Fight for CSC is more for its US$100 million assets than reviving operations

“The Hon. Member wants to know whether or not we have failed to do the sufficient due diligence before a partner comes on board.  Mr. Speaker Sir, the simple answer is no, we have not. However, to clarify that further, I think certain aspects of that agreement were premised on certain preemptive processes that were time bound and that did not happen, which I think Government did the right thing to proactively look and see at if these preemptive processes have not been fulfilled in the first year or so – what is the likelihood that the performance parameters in year 2022 could be fulfilled.

“So I think Government ought to be applauded for having reacted this fast to begin the process of reversing this process before we went far in it and saying the partner can you do more.  So I think the Government has capacity to vet possible partners and Government has done the right thing. Very soon Government will be able to indicate the way forward so that CSC can play its rightful role.”

Although the government appointed a corporate rescuer for the CSC in December 2020, Boustead Beef is still running the show. Ngoni Kudenga, who was appointed the first rescuer never did the job after he was disqualified by the creditors who cited conflict of interest because of his business relationship with Masuka.

Boustead Beef also filed a claim as one of the creditors, something that baffled government officials who thought it was their partner.

Kudenga was replaced by Vonani Majoko but he was removed on 7 July this year. His operations, Majoko claimed, were paralysed by Boustead Beef because it refused to cooperate with him.

Majoko said Boustead Beef collected 70% of the rentals from CSC properties and he collected only 30%.

Boustead Beef, which claimed that it was refurbishing the Bulawayo factory, invited Vice-President Constantino Chiwenga to officially commission the plant in August this year but this turned out to be a sham.

The company has not resumed full operations up to now but announced in November that it had entered into long-term partnership with a United States investor, Ethos Asset Management ro revive the CSC.

Though no figures were mentioned then, a report in the Independent last week claimed that Ethos was planning to invest US$100 million with the first US$20 million expected this month but this had been scuttled because of squabbles with Majoko.

There are fears that Boustead Beef might have used CSC assets as collateral for the Ethos financing as they are worth the amount Ethos is said to be planning to invest.

Some of the title deeds are, however, held by local banks as collateral.

It is not clear how much the CSC debt now is but it  was US$42.5 million when the government entered into agreement with Boustead Beef.

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