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CSC in bid to recoup US$34m debt

by Staff reporter
07 May 2021 at 05:35hrs | Views
COLD Storage Company (CSC) corporate rescue manager Vonani Majoko is planning to institute legal action against the parastatal's debtors to recoup an estimated US$34 million owed it by mostly Zanu-PF bigwigs.

As revealed by the Zimbabwe Independent's CSC investigative series over the past few weeks, some of the leases have not been serviced for years resulting in the ballooning debt.

The investigation, supported by the Information Development Trust (IDT), revealed that a cast of 247 lessees, dominated by Zanu-PF top officials are in rental arrears, consequently, revenue collections tumbled from US$1,2 million to US$150 000. IDT is a non-profit organisation helping the media to probe corruption and bad governance.

With CSC now under a corporate rescue programme which will run for 60 days since the appointment of Majoko on April 2, 2021, the entity is looking to return to profitability by recouping rental arrears, among a range of strategies.

The CSC unaudited debtors' list, which was seen by the Independent, shows that Zanu-PF secretary for administration Obert Mpofu accrued US$32 273,20 as at December 32, 2017 for renting Winterblock Ranch measuring 2 000m2 under a 35-year lease agreement. The amount owed is now a subject of Majoko's verification, after which a report will be submitted to stakeholders spelling out strategies for reviving Africa's once largest integrated meat processing firm.

Majoko said those who owed CSC would be engaged while legal action remains a possible option.

Majoko said: "There is a debt that was covered by the scheme of arrangement which was US$33,1 million in 2019. However, in between, some debts arose. You now need to go through schedules and contact the people who appear on the papers to get their input.

"At this stage we have figures that are there in the report but I have not yet tested them. The people have a right to be heard before we can settle on a figure. If people owe us, we have to resort to legal process. We need to engage them; if they can come up with a plan to pay, they can pay immediately. We have to take steps, to recover as much as we can."

The corporate rescue manager, who earlier this month told this publication that there would be no "sacred cows" in his quest to recoup what CSC is owed said, among those appearing on the debtors' list, he had contacted Mpofu and Jabulani Nkomo (who took over the estate of former vice-president John Landa Nkomo).

Nkomo entered a 35-year lease agreement with CSC in 2005 for a 2 000m2 property for US$252 per month.

"For example, you phoned Obert Mpofu the other day and he said he does not owe. You also phoned Jabu Nkomo and he said he does not owe. At this stage we have figures that are there in the report but I have not yet tested them," Majoko said.

"It is a matter of public interest. I did get in touch with them and in some cases that indebtedness is disputed. So, I now have to go back to the source document. Have we done something about it, yes we have contacted them."

Other individuals on the CSC debtors' list include an M Cheda who accumulated US$9 050 in arrears for renting a property listed under Winterblock Ranch. At the same time, former CSC chief executive officer Ngoni Chinogaramombe had accumulated US$15 000 in arrears as part of his 35-year lease agreement to rent a 2 000m2 property.

Chinogaramombe, however, said he did not owe the beleaguered meat processing firm anything, highlighting that "as part of my retrenchment package I am not paying rentals anymore as from July 2019".

In an interview a fortnight ago, Chinogaramombe said he last paid in June 2019.

Mpofu also denied owing CSC.

"I do not owe CSC. What is wrong with leasing a property? If I owed them, they should have come to me. I left CSC three years ago," Mpofu told the Independent last

Under the debt owed to CSC, Majoko said a component of it was constituted by "foreign debt."

At the time of going to print, and subject to verification by the corporate rescue manager, it could not be ascertained how much constitutes the foreign debt.

In June 2017, as documents seen by the Independent showed, an account registered as WAR 001 being a "War Veterans Trust" owed US$10 346,92.

The same documents also shows that by July 31, 2019 Dumisani Edward Msika, who took over the 35-year lease agreements following the death of former vice-president Joseph Msika was owing US$2 664,80.

Msika, who was vice-president between 1999 and 2009, was renting a property also measuring 2 000m2 for a monthly fee of US$298.

To avert liquidation, CSC was placed under a corporate rescue plan, which is now led by prominent Bulawayo lawyer Majoko. As part of this running investigative series into the dramatic collapse of CSC, this newspaper on February 2, 2021, revealed how a consortium of local industrialists and companies — CSC 2016 — is angling to take over the defunct company through a US$225 million bid.

CSC 2016 was authorised by the government to evaluate assets belonging to the meat processor despite a contract still running between the state and Boustead Beef Limited.

Last month, Boustead Beef presented itself as a creditor owed ZW$3,2 billion by the state enterprise. The debt was provisionally accepted during the creditors' meeting that was presided over by the deputy Master of High Court, Rose Dube.

Documents gleaned by this publication this week show that Boustead Beef roped in Jiang Su Be Import and Export Limited of China on September 6, 2019 as a guarantor which has committed to avail €50 million (US$60 million) meant to be injected into the moribund state enterprise.

Source - the independent
More on: #CSC, #Debt, #Bigwigs