not replied to any of our correspondence, we only got communication from Prof Ncube who advised that we wait for the outcome of the court process and we did so," said a director who requested not to be named.
Impeccable sources spoken to say, as a direct result of MDC-T failure to pay its debt, 1200 workers have lost their jobs and the company now has 190 workers after failing to raise running capital.
Those that remained have been receiving paltry salaries that range from US$10 to US$100 per month.
"The situation here has been very bad. When we opened on 1 February this year, the company directors told us that they are unable to fund operational and other costs because they have not been paid by the MDC-T for the T shirts we made in 2008.
"They said they have taken the MDC-T to court because it has refused to respect its promises. We are yet to hear what happened in court," said a worker on condition of anonymity.
Another added: "Am not sure how many we are but we are less than 200. We no longer have any overtimes, and have no big orders. At one point in time we got US$10 as salary plus some remnant clothes," said the worker.
Efforts to get a comment from the factory's judicial manager, Tapuwa Chizara failed as he was reportedly attending meetings.
A visit to the company site at Belmont showed a sorry site. Part of the factory's halls, where a sister company â€" Textile Mills operated from - has been leased out to Prophet Makandiwa's United Family International ministries church.
Contacted for comment on Wednesday, MDC-T Bulawayo province spokesperson Mandla Sibanda professed ignorance about the case.
"I am unaware of the real facts concerning what you are talking about, so I would not do justice to your questions. Let me research because it is impossible for me to tell you anything," he said.
When further pressed about his party being a pro-labour movement and clearly having a hand in causing the suffering of 1200 former factory workers and their families he replied:
"Our party is labour party and we stand for the workers and the generality of the people of Zimbabwe," he said.
MDC-T was formed in 1999 as a broad based movement comprising of labour, students and the academia. Amongst its ranks, party president â€" Morgan Tsvangirai, his deputy Thokozani Khupe, Public service minister Lucia Matibenga amongst many of its stalwarts are renowned labour activists.
The closure of the companies owed by MDC-T comes heavy during the "Save Bulawayo Campaign" which Finance minister Tendai Biti has dilly-dallied to release funding for. Biti belongs to the MDC-T.
MORE than a thousand workers have been left jobless after two city companies that are heavily owed by the Movement for Democratic Change formation led by Prime Minister Morgan Tsvangirai closed shop due to liquidity crisis, Southern Star has revealed.
The manufacturing firms, Cabat Trade and Finance (Private) Limited and Security Mills (Private) Limited have been placed under Judicial management by the High Court of Bulawayo after accruing a staggering debt of US$5 million in operational and other costs.
This was after their claim of ZAR 4 627 863.93 against the MDC-T was dismissed on the basis that they had no valid contract with the Tsvangirai led party.
The money was supposed to be paid in South Africa including the value added tax and was for a consignment of party t-shirts and regalia.
One of the companies, Security Mills, has since rented out their premises to a church organisation.
MDC-T had allegedly made the order for the 2008 Presidential runoff, which Tsvangirai opted out of after claiming that more than a hundred of its supporters had been attacked by Zanu-PF.
Investigations by our correspondent, whose findings have been confirmed by sources within the MDC-T and the affected companies show that on or about 18 March 2008, MDC-T legislator Eddie Cross and Simon Spooner entered into an oral contract with Laurence Zlatter, representing the company, in terms which, the former ordered on behalf of the MDC-T some party material for the 2008 elections.
The order was for the manufacturing and supply of 200 000 T shirts and head scarves, commonly known as "doeks and bandanas." The said order was to be supplied in batches and cost ZAR 4 627 863.93.
Cross and Spooner made an undertaking to pay as MDC-T agents but they defaulted prompting the companies to drag them to the High Court of Bulawayo via summons claiming the amount owed.
Justice Lawrence Kamocha dismissed the claim on 10 January this year after a three year legal wrangle and soon after that the companies filed an appeal at the Supreme Court arguing that the Judge erred in dismissing their claim because he ignored essential facts and points of law regarding the matter.
