CSC creditors reject Kudenga
CREDITORS of the defunct Cold Storage Company have voted Mr Vonani Majoko of Majoko and Majoko Legal Practitioners as the new interim corporate rescue practitioner for the country’s meat processor and marketer.
Mr Majoko takes over from Mr Ngoni Kudenga of BDO Zimbabwe who was appointed the interim corporate rescue practitioner by the Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement, Dr Anxious Masuka last year.
The Minister, through a High Court application, successfully placed CSC under reconstruction interdicting creditors from attaching the parastatal’s assets.
During CSC first creditors’ meeting under interim corporate rescue held in Bulawayo before the Master of the High Court Wednesday, creditors raised concerns that Mr Kudenga’s close relationship with Minister Masuka and previous involvement in CSC presented a conflict of interest.
Creditors that attended yesterday’s meeting at the Zimbabwe International Exhibition Centre included representatives of former CSC management and workers, urban councils such as Bulawayo, Gweru and Mutare as well as parastatals like the Zimbabwe Electricity Transmission and Distribution Company, and the National Social Security Authority (NSSA), among others.
On behalf of the CSC workers, Mr Dumisani Dube of Mathonsi Ncube Law Chambers highlighted before the Master of High Court, Mrs Rose Dube, that ratifying Mr Kudenga as the corporate rescue practitioner for the parastatal presented a conflict of interest.
This, he said, was on account of the close relationship between Mr Kudenga and Dr Masuka and also their previous dealings with CSC.
In an interview after the meeting, Mr Dube said: “The Minister of Agriculture (Dr Masuka) is the one who went to Court and got the order to appoint Mr Kudenga the interim corporate rescue practitioner for the Cold Storage Company.
“But the problem is that before the Minister was appointed minister, he was the chief executive officer for the Zimbabwe Agricultural Society and he was reporting to Mr Kudenga.
“Further to that, the Minister seats on a subsidiary of Tongaat Zimbabwe called Mutilikwi and Kudenga seats on Hippo Valley,” he said.
Wednesday’s meeting, which was CSC’ first creditors’ meeting under interim corporate rescue, was aimed at receiving a report on the “reasonable” prospects of rescuing the firm and a host of other issues relating to ratifying the appointment of the interim corporate rescue practitioner of CSC in terms of Section 124 (5) of the Insolvency Act (Chapter 6:07).
It emerged during the creditors meeting that Tongaat Hullet at one time indicated keen interest to acquire CSC ranges in Masvingo.
“There is a close relationship between the Minister (Dr Masuka) and Mr Kudenga and also have previous dealings with CSC . . . we want someone who is independent from the process so that he can inspire confidence to properly turnaround the company because we couldn’t allow a situation where ‘old boys’ collate together to the detriment of a national asset,” said Mr Dube.
He said for the past seven years, he has attached CSC property and put caveats on behalf of the workers and sold three properties.
“So, it was in the interest of the workers that we need someone who is independent and credible. Also, Mr Kudenga is part of the investigations by the Institute of Chartered Accountants on how he mismanaged NSSA and other banks, so there are questions.
“We want a process where workers are paid. When the investor came in, the investor naturally assumed the credit liability of CSC . . . speaking from a straight perspective CSC is not insolvent, it doesn’t owe anyone, it’s now up to the investor to pay.”
Following the concerns raised during the meeting, the Master of the High Court disqualified Mr Kudenga as CSC interim corporate rescue practitioner before putting the matter on a vote, where Mr Majoko was announced the new interim corporate rescue practitioner.
He garnered eight votes against to other nominees Mr Philip Ndlovu of PNA Chartered Accountants and Phibion Gwatidzo of Baker Tilly who each got four votes.
The Master of the High Court, after the voting stressed that the outcome of the voting by the creditors entails that the process to rescue CSC was starting afresh.
This implies that another creditors’ meeting to save the same purpose as Wednesday’s will be called by Mr Majoko at a date to be advised.
At its peak, CSC handled up to 150 000 tonnes of beef and associated by-products annually and exported to the European Union, where it had an annual quota of 9 100 tonnes of beef.
The company used to earn the country about US$45 million per year.