DESPITE the appointment of a new corporate rescue practitioner, Cold Storage Company workers are in dire straits as the company struggles to pay salaries and remit pension contributions backdating to 2019 when a new investor undertook to inject at least US$130 million into the business over five years to revive the entity, The NewsHawks has established.
Once seen as one of the most viable state-owned companies, the CSC has over the years collapsed due to stiff competition and lack of capital to re-tool, among other factors. The government has over the years been making efforts to turn around its fortunes, with little success.
Former corporate rescue practitioner Vonani Majoko was relieved of his duties in July last year and was on 10 May this year replaced by Chrispen Mwete of Mwete and Company through a High Court order.
Since the removal of Majoko, workers could not pursue any litigation with regard to their salaries and pensions as they could only engage the corporate rescue practitioner.
However, CSC workers who spoke to The NewsHawks this week say their future is bleak, despite the appointment of a new rescue practitioner.
“The new rescue practitioner (Mwete) has been working for the former rescue practitioner (Majoko) who was removed on allegations of criminal abuse of office. Our problem is that they are working with the Harare guys and former employees as well as former management,” said a worker who spoke to The NewsHawks.
“As workers from Bulawayo, we are saying this guy is not fit because he was working with the same guy who was rejected by the same High Court. As workers, we are calling for a roundtable because a lot is happening. We are continuing to suffer and some of the former workers are dying.”
Workers say the new corporate rescue practitioner has been segregating workers laid off in the 2019 retrenchment, despite its nullification by the ministry of Lands.
In the letter dated 5 October 2022, the ministry of Public Service, Labour and Social Welfare said: “The Retrenchment Board did not issue any confirmation to the Cold Storage Company (CSC). There were issues raised in terms of Section 12D and 12C, hence the file was returned to CSC to rectify the anomalies.”
Workers who had pinned hopes of litigation on the corporate rescue practitioner fear losing their outstanding payments.
“Therefore, we would like a meeting between old investor, the current ministry, the Ministry of Lands and other issues they want to incorporate to the corporate rescue then we map the way forward so that CSC can be revived, with all stakeholders in place. As we speak now, we are being owed money for the past years. It was like a dummy retrenchment and who is going to give us that money?”
However, the new practitioner says his relations with the company workers have been good since he began working on the company.
“My relationship with the workers since coming to the company has been good. Yesterday, I held a meeting with workers from Bulawayo, telling them about their plight and my position, which includes a pending court case.
“There are problems that need to be solved first. For example, there already is a pending case before the courts whereby one of the creditors filed for my removal 10 days after my appointment.
“And so, it is difficult for me to make plans right now until the court case has been settled. If I make promises on my plans to turn around the company, I would end up being a liar, because it is not yet clear whether I am going to be corporate rescue practitioner,” Mwete said.
CSC-Boustead Beef workers’ pension fund is already 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.
In 2018, the National Social Security Agency (Nssa) expressed interest to become an equity investor and 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 fund remittances by 2018, according to the High Court order of agreement.