Cottco under ZACC probe . . . Two officials suspended . . . Potential prejudice may run into millions

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    The Cotton Company of Zimbabwe (Cottco)

    Business Writer
    The Zimbabwe Anti-Corruption Commission has launched an investigation into The Cotton Company of Zimbabwe amid revelations the company could have lost millions of dollars in a botched lint deal involving some senior executives, it has emerged.

    According to sources familiar with the investigations, the company is understood to have diverted cotton lint that had been paid for by another customer.

    To facilitate the release of the order, it is understood that one of the executives instructed some junior officers to divert the consignment that had been already been paid for by one customer—on the pretext that the two clients had agreed on such an arrangement. This was however done without the knowledge of other executives.

    Then, the Cottco executive was comprised of Pious Manamike, managing director, Brighton Chibhamu, head of finance, Maxmore Njanji, head of operations and Benedict Mugura, head of corporate services. Two Cottco officials, involved in the transaction have since been suspended to pay way for further internal investigations.

    It is understood the client who received the lint has since failed to pay for the commodity while the one who had paid is battling to get the product. Cottco, which almost went into judicial management in 2014 after failing to settle debts amounting to about $50 million was bailed out by the Government through a three year input programme. This saw nearly $130 million invested into the company. The investment, through input subsidy to farmers, has brought the company back on its feet.

    The support programme has helped the revival of the country’s cotton sector, with production rebounding from 28 000 tonnes in 2015, the lowest output in more than two decades to 74 000 tonnes last year. Preliminary indications show cotton production could surpass 100 000 tonnes this year, for the first in more than five seasons.

    Cottco was the major financier of the crop after supporting close to 400 000 growers this year. This was up from 155 000 cotton farmers supported the previous season.

    The sources said the commission had begun investigations into the alleged fraud at Cottco.

    “As you are aware that ZACC is mandated to deal with such issues of corruption, the investigation on Cottco is already underway to establish what really transpired.

    “ZACC has already interviewed some officials and it is an ongoing thing, but I can say it a high level investigation. There is a high suspicion that fraud could have been committed and ZACC will get to the bottom of the story. What makes the investigators more curious is why some executives were excluded from this transaction.

    “When you look at the potential prejudice, one would ask why some executives were not part of the transaction. Obviously that will be known after the investigation.” The ongoing internal investigations would ascertain the extent of the prejudice.

    Business Weekly also understands that some divisions within the executive have emerged following the suspension of some junior officials implicated in the alleged fraudulent deal. “Some officials have been suspended while an internal audit is underway to establish if the transaction was fraudulent or above board,” another source said.

    The sources added they had also been some maneuverers by former Cottco employees alleged to be working with “some politicians to make their way back into the company.”

    As a result, some anonymous letters, written by “disgruntled workers” have been written to Minister Perrence Shiri (Agriculture and Resettlement), Dr Mangudya (RBZ governor) and ZAMCO to discredit some executives and employees.

    “Now that the company is getting stronger, some formers employee, obviously working with workers within the system are trying to make their way back into the organisation and the reason why since last year, several anonymous letters with frivolous allegations apparently to cause confusion have been written.

    Cottco public relations coordinator Victoria Mtomba referred the matter to Manamike who could not be reached by the time of going to print last night. Efforts to get a comment from RBZ and the Ministry of Agriculture and Resettlement proved fruitless by the time of going to press yesterday.

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