The recent revelation in Parliament that Zimbabwe mortgaged 26 million ounces of platinum, now worth US$22.2 billion, to secure a US$200 million loan from China, has left Zimbabweans asking: Who in his right mind would do that?
Even Finance Minister Mthuli Ncube was baffled when asked about this in Parliament, though Citizens Coalition for Change vice-president Tendai Biti inflated the price of platinum.
Biti assumed the price of an ounce of platinum was US$2 000, a price platinum reached only once in the last 16 years. Friday’s price of platinum was US$854.60 an ounce. The highest price for this year is US$1 153.20. The highest average price was in 2011 when it was pegged at US$1 719.03 and the highest price was in 2008 when it peaked at US$2 273.
The only plausible explanation why one would have entered into such a lousy deal is that there must have been a cut for those involved.
That is the same feeling one gets when one looks at the current Cold Storage Company-Boustead Beef deal.
It is not clear why the government, which ordered a corporate rescue of the company because Boustead Beef, which it entered into an agreement with in 2019, had failed to deliver, went on to allow the company to “rehabilitate” the plant and a whole Vice-President officially re-opened it.
The public, it appears, is being sold “bottled smoke”, as corporate rescue practitioner Vonani Majoko once said.
First, the public was told that the plant was being re-opened after 22 years. This was a blatant lie because the plant was operating as late as 2013, though at less than 10% of its capacity. The management even applied to the government to turn-around the company’s fortunes and this was approved by the cabinet. Management said it needed only US$10 million, the currency that was being used at the time, with US$5 million as working capital.
Now the public is being told that the government has entered into a US$400 million investment deal though the agreement that Boustead Beef signed with the government in 2019 was for US$130 million over five years.
The public was told that Boustead Beef invested US$24 million to rehabilitate the CSC when in fact it cannibalised parts from existing CSC operations. Besides, the plant was operational. It was only decommissioned because electricity had become too expensive for the scaled-down operations.
Common sense makes one wonder how Boustead Beef was able to invest US$24 million when it could not pay the Bulawayo City Council rates which rose to $16 million resulting in 7 properties belonging to the CSC being declared derelict in January. The properties were rescued by Majoko.
The public was told that the company had employed 169 people, including management, when the 140 or so former employees whom Boustead Beef inherited from the CSC say they are still waiting to be re-engaged.
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