Zimpapers Logo

The Government is in the process of taking over Cottco through the Zimbabwe Asset Management Company

Business Reporter—

GOVERNMENT has dissolved the Cottco Holdings board, sources privy to the development said yesterday, without providing full details of the reasons for the dissolution.The Government, which is bankrolling the contract scheme of the company is in the process of taking over the country’s largest cotton company through a debt equity swap.

While no official position could be obtained on the reasons for the dissolution of the board, chaired by Mrs Cecilia Paradza, the sources said the decision was made early this week.

“It was a high level initiative which resolved to dissolve the board and the reasons are not clear,” said one source who requested not to be named for professional reasons.

Mrs Paradza said yesterday “no communication has been made with regards the issue”.

However, The Herald Business understands that the Government was “unhappy” with the performance of the board after failing to turnaround the business despite being given support in the form of inputs.

“Now, another financial package is in place for this season and the shareholder and other stakeholders have expressed serious reservations with the current board of directors. That is how the decision was made to dissolve the board,” another source said.

There were also some divisions within the board, particularly over the fate of the acting managing director Mr Chris Murove, who is facing allegations of financial abuse and the manner the proposal by Olam International to manage the company was handled.

The Government is in the process of taking over Cottco through the Zimbabwe Asset Management Company, a special purpose vehicle owned by the Reserve Bank of Zimbabwe responsible for acquiring, managing, restructuring or disposing of non-performing bank loans.