Investor rejects govt’s CSC board

THE National Social Security Authority (Nssa) is finalising a business plan that will determine how the Cold Storage Company (CSC)’s new board will be structured as it prepares to invest US$18 million into the firm which was set to resume normal operations this month.

By Hazel Ndebele

Nssa in May rejected a 12-member CSC board which was appointed by government in April, saying it would only inject new money into the company once the board has been dissolved and a new, inspiring line-up put in place.

Nssa then said it was not convinced that the board appointed by government had what it takes to turn around the parastatal in which government is the sole shareholder. The board set tongues wagging soon after it was appointed as there was a feeling that it was chosen on patronage basis rather than ability and merit.

Most of the board members are related, in one way or the other, to Zanu PF and government bigwigs.

Nssa intends to recapitalise the CSC in an equity investment deal.

In e-mailed responses, Nssa acting chief executive Emerson Mungwariri said: “We are in the process of finalising the business plan that will determine how the board will be structured. In the business plan will be a road map that will cover a number of key milestones which need to be achieved prior to injecting capital into the business.”

Mungwariri said before pumping in money there was need for an endorsement of the creditors’ scheme of arrangement by the Master of the High Court as well as conducting a due diligence and valuation exercise on the company.
The Zimbabwe Independent is also reliably informed that making key changes to the CSC board is part of Nssa’s demands.

“Once these milestones have been achieved and the final shareholders’ agreement has been signed off, Nssa will recapitalise the business by injection of capital,” said Mungwariri.

CSC was one of Zimbabwe’s most strategic assets in the 1990s, earning the country at least US$45 million annually before its collapse. It is currently operating under 10% of its capacity and reported to be making annual losses in the region of US$6 million.

In an interview with this paper this week, Agriculture Deputy minister Paddy Zhanda, who is responsible for livestock, said the Nssa-CSC deal was going to be sealed soon. Zhanda last month had said the CSC would be back on its feet this month.

“We have made irreversible progress and we are only left with minor things which include technical issues to do with the scheme of arrangement,” said Zhanda.

CSC currently has debts amounting to US$25 million, mainly arising from fixed costs such as wages, rates and taxes on land.

It was reduced to a shell through years of unchecked mismanagement and asset stripping.

Nssa board chairman Robin Vela in May said that the authority would only inject new money into the CSC once the current board was dissolved.

“We want a board of proven competent people. This is pensioners’ money and should be injected into an entity and board that exhibits signs of being business-minded,” said Vela. “It is only fair to invest in a company that has potential and right people to make profits.

“Our vision is to create a company whose board and management has what it takes to revive the company so that it can be able to export to lucrative markets, earning the much-needed foreign currency (while) at the same time satisfying the local market,” Vela added.

The current board members are Sylvia Khumalo-Jiyane, Nemrod Chiminya, Emily Mumbengegwi, Anxious Masuka, Rufaro Mazunze, Khodholo Setaboli, Ngoni Chinogaramombe, Peter Nyoni, Cecilia Paradza, Bhekhithemba Nkomo, Unesu Ushewokunze-Obatolu and Reston Muzamhindo.

Chiminya is brother to Finance minister Ignatius Chombo, who also happens to be the Zanu PF secretary for administration, placing him fourth in the ruling party’s hierarchy.

Mumbengegwi is the wife of Macro-Economic Planning minister, Simbarashe Mumbengegwi. As for Nyoni, although he came through Nssa, he is husband of Sithembiso Nyoni, the Minister of Small to Medium Enterprises and Co-operatives Development.

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