VONANI Majoko of Majoko and Majoko Legal Practitioners has been nominated Cold Storage Company (CSC)’s interim corporate rescue practitioner, taking over from Ngoni Kudenga who was disqualified on conflict of interest allegations.
DUMISANI NYONI
Kudenga, of BDO Zimbabwe Chartered Accountants, was on Wednesday, during the CSC’s inaugural creditors’ meeting held in Bulawayo, disqualified by the Master of High Court as the meat processor’s corporate rescue practitioner.
Following his appointment, the Allied Food Workers’ Union of Zimbabwe (AFWUZ) — which represents CSC workers — questioned his competence and suitability.
AFWUZ, through its lawyers Mathonsi Ncube Law Chambers, applied to the High Court challenging Kudenga`s appointment.
The union alleged that Kudenga and Lands, Agriculture, Fisheries, Water and Rural Resettlement minister Anxious Masuka, who appointed him, were friends, business associates and cronies.
AFWUZ said when Masuka was the chief executive officer of the Zimbabwe Agricultural Society (ZAS), Kudenga was his principal as the president of ZAS.
During the CSC creditors’ meeting, the Master of High Court then disqualified Kudenga as the company’s corporate rescue practitioner, citing allegations levelled against him by workers.
The creditors then nominated Majoko to take up the position in an interim capacity, pending his confirmation by the High Court.
Contacted for comment, Majoko said: “What I can say is that there was a vote and that was the recommendation of the creditors who were present (at the meeting) who voted. But I don’t have a formal appointment as yet but, yes, that was the resolution which was passed. I have accepted the nomination and, if the appointing authority appoints me, I will accept.”
Bulawayo-based lawyer Dumisani Dube, who represented workers, told The NewsHawks that they were relieved following the Master of the High Court’s decision.
“We had complained to the Master that Kudenga has a conflict of interest stemming from his close relationship with the Minister of Agriculture, Dr Anxious Masuka. Considering the fact that before Masuka was appointed the Minister of Agriculture, he was the former board member of CSC,” Dube said.
“So, he was also responsible for running down the company. At that particular time, he was also employed by the ZAS as CEO and was reporting to Kudenga who was the president of ZAS.
“So as soon as Perrance Shiri’s demise sometime in July 2020, Masuka in his capacity as the minister goes to court seeking an appointment of his friend. Further compounded by the fact that both of them actually sit at Tongaat Hulett subsidiaries, with Ngoni sitting at Hippo Valley Estate while Masuka sat at Mutirikwi Resources board, which is a subsidiary of Tongaat,” he said.
Dube said Tongaat Hulett, through Mutirikwi Resources, expressed interest in acquiring CSC assets in Masvingo and they are currently renting the meat processor’s ranches.
“So, there it’s clear that Masuka and Ngoni are conflicted. So that was the base of our argument in terms of section 131 and 132 of the Insolvency Act. So it’s a big win for us.”
Dube said soon after Kudenga was appointed CSC rescue practitioner, Masuka directed him to report directly to him instead to the Master of High Court, further compounding the situation.
“Master of the High Court made a ruling in our favour, and then we were asked to nominate someone to take over because we cannot leave a vacuum. We then nominated Vonani Majoko of Majoko and Majoko Legal Practitioners and people voted for him,” he said.
Dube said workers were aware of the attempt to reverse the agreement which was entered by the government and Boustead Beef because even in his report, Kudenga never referred to Boustead Beef financials.
In a bid to revive the CSC, government and Boustead Beef–a United Kingdom-based investor–in 2019 signed a US$400 million agreement which also obliged the investor to use the CSC’s assets and extinguish the company’s liabilities.
“Actually, if you read the agreement which was signed, I think 28 January 2019, between the government of Zimbabwe and Boustead Beef, it means that CSC doesn’t owe anyone because Boustead Beef assumes all CSC liabilities,” he said.
“So, there is no need to actually (create) CSC as a private limited company under the business rescue because as we are speaking today, all CSC assets have been leased for 25 years to Boustead Beef. All CSC credits have been assumed by Boustead Beef. Generally speaking, the CSC balance sheet is at zero.”Asked to comment, Kudenga said he was in a meeting and could not speak.
Efforts to get a comment from Masuka were fruitless as his phone went unanswered.
On 4 March 2021, CSC workers wrote a letter to the Master of the High Court demanding Kudenga’s removal from the office of corporate interim rescue practitioner due to his conflict of interest and lack of independence in the exercise of his duties.
The workers said Kudenga was reported to the Institute of Chartered Accountants of Zimbabwe (ICAZ) by former National Social Security Authority board chairperson Robin Vela for unprofessional conduct after the court order and his appointment to the office of corporate rescue practitioner of the CSC.
The workers said Masuka was a member of the last CSC board which failed to implement the recommendations of the audit report to turn around the fortunes of the insolvent meat processor.
CSC has been struggling to sustain profitable operations over the years and faces the risk of liquidation as creditors demand their dues.
Mounting debts and accusations of poor management and alleged corruptions, among other factors, dragged the company into insolvency, with the deteriorating risk profile making it difficult to attract fresh investment or working capital.
The company has debts totalling US$42.5 million.
At Independence in 1980, the CSC was one of Zimbabwe’s major foreign currency earners, as it exported thousands of tonnes of beef to the European Union (EU).
At its peak, the beef processor and marketer used to handle up to 150 000 tonnes of beef and associated by-products annually and enjoyed an annual export quota of 9 100 tonnes of beef to the EU.
