ZIMBABWE’S cotton players have taken steps to stop a Chinese firm from using political muscle to clandestinely purchase cotton from farmers contracted by local industry.
In court papers lodged with the High Court, the Cotton Ginners Association of Zimbabwe (CGAZ) accused Sino-Zimbabwe Holdings of using “political gurus” — including Zanu PF ministers and party youths — to buy the crop from farmers contracted with members of the CGAZ.
The CGAZ represents the interests of local companies involved in the production and buying of seed cotton as well as the ginning and marketing of the crop.
Sino-Zimbabwe rejects the claims that it is using political influence to hijack local firms’ investments with farmers as misleading the court.
Sino-Zimbabwe is accused of working with politicians to reap “where it did not sow”, by inducing farmers to ditch CGAZ members who paid for inputs for farmers under special contracts.
The company’s actions are allegedly in violation of statutory instruments gazetted last year to regulate trading of the crop.
CGAZ made an urgent application on July 16 to the High Court to stop Sino-Zimbabwe from using what the organisation said amounted to unfair business practice.
High Court judge Lavender Makoni, however, on Wednesday dismissed the CGAZ application as not urgent.
In his founding affidavit, CGAZ director-general Godfrey Burumbo-Buka represented by Scanlen & Holderness law firm accused Sino-Zimbabwe Holdings of buying cotton at inflated prices from growers who signed contracts with CGAZ members throughout the country.
The organisation, which includes firms such as Cotton Company of Zimbabwe and Quton, say because of the political interference, the police had become “hopeless” and could not be relied upon to take action.
Among those named in the CGAZ court papers are Minister of Indigenisation Saviour Kasukuwere, Minister of Infrastructure and Transport Nicholas Goche, Zanu PF Mashonaland Central provincial chairman and MP for Mt Darwin North Dickson Mafios, and Police Assistant Commissioner Martin Kwainona.
They are accused of spearheading Sino-Zimbabwe operations.
Buka said Sino-Zimbabwe Holdings was operating in Gokwe, Kadoma, Mhangura, Mount Darwin, Bindura, Guruve, Mutoko and Raffingora.
An annexure to CGAZ court papers alleges that Sino-Zimbabwe Holdings “invaded” Cotton Company of Zimbabwe’s Bindura business unit on July 4 with the help of politicians.
“These include Honourable Kasukuwere who had a meeting at Tabex in early July updating the farmers of the coming in of a better paying company. This was followed with a series of meetings from Mr Goche at Madziva, MP Mafios at Mukumbura (Kamutsenzere area) and Kwainona at Bveke,” read the court papers.
“The permanent presence of Mr Kwainona (Presidential bodyguard) at Bveke resulted in it being the epicentre of the resistance and spilled into all other areas in Mt Darwin and Rushinga.”
CGAZ alleged that the situation was worsening in Raffingora and Guruve.
“The community and the party (Zanu PF) have taken charge of the cotton business. They continue to operate away from the common buying points and their points are a no go area as they are guarded by youths. The police are hopeless as they are literally seen moving in Sino-Zimbabwe trucks.
Police claim they cannot do anything as they are still waiting to be advised of a way forward from the top.
“In supporting the farmers, members (of CGAZ) have spent considerable financial and technical resources as part of an investment in the industry. In return the applicant’s members are contractually and legally entitled to purchase the cotton seed from the farmers,” argued Buka.
He said that the contracted growers were obliged to sell their cotton seed to the company that supported them in terms of the contracts and in terms of Section 14 of Statutory Instrument 142 of 2009.
Members of CGAZ are all signed up as contractors and buyers with the Cotton Marketing Technical Committee in terms of the law.
The provisions of the law state that seed cotton produced by a grower in terms of a contract with a company can only be sold to the contracted company.
“Respondent is blatantly violating the law and inducing the contracted growers to breach their contracts with applicant’s members. It is openly buying cotton seed from contracted growers who have contracts with applicant’s members,” reads the court papers.
“It is clear from the reports that respondent is violating the law by buying cotton seed from contracted farmers, emptying seed packs provided by applicant’s members, and not grading the cotton seed being purchased.”
Buka said attempts by the Cotton Marketing Technical Committee, which wrote a letter to Sino-Zimbabwe on July 7 and conducted a hearing with Sino Zimbabwe on July 9 “to stop its illegal acts” have been unsuccessful.
Sino Zimbabwe Holdings, however, rubbished CGAZ’s accusations, arguing in an opposing affidavit that the applicant “is scared of competition” and was abusing the courts.
Director Jimmy Zerenie said Sino-Zimbabwe Holdings had “not induced anyone” to do business with it and had not purchased any contracted cotton.
“The applicant has various other remedies available to it which includes but not limited to suing for breach of contract if there is such a breach between applicant and its contracted farmers.”
“The First respondent has not induced any contracted growers to breach the law. If anything, the first respondent has complied with the law and has operated in a very transparent way,” read Zerenie’s affidavit.
He said the application was misleading the court and that there was no evidence placed before the court to substantiate the allegations of political interference.
“The respondent has not committed any criminal offence, hence the police have not acted on the report,” said Zerenie who is represented by Chinamasa, Mudimu & Dondo legal practitioners.