RBZ Freezes Nestlé Accounts

THE Reserve Bank has reportedly frozen Nestlé Zimbabwe’s bank accounts and ordered a forensic audit into its dealings, amid reports that government was hitting back on the firm after its decision to stop buying milk from a farm owned by the first lady Grace Mugabe.

Central bank governor Gideon Gono last night confirmed the bank was probing the company on “two transactions”.
There were two or so transactions which were made which we thought were irregular,” said Gono. “These have been explained and things are back to normal. We have to be on the look out for any irregular transactions.”
Gono said the probe had nothing to do with the Nestlé’s decision to stop buying milk from Mugabe’s farm.
“It (the probe) has nothing to do with anything. We do that all the time where we think that there are irregularities,” he said.
However sources at Nestlé Zimbabwe told businessdigest last night that two of their five banks had confirmed receiving directives from the central bank to freeze the accounts pending forensic audits.
The company, the sources said, had been under pressure from various quarters since its announcement last week that it had stopped buying milk from Arda Gushungo — a farm owned by Grace.
“We use five banks and we were today (yesterday) informed by two of them that our accounts had been frozen on the instructions of the Reserve Bank of Zimbabwe,” a senior official at Nestlé Zimbabwe said. “We understand the bank intends to carry out forensic audits. The bank is yet to inform us on their decision to freeze our accounts and the nature of the probe they intend to undertake.”
The sources said a senior government official (name supplied) on Monday phoned the company and told the firm that its decision to stop buying milk from Grace’s farm was an “extension of European Union and the United States sanctions on the first family”.
The suspension of the company’s accounts, the sources said, would lead to a delay in payment for milk deliveries and it also means that the firm will not be able to use the money in their accounts without the approval of the central bank.
This would cripple the operations of the company.
“The decision to stop accepting milk from Arda Gushungo has been viewed by certain individuals as an extension of sanctions to the first family and they may now want to get angry on behalf of the first family,” another source said. “We are sure that this is aimed at crippling the operations of the milk processing company.”
A number of accusations have been made against the company including allegations that it was only accepting milk from white farmers and shunning new black farmers.
However, it is reported that the company’s largest supplier of milk is Lovemore Mugabe, a black Wedza farmer who is not related to the president though.
Nestlé Zimbabwe accepted milk from a sizeable number of farmers last year after other players in the sector had failed to pay for milk delivered which posed a threat to the survival of the milk sector in the country.
Their acceptance of milk from these farmers was done to save the industry and it was not a permanent arrangement.
While the issue may have started as a political one, there are likely to be economic interests from certain individuals who may be seeing an opportunity pounce on the company.
This is a company that won the 2009 Confederation of Zimbabwe Industries exporter of the year award and there are suspicions that monetary authorities may want to look at loopholes pertaining to remission of foreign currency.
Nestlé Zimbabwe is a wholly owned subsidiary of Nestlé which is headquartered in Switzerland.
The Swiss Confederation on the behalf of the milk processing company 13 years ago entered into a bilateral agreement with the government of Zimbabwe.

 

 

Leonard Makombe