BDO Zimbabwe partner Ngoni Kudenga has been disqualified as Cold Storage Company’s (CSC) corporate rescue practitioner on conflict of interest allegations, the meat processor’s creditors meeting heard yesterday.
Master of the High Court Rose Dube told the CSC’s inaugural creditors’ meeting in Bulawayo that Kudenga was disqualified on the basis of allegations arising out of his alleged close relationship with Minister of Agriculture Anxious Masuka who was chief executive at Zimbabwe Agriculture Society while the top chartered accountant was the president of the organisation.
There are also allegations of Kudenga being the board member for Hippo Valley Estates, a subsidiary of Tongaat Huletts which has expressed interest in one of CSC assets.
“From the issues raised against Mr Kudenga I therefore disqualify Mr Kudenga as the company’s corporate rescue practitioner,” Dube said.
The allegations were raised by a Bulawayo-based lawyer Dumisani Dube who cited that Kudenga was not independent due to his close relationship with Masuka.
Legal experts told Business Times last night that the Master of the High Court has the power to appoint or disqualify a corporate rescue practitioner and in the Kudenga case the Master will then approach the High Court to confirm the decision.
The government last year appointed Kudenga to resuscitate the ailing CSC after Masuka applied to have the company placed under a corporate rescue plan.
Kudenga presented his preliminary report on plans to revive the company and the current state of the parastatal.
Creditors attending the meeting were shocked by what they regarded as Kudenga’s deliberate plot of ignoring Boustead Beef’s input in the capital raising initiatives he was proposing. A US$400m agreement in 2019 was made with a United Kingdom-based investor as authorities looked at resuscitating the CSC, through the agreement which also obliged the investor to use the CSC’s assets and extinguish the company’s liabilities.
Mutare City Council, represented by its legal counsel, blasted Kudenga’s report citing that it lacked depth after the veteran chartered accountant failed to furnish the meeting with the CSC assets register.
“The fact that you come here and present a report which is full of general knowledge makes us question your capacity as the corporate rescue practitioner. We are here to be given a clear roadmap on how CSC is going to settle its obligations. Your report is too shallow for a corporate rescue practitioner,” Mutare City Council said.
“Right now you don’t even know what assets CSC has which are being utilised by Boustead Beef and through that how are we going to have confidence in you in terms of such information that is important.”
Kudenga responded by stating that this was still a preliminary report which was only meant to highlight the current state of the company.
“I did not come with an assets register because this is just a preliminary report and there is going to be a comprehensive report on the revival roadmap of the company,” Kudenga said.
Bulawayo City Council, which is also another creditor, blasted Kudenga for failing to come up with a clear revival roadmap for the company. The Bulawayo City Council representative further noted that there was need for clarity on the role being played by Boustead Beef, especially Kudenga’s silence on the matter in the report.
“It is quite shocking that you come here to tell us that you have been failing to get information from Boustead Beef for you to come up with updated financial statements. What are the issues and can you furnish this meeting on what is the roadmap for revival together with the role to be played by the investor now that the company is under corporate rescue?” the Bulawayo City Council representative asked.
The meeting was charged to an extent that the Master of the High Court had to cool tempers after legal practitioners exchanged harsh words in the meeting.
On the Boustead Beef agreement, Kudenga said he was going to look into the matter checking on how much the investor has invested and possible areas of cooperation.
“We are still going to look at the Boustead Beef agreement and see its current status and also if there is any way to either improve or adjust it while also looking at where the investor has been facing challenges,” Kudenga said.
Gweru City Council also questioned Kudenga’s silence on the Boustead Beef agreement citing that there was an impending nasty legal fight in the event that Kudenga does otherwise.
The Gweru City Council representative further noted that there was need for a clear revival roadmap on how creditors were going to get their money arguing that Kudenga just presented an empty report.
“What you presented is just a vacuum and there is a need for a clear roadmap to take away as we go back to our principals. As it stands we have nothing to report back and it’s unfortunate that creditors might not be able to recoup their money,” the Gweru City Council representative said.