CREDITORS of the defunct Cold Storage Company (CSC) are concerned about whether the joint venture agreement between the Government and a United Kingdom investor, Boustead Beef still exists or has fallen through.
This emerged during the company’s first creditors’ meeting
under interim corporate rescue held in Bulawayo last Wednesday after Boustead
Beef, through their representative Mr Nick Havercroft, represented his
organisation as a creditor.
In January 2019, the Government through the Ministry of
Lands, Agriculture, Fisheries, Water and Rural Resettlement entered into a
25-year joint venture agreement with Boustead Beef.
However, during last week’s meeting where the former CSC
interim corporate rescue practitioner, Mr Ngoni Kudenga of BDO Zimbabwe
Chartered Accountants presented his report, before his rejection by creditors,
Boustead Beef presented themselves as a creditor whom CSC owed ZWL$3,2 billion.
The debt was provisionally accepted during the creditors’
meeting that was presided over by the Master of High Court, Mrs Rose Dube.
“Now that you (Mr Kudenga) are taking control of management
and Boustead Beef’s position in that joint venture agreement that takes over
operations at CSC, has that agreement been altered or qualifying Boustead Beef
not as an investor because there is nothing relating to the investor that has
been mentioned in that report,” said CSC former workers representative, Mr
Ishmael Muzuru.
Mr Kudenga who was appointed CSC interim corporate rescue
practitioner by Lands, Agriculture, Fisheries, Water and Rural Resettlement
Minister, Dr Anxious Masuka last year, was rejected by the creditors following
a High Court challenge by CSC former workers who were represented by Mr
Dumisani Dube of Mathonsi Ncube Law Chambers.
During the meeting, the creditors voted in favour of Mr
Vonani Majoko of Majoko and Majoko Legal Practitioners as the new interim
corporate rescue practitioner.
The ex-CSC employees argued that because of his close
relationship with Minister Masuka and previous relationship with CSC, Mr
Kudenga’s appointment presented a conflict of interest and thus someone
“independent and credible” should take over.
Minister Masuka placed CSC under reconstruction last year
and Mr Kudenga was mandated with the overall responsibility of avoiding
liquidation of the parastatal while ensuring it remains in a solvent state for
the benefit of the company’s stakeholders, creditors including the company’s
workers.
Another creditors’ representative said: “Your interim
report to us, it looks like it’s denying the existence of a legal document
(joint venture agreement), the shareholder (Government) is saying that the
joint venture agreement has not been invalidated, but in your report, there is
no mention of how you are working with this investor (Boustead Beef) to
resuscitate CSC.”
Given the above context, the creditors said this implies
that the two entities were independent of each other despite committing
themselves into an agreement to resuscitate operations at CSC.
Among others, CSC creditors included urban councils such as
Bulawayo City Council, Chinhoyi Municipality and Gweru City Council as well as
the Zimbabwe Electricity Transmission and Distribution, and the National Social
Security Authority.
The creditors said Mr Kudenga seemed to have general
knowledge of the assets CSC has and did not know how much Boustead Beef has
invested into the parastatal.
A legal officer from the Ministry of Lands, Agriculture,
Fisheries, Water and Rural Resettlement, Ms Chenayi Garise, said as far as they
understand the CSC-Boustead Beef agreement was still in place.
“As far as we understand, the joint venture agreement is
still in existence and binding. Boustead Beef has not come to us to say the
deal is no longer in existence,” she said.
The joint venture agreement is a US$400 million deal
between CSC and Boustead Beef. Under the arrangement, the investor is required
to inject a minimum of US$130 million over five years for the revival of
operations at CSC.
During the proceedings and before the voting was done to
elect a new interim corporate rescue practitioner, the Master of High Court
requested Mr Kudenga to investigate why Boustead Beef presented themselves as a
creditor, that information he was supposed to present at the next meeting had
the creditors ratified him as the corporate rescue practitioner.
Under the joint venture agreement, Mr Kudenga said, CSC
assets still belonged to the parastatal.
“The information is there and the assurance is that the
assets still belong to CSC,” he said, during the meeting.
Mr Kudenga told the creditors that during the short time
they have worked together with Boustead Beef, they had “problems” which needed
to be looked at.
“Within the short time that we tried to work together, we
had problems and it’s an issue that still has to be looked at.
“If you look at some of the terms that have been given to
us, the issue of Boustead Beef agreement . . . ,we are supposed to look at the
agreement and also verify the investment that was put by Boustead Beef,” he
said.
“And at the end of the day, also look at the
recommendations whether to continue or to modify the way we are going to work
together…so, we still have to look at the agreement with Boustead Beef.”
In an interview after the creditors’ meeting, Mr Muzuru
expressed gratitude over the latest development saying it was their hope that
the new interim corporate rescue practitioner moves with speed to ensure they
are paid their dues which are long overdue.
“We are happy because we wanted someone who is independent
and credible. It’s us who have instructed Mathonsi Ncube law firm to actually
challenge this because of the interest harboured by the one who was going to be
appointed as the corporate rescue practitioner.
“We are expecting that he (Mr Majoko) comes in very soon
and assist because the workers have suffered for a long time,” he said. Chronicle
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