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Exposing government links with mysterious FSG company

26 Aug 2019 at 20:36hrs | Views
It seems Parliament has a knack for asking all the right questions when it comes to Fertiliser, Seed Grain (FSG) private limited. Investigations have revealed that the company is located at number 75a Kew Drive has an unexplained military presence outside it's complex. The presence of the military has fuelled speculation that it could be a joint venture with the army or at worst top military brass could be in bed with Fertiliser Seed and Grain.

The FSG story

Established in 2010 as a family business and  small-scale importer of finished fertilizers, FSG has blossomed in its nine-year lifetime. Today FSG stands as a leading manufacturer of fertiliser in Zimbabwe, committed to supplying farmers large and small with high-quality products.

FSG's success is, in part, thanks to the intervention of the Zimbabwean government who have shown strong commitment to making the country self-sustainable in food production. A few years ago the importation of finished products was disallowed, with all blends required to be manufactured locally. At this time FSG took the opportunity to grow its production facilities. From its early days of importing finished blends, FSG went on to purchase a large property, formerly a cotton factory, in Bindura. In 2014 they went on to erect a small bulk blending plant, enabling the company to blend its own fertilizers. The blending plant has grown over time, and with the addition of a continuous blender and current installation of a granulator the factory churns out 1,000 tons of fertiliser a day.

FSG is producer of the Meridian Group's flagship fertiliser brand Superfert Fertilizer, which is produced and sold across the region through plants in Malawi, Mozambique and Zimbabwe.


FSG and controversy

FSG seems to find itself at the center of controversy involving large sums of money. In 2018 FSG managing director, Steve Morland was questioned by Parliament over how his company got a contract to supply fertiliser to the presidential input scheme, legislators suspected that the company had been offered special treatment and tender procedures floated to sweeten the deal in favour of FSG.

Veteran parliamentary reporter Veneranda Langa covered the proceedings and reported that Morland appeared before the Parliamentary Portfolio Committee on Agriculture which was chaired by vocal and business savvy MP Justice Mayor Wadyajena. During the proceedings MPs claimed FSG fertilisers were being sold at retail price rates instead of producer rates.

Wadyajena asked the FSG Managing director to explain how he was chosen to supply the presidential input scheme with fertilisers and agro-chemicals, a contract worth $69 775 000.

In response Mr Morland informed MPs that they had submitted a proposal to supply the presidential input scheme with fertiliser to the Reserve Bank of Zimbabwe [RBZ], and were identified by the RBZ because they are a fertiliser company and they were looking for fertiliser," Morland said.

Mr Morland insisted that he was invited to meet RBZ governor, John Mangudya to discuss the issue at the RBZ after he had submitted his proposal.

However, MP Justice Wadyajena would have none of it and insisted that FSG were handpicked without following proper tender procedures.

In his defence FSG MD said he was only asked to supply a proposal detailing what he could do in terms of supplying fertiliser, delivery and payment plans because our core business is that the supply seed and fertilisers.

Mr Morland himself is no stranger to controversy and the courts. In 2016 Mr Morland was in court on behalf of FSG and he obtained a writ of execution from the court seeking to attach a Chitungwiza based Nico Orgo Zimbabwe's property in a bid to recover over $2,4 million owed in a botched fertiliser deal. The deal had been a verbal deal with no written terms. The deal went bad and exposed FSG to massive financial losses.

Fast forward to 2019 FSG finds itself in the headlines again and at the centre of controversy. FSG is alleged to have received 400 million from the government under the Command Agriculture program. The government only had 294 million allocated to it for agriculture and yet managed to payout 400million to a single entity. This didn't go down well with the chairman of the Public Accounts committee Hon Tendai Biti. The government was in violation of Anti Money Laundering statutes by paying money to a client they do not know. Know Your Client is a basic rule of financial due diligence and it is global standard practice.  "Know Your Customer" is a process by which entities obtain information about the identity and address of the customers. This process helps to ensure that financial services are not misused. Hon Tendai Biti asked officials if they were sure they were not funding AL Qaeda via this bogey entity known as FSG. The KYC procedure is to be completed by entities while opening accounts and also periodically update the same. How can officials pay 400 million to a company they know so little about?


Conclusion

The FSG saga if followed to its logical conclusion will suck in Reserve Bank Governor Dr John Panonetsa Mangudya who is already at the centre of the FSG scandal from 2018 parliamentary records.  Dr Mangudya has already been accused of corruption by the ZANU PF youth league and this might be the last nail to the Mangudya public coffin.

Tomorrow's installment will seek to interrogate the role of certain key political individuals in the FSG and Command Agriculture saga. It will also unpack the devil in the details of the FSG saga and John Mangudya.

Nicholas Ncube is a writer, blogger and lover of things based in Ontario Canada

 





Source - Nicholas Ncube
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