CSC rescuer booted out

Lawyer Vonani Majoko has been removed as corporate rescue practitioner for troubled meat processor, Cold Storage Company (CSC) with immediate effect.

Majoko was appointed in April last year, taking over from Ngoni Kudenga of BDO Zimbabwe Chartered Accountants who had been disqualified on conflict of interest grounds.

According to a High Court order dated July 7, 2022, Majoko was ordered to return CSC books of accounts to the Deputy Master of the High Court.

“The respondent, Vonani Majoko be and is hereby removed as corporate rescue practitioner for the Cold Storage Company Pvt Ltd with immediate effect,” said the order signed by High Court judge Justice Jacob Manzunzu.

“The first respondent, Vonani Majoko be and is hereby ordered to return all books of accounts, rentals remitted to him, a detailed account of all the amounts remitted to him, keys to all Cold Storage Company premises and any property belonging to the Cold Storage Company to the third respondent, the deputy master of the High Court, within seven days of this order. There be no order as to costs.”

An application for his removal was made by Boustead Beef, a company that is currently working towards the revival of CSC in a joint venture (JV) with government.

Government was a 100% shareholder in the business until the changes.

The JV was signed in 2019 and will run over 25 years.

Under the deal, Boustead would assume control of CSC’s ranches and meat processing facilities across the country, along with managing distribution centres and residential properties in Harare, Gweru and Mutare.

However, in the founding affidavit accompanying his court application seeking to place CSC under corporate rescue proceedings in 2020, Agriculture minister Anxious Masuka said the livestock joint farming concession agreement between the government and Boustead was difficult to implement because creditors were threatening to attach CSC assets.

Former employees had, meanwhile, destroyed important documents.

Masuka said creditors, including Zesa Holdings, National Social Security Authority and the urban councils of Bulawayo, Harare and Chinhoyi had laid siege on CSC, demanding immediate settlement of debts, while disconnecting water and electricity services.

CSC was placed under corporate rescue proceedings in 2020.

But there have been clashes between Boustead Beef and Majoko as a result of Clause 4 of the JV agreement and Section 133 of the Insolvency Act No. 7/2018.

In terms of Clause 4 of the JV agreement, Boustead was expected to manage the LJFC, run and operate the entire business unhindered by CSC and other government departments, with the freedom to make all decisions.

In terms of Section 133 of the Insolvency Act, the rescue practitioner has full management control of the company.

Provisions of the Act and of the JV agreement have not been compatible, resulting in the clashes.

The CSC owns land and properties all over the country, which could be leveraged to raise capital to finance the company’s turnaround.

Majoko said it has not been possible to leverage CSC land to raise capital, either by way of sale or by way of collateral.

In a letter dated November 22, 2021 directed to the Agriculture ministry, Majoko expressed concerns over considerable and unresolved overlap between his functions as the corporate rescue practitioner and the management of CSC, which has been entrusted to Boustead Beef.-newsday