CSC Boustead Beef workers’ pension fund is in a shambles after the company’s anchor shareholder failed to honour part of its obligation to inject US$290 000 into the financially beleaguered entity.
After undertaking to shore up the CSC, a loss-making parastatal, United Kingdom-based Boustead Beef undertook to capitalise the company’s pension fund in line with an agreement with a Joint Farming Concession Agreement (LJFCA) with the government.
The company, which promised to inject US$130 million in five years from 2019, has injected little capital into the venture, with workers and pensioners failing to access outstanding remittances and pensions.
In 2018, the National Social Security Agency (Nssa) expressed interest, as an equity investor, to inject up to US$14.3 million that would see the revival of the CSC. However, the state-run social security agency ceased to be part of the venture in 2019.
After taking over the CSC in 2019, Boustead Beef was obliged to pay outstanding salaries and pensions owed to the company’s workers as agreed in the LJFCA signed in January 2019 between the company and the ministry of Agriculture.
According to the agreement, Boustead Beef would: “Takeover and retire the entire inherited CSC legacy debt as outlined in the High Court of Zimbabwe case number 3099/17, scheme of agreements as per the negotiated payment plan.”
With accumulated debt of over US$33 million since 2009, the CSC owed its current employees US$2 074 948 in salaries and US$4 443 104 in pension funds by 2018, according to the High Court order of agreement.
Workers’ committee members who spoke to The NewsHawks said Boustead Beef has failed to inject money into the pension fund, leaving the workers stranded.
“There are outstanding salaries and remittances that are yet to be paid. Those things have not yet been done. As we speak, our pensioners are getting nothing at all, but they were contributing to Old Mutual and MARSH, among others, but nothing has been done.
“We would call it the Nssa scheme, since it was going to be used by Nssa when it took over as investors. However, Nssa was booted out following the ouster of the late former president Mugabe.
“So Boustead Beef rode on the scheme, but never followed it as it were. They also failed to follow the correct procedure as stipulated in their joint venture agreement,” the workers said.
In the employees’ scheme of 2018, the CSC proposed to pay employees and the pension fund in full, which meant Boustead Beef was supposed to assume the debt.
“CSC shall have a ten-month moratorium on payments to current employees. CSC shall pay US$290 000 into the pension fund at the commencement of the restructured operations and the Applicant shall thereafter have a ten-month moratorium on payments to the Pension Fund.
“Thereafter, CSC shall pay current employees the sum of US$2 074 948 over a period of 54 months, shall pay the Pension Fund the debt of US$4 153 104 over a period of 120 months towards arrear pension contributions and Pension Fund shortfall,” read the agreement.
Boustead Beef has also retrenched CSC workers, despite the ministry of Labour’s Retrenchment Board signalling the move as illegal.
This is not the first time Boustead Beef has violated the LJFCA.
Last year, while officially re-opening the beef processing plant in Bulawayo, Vice-President Constantino Chiwenga praised the company for injecting US$24 million. Even if this amount were true — which is disputed by workers — it would fall far short of the agreed capital injection.
According to the agreement, the investor was supposed to raise and invest a minimum of US$130 million in the project over five years, being for both capital expenditure and working capital to run the business.
Total investment in year one was supposed to be US$45 million, broken down as follows: refurbishment of abattoirs, canning factory, distribution (US$6 million), working capital abattoirs, canning factory, distribution (US$5 million), logistical fleet, vehicles, distribution abattoirs (US$2 million), information technology systems or meat matrix or stock control (US$3 million), external cattle purchase facility (US$5 million), external buy-back facility for processed beef (US$5 million, capital expenditure ranches and feedlots (US$4.5 million), working capital ranches and feedlots (US$3 million) logistics fleet ranches, cattle purchase (US$10 million).