HomeBusiness DigestTextile Workers Seek Court Intervention

Scepticism over govt’s rights move

DAVID Whitehead Textiles Ltd (DWTL) workers want the High Court to place the company under judicial management for the second time to save their jobs and the firm from collapsing.

In a letter to the Zimbabwe Congress of Trade Unions (ZCTU) the workers asked the umbrella labour body to approach the High Court to have the company under judicial management.

If the High Court application is made and succeeds, it would be the second time for DWTL to be under judicial management.

In May 2006, the High Court placed the company under judicial management after it experienced a severe liquidity crisis precipitated by undercapitalisation and corporate governance shortcomings.

In the letter to ZCTU dated December 21 2009 signed by workers representatives from the company’s three manufacturing divisions and sales outlets, the employees cited power struggles, alleged incompetence, empty promises and unfavourable working conditions as the reason why DWTL should be placed under judicial management again.

The three manufacturing divisions are Fabric Division in Chegutu, Yarn Division in Kadoma and Hosiery Division in Gweru.

“DWTL is a viable company if properly managed. The employer has proved that he cannot even run half machinery,” reads the letter. “Instead, the employer is busy creating scrap out of running machinery for sale so that he could make money quickly and enjoy the proceeds. All the three manufacturing divisions in Gweru, Kadoma and Chegutu had order books full in 2009, but because of bad governance they failed to deliver to their customers locally and abroad.”

The letter said DWTL has been failing to pay most of its employees for the past eight months.

“All the three manufacturing divisions were reduced to ghost zones such that if you do not walk vigilantly you can easily be attacked by snakes in the plants — the same applies to Bulawayo and Harare. DWTL is rated as a giant company such that without its presence in Kadoma and Chegutu we cannot talk of the two towns,” it said.

Interested parties in DWTL differ on how to rescue the country’s largest textile firm.

Executive director Andrew Toendepi who is also a major shareholder with 51% is proposing that the textile company raise capital through disposal of some assets and retrenchments to fund operations as the company was failing to borrow money on the market.

Ex-judicial manager Cecil Madondo however said it was not proper for Toendepi to liquidate “a public company of national strategic importance without a High Court order”.

He said there was no production at the company because the “company was heavily undercapitalised and did not have any working capital”.

“What is required are people well versed in the textile industry to run the company,” Madondo argued. “A credible investor with at least 51% controlling stake to recapitalise the business, establish effective corporate governance structure and appoint a competent and qualified board of directors and the company will roar back to life”.

The letter said workers closed for the annual festive season after being paid US$50 per employee without a bonus.

The letter alleged that Toendepi frustrated DWTL’s first CEO George Maulidi to resign in January last year.

His successor, a C Maswi, also left the company on July 31 2009. In a memorandum dated July 17 2009, Toendepi told general managers that he had taken over the role and functions of CEO with immediate effect.

“Does the Companies Act Chapter 24:03 require a major shareholder to convert himself and operate as CEO? How can a company have checks and balances if he is the chief executive?” the workers questioned in the letter.

Toendepi is also said to be the chairman of the group’s works council.


Paul Nyakazeya

Recent Posts

Stories you will enjoy

Recommended reading