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Consortium secretly inspects CSC assets

by Staff reporter
22 Jan 2021 at 06:48hrs | Views
FRESH details have emerged revealing how a consortium of local industrialists and companies - CSC (2016) - is angling to take over the defunct Cold Storage Company (CSC) through a US$225 million bid.

The company was clandestinely authorised by the government to assess assets belonging to the meat processor despite a running contract between the state and Boustead Limited.

Boustead officials remained tight lipped when contacted for comment.

CSC (2016), aims to snap a 75% stake in CSC, and was given the greenlight to inspect assets of the insolvent company in Bulawayo and Kadoma by the then Agritex chief inspector Joseph Gondo.

The consortium is led by former CSC executive and Monetary Policy Committee (MPC) member Eddie Cross, who is also an ex-MDC legislator.

In a letter dated and signed on July 24, 2020, Gondo gave CSC (2016) the green light to tour CSC properties in Bulawayo and Kadoma.

The controversial approval was granted at a time the government's US$130 million CSC revival plan with Boustead Limited was still subsisting.

Gondo's letter reads; "To whom it may concern: Permission to travel to Bulawayo and back on 26 July 2020 for the purpose of an inspection of the assets of the Cold Storage Commission in Bulawayo and Kadoma, including the assets of Super Canners and Wet Blue Industries."

Super Canners and Wet Blue Industries are CSC subsidiaries.

The delegation from the consortium comprised Cross, Sullivan and United Refineries executive and Presidential Advisory Committee (Pac) member Busisa Moyo. Moyo was appointed to head the newly streamlined Zimbabwe Investment Development Authority (Zida) by President Emmerson Mnangagwa in March 2020.

He also heads the Zimbabwe International Trade Fair (ZITF).

The disclosures that the consortium was allowed to inspect CSC assets are at variance with Cross's response to this publication that the grouping had not formally presented the proposal to the government.

"We have not formally done so (submitting the proposal to the government). It is not formally submitted to the government. It has just been moving around government circles," he said last week.

However, Cross made a somersault this week as he acknowledged that a delegation from the consortium had tried to tour CSC assets but was barred by Boustead Limited management.

"We asked for approval (to inspect CSC properties) but were denied access. We were preparing to make an approach to the government and wanted to see for ourselves the condition of the factories.

"Boustead Beef argued that they controlled the factories and would not allow us access. We did not press the issue," Cross said.

Gondo denied penning a letter granting CSC (2016) access to CSC factories.

"I do not remember writing such a letter. My recommendation letter was generally elaborate..."

According to the consortium's proposed bid to assume a controlling stake in the insolvent state enterprise, the Cross-led group wants to take over both assets and liabilities.

"We propose that the Government of Zimbabwe's equity in CSC (2016) Limited be set at 25%, represented by two directors. Our CSC (2016) consortium, which includes local and international companies providing loan and equity funding, will take up the 75% balance of equity funding, represented by 10 directors," the proposal seen by the Independent reads.

"CSC (2016) will take over all the assets and liabilities, including foreign liabilities of CSC Limited, which is 100% owned by the state. (The) assets include the CSC headquarters building in Bulawayo, all CSC abattoirs and distribution facilities, all stateowned ranches, which will form our cattle buying operations to hold cattle for sale or slaughter and the 100% shareholdings in Super Canners and Wet Blue Industries and any related movable assets."

Manoeuvres by the consortium to assume control of CSC - once Africa's largest integrated meat processing firm - can trigger a legal battle between Boustead and the government.

With creditors now circling around the embattled state enterprise, the government in December last year placed CSC under judicial management.

Ngoni Kudenga of BDO Zimbabwe Chartered Accountants is the judicial manager.

Source - the independent