Boustead Beef, which entered into a US$130 million joint venture agreement with the government to revive the Cold Storage Company at the beginning of 2019, blocked Ngoni Kudenga who was appointed the company’s corporate rescue practitioner in December last year from accessing the CSC’s financial records.
Instead, the Boustead Beef with the help of lawyer Dumisani Dube pressed for Kudenga to be disqualified citing conflict of interest and they won with Vonani Majoko being appointed to replace him.
The government placed the CSC under corporate rescue after realising that Boustead Beef had failed to meet terms of the joint venture agreement and wanted “to ensure that creditors would be dealt with and no assets would be lost to litigation”.
According to the minutes of the CSC creditors’ first meeting on 31 March, Kudenga said he was not able to get the CSC’s financial records beyond June 2019.
He said he made efforts to get the financial information of the CSC but was blocked by Boustead Beef due to a misunderstanding as to his role as the corporate rescue practitioner.
Kudenga’s role was, however, clearly spelt and widely publicised in the media, and was:
- to investigate the company’s affairs, business and property and financial situation in terms of Section 134 of the Insolvency Act;
- investigate previous CSC operations and expose the weaknesses within the systems and recommend possible solutions;
- investigate adherence to corporate governance principles and recommend aspects that require strengthening;
- confirm the number and status of the properties and ascertain the status of all CSC assets;
- investigate claims of asset stripping or any other activities and institute measures to stop the asset stripping immediately;
- examine the Scheme of Arrangement and recommend appropriate measures;
- investigate the employment and dismissal of employees from the date the Joint Venture was signed;
- examine and recommend Pension benefits due to the employees;
- examine Boustead Beef (Pvt) Ltd’s current operations (investments made and operational initiatives implemented since the signing of the agreement) and establish whether or not it has capacity to revive CSC and advance the Livestock Growth Plan.
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