The Judge had accepted the defense by MDC-T that Cross and Spooner did not have "express authority" to enter into a contract with the manufacturing company thus there was no legal basis of suing the political outfit.
This was despite the fact that the MDC-T took all the merchandise that was ordered by Cross and Spooner and distributed it to its members.
To date neither Cross nor Spooner and or the MDC-T has paid a cent for all the T Shirts, bandanas, doeks and other material.
"The defendant denied that it had authorized Mr Eddie Cross and Mr Spooner to enter into the alleged contract.
"It averred that neither Mr Cross nor Mr Spooner had authority to enter into contracts on their behalf.
"It denied that it had purchased anything from the first plaintiff and denied liability to pay VAT in South Africa," said the Judge in his 17 page ruling.
The MDC-T has through its finance department advised the factory directors that it could not pay the debt because it was unlawful to make a payment outside the country.
However, according to a letter leaked to the Southern Star, the transaction was lawful at the time.
The letter was written by the Chief Foreign Exchange Division Administrator only identified as C Kadungure.
"We hereby confirm that the aforesaid transaction in no manner constituted a breach of then prevailing Zimbabwean Exchange Control Regulations, albeit that receipt of the said payment by yourselves from Cabat is overdue and non-complaint with the then prescribed time period into Zimbabwe of such sale proceeds.
"You are directed to make very reasonable endeavor to procure that the receipt of the said foreign currency into Zimbabwe is forthcoming as expeditiously as possible," reads part of the letter dated 19 November 2009 in part.
Several attempts to get payment from the MDC-T have failed and this paper is in possession of letters written to MDC-T leader â€" Tsvangirai and Industry and Commerce Minister Welshman Ncube by the directors of the affected companies seeking help.
MDC-T has not replied any whereas Ncube has advised that the companies apply for the Distressed Industries and Marginalized Areas Fund (Dimaf).
"Tsvangirai has not replied to any of our correspondence, we only got communication from Prof Ncube who advised that we wait for the outcome of the court process and we did so," said a director who requested not to be named.
Impeccable sources spoken to say, as a direct result of MDC-T failure to pay its debt, 1200 workers have lost their jobs and the company now has 190 workers after failing to raise running capital.
Those that remained have been receiving paltry salaries that range from US$10 to US$100 per month.
"The situation here has been very bad. When we opened on 1 February this year, the company directors told us that they are unable to fund operational and other costs because they have not been paid by the MDC-T for the T shirts we made in 2008.
"They said they have taken the MDC-T to court because it has refused to respect its promises. We are yet to hear what happened in court," said a worker on condition of anonymity.
Another added: "Am not sure how many we are but we are less than 200. We no longer have any overtimes, and have no big orders. At one point in time we got US$10 as salary plus some remnant clothes," said the worker.
Efforts to get a comment from the factory's judicial manager, Tapuwa Chizara failed as he was reportedly attending meetings.
A visit to the company site at Belmont showed a sorry site. Part of the factory's halls, where a sister company â€" Textile Mills operated from - has been leased out to Prophet Makandiwa's United Family International ministries church.
Contacted for comment on Wednesday, MDC-T Bulawayo province spokesperson Mandla Sibanda professed ignorance about the case.
"I am unaware of the real facts concerning what you are talking about, so I would not do justice to your questions. Let me research because it is impossible for me to tell you anything," he said.
When further pressed about his party being a pro-labour movement and clearly having a hand in causing the suffering of 1200 former factory workers and their families he replied:
"Our party is labour party and we stand for the workers and the generality of the people of Zimbabwe," he said.
MDC-T was formed in 1999 as a broad based movement comprising of labour, students and the academia. Amongst its ranks, party president â€" Morgan Tsvangirai, his deputy Thokozani Khupe, Public service minister Lucia Matibenga amongst many of its stalwarts are renowned labour activists.
The closure of the companies owed by MDC-T comes heavy during the "Save Bulawayo Campaign" which Finance minister Tendai Biti has dilly-dallied to release funding for. Biti belongs to the MDC-T.
Source - The Southern Star
