Saturday, 30 July 2022


The Cold Storage Company (CSC) business rescue practitioner Vonani Majoko has been removed from position for failing to come up with a turnaround strategy.

The High Court ordered the removal of Mr Majoko following an application by Boustead Beef.

The UK-based investor, Boustead Beef, entered into a 25-year joint venture agreement with the Government in January 2019 to revive CSC, but the parties jointly filed for corporate rescue in December 2020 after some creditors sought to file for liquidation.

Mr Ngoni Kudenga, of BDO Chartered Accountants was initially appointed corporate rescue manager before he was disqualified on the basis that he was conflicted.

Mr Kudenga was disqualified by Rose Dube (Additional Master) because of his previous association with Lands, Agriculture, Water, Fisheries and Rural Development Minister Dr Anxious Masuka.

Mr Kudenga is the president of Zimbabwe Agriculture Society while Dr Masuka was the chief executive prior to his appointment.

Mr Majoko was then appointed CSC interim corporate rescue manager. Boustead cited Mr Majoka as the first respondent and the Ministry of Lands, Agriculture, Water, Fisheries and Rural Development was cited as second.

“Vonani Majoko is hereby removed as corporate rescue practitioner for the Cold Storage Company with immediate effect,” said the High Court in a July 7, 2022 ruling.

In its court application, Boustead said Mr Majoka  had become unsuitable to act as Corporate Rescue Practitioner for the Cold Storage Company as he had been incompetent, and failed to perform his duties.

“He failed to cause the corporate rescue plan to be published within forty-five business days after the date on which he was appointed.

“He failed to consult with creditors, other affected persons, and the management of the Cold Storage Company (Private) Limited and thereafter prepare a corporate rescue plan for consideration and possible adoption.

“He failed to convene and preside over a meeting of creditors and any other holders of a voting interest for the purpose of considering the corporate rescue plan.”

Boustead said due to the absence of the corporate rescue plan, Mr Majoko “is not aware of all the material assets of the company, as well as knowledge on which assets were held as security by creditors when the corporate rescue proceedings began.”

Boustead said the corporate rescue proceedings were not permanent as they were a measure for the temporary supervision of a financially distressed company to bring it back to viability.

“It has been over twelve months since the first respondent was appointed Corporate Rescue Practitioner for the Cold Storage Company (Private) Limited.

“During this time, the first respondent has not paid any attention to his duties and obligations as Corporate Rescue Practitioner. His actions are defeating the objectives of corporate rescue.”

Corporate rescue involves, inter alia, temporary supervision and management of the company by a corporate rescue practitioner, a temporary moratorium (relief) on the rights of creditors against the company, and the development of a plan to rescue the firm.

CSC had enjoyed a monopoly since 1937 when it was formed. But the Government deregulated the industry in 1992, which resulted in serious competition from private players, plunging CSC into a viability crisis following sharp decline in cattle throughput.

A year later, the company had lost 50 percent of its market share to private players.

The Government did not foresee the implications of liberalising the industry as CSC had not been financially capacitated to stand competition from private players.

Since 1992, CSC largely survived on EU exports and had a US$15 million revolving payment facility with the bloc.

The facility was discontinued after the EU suspended imports in 2001 following an outbreak of foot and mouth disease.

CSC had an annual quota of 9 100 tonnes and used to earn at least $45 million per year from the EU export quota.

Efforts by the company to enter Asian markets did not succeed after some food safety standards concerns were raised.

The company, which owns four abattoirs used to employ 1 500 permanent workers and an average 700 casual workers, making it one of the biggest employers in the country. Herald


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