The Sunday Mail
Brian Chitemba
Investigations Editor
TOP officials at the Cotton Company of Zimbabwe (Cottco) allegedly prejudiced the firm of thousands of dollars in an inputs scam, an internal audit conducted in 2014 and in our possession shows.
Deloitte and Touche is also conducting a forensic external audit with preliminary indications indicating financial mismanagement.
In November 2014, Cottco applied for judicial management at the High Court after the firm failed to turn around its operations despite a capital injection from the sale of its Seed-Co stake.
Cottco owes creditors US$48,1 million; while its liabilities exceed its assets.
Its internal audit pointed to senior officials taking advantage of lax systems to siphon inputs.
Cottco managing director Mr Collins Chihuri, head of operations Mr Petros Piki, Cottco Kadoma business manager Mr Stanford Mahambire and crop procurement officer Mr Learnmore Matsvaire are named in the internal audit.
Messers Chihuri and Piki declined to comment on Friday with the former saying: “I don’t want to comment because journalists always misquote us. If you have your position regarding the story, just go ahead and publish and we will respond.”
Mr Piki threatened a lawsuit if The Sunday Mail published contents of the audit report.
The report alleges that Mr Mahambire swapped unusable fertiliser to get maize which belonged to Cottco.
The grain was sourced from farmers who failed to settle their debts with the company after borrowing farming inputs.
“The BM (Mr Mahambire) took an arbitrage approach where Cottco was denied real value of selling the recovered maize at the correct market price and discharging the grower’s debt accordingly.
“Through tip-offs, loss control investigated and confirmed that the Kadoma business manager swapped his personal fertiliser with maize that had been recovered from farmers in lieu of cash recoveries for inputs debt.”
It also came to light that management in Kadoma accepted returned chemicals, seed and fertiliser whose efficacy had not been tested. The returns were approved by an unskilled storesperson.
This meant Cottco accumulated stocks that would be written off.
According to Cottco’s loss control investigation report, the Kadoma unit raised write-off forms for the disposal of 361 CAN fertilisers which they claimed were no longer usable.
Instead of selling the “unusable fertiliser” to outsiders, managers insisted it be sold to staff.
After buying the dumped fertiliser, the inputs were snuck back into stores as “recoveries” from cotton growers who had not paid up their debts.
The internal audit report noted: “The business may be accepting stock of no commercial value and make use of the same to discharge inputs debts and some farmers are returning chemicals citing efficacy issues especially on reformulated pesticides.”
Questions were raised why Messers Chihuri and Piki did not take action against officials accused of prejudicing the company.
The audit said Mr Piki initially declined to take disciplinary action against Messers Mahambire and Matsvaire.
In response, Mr Mahambire said: “I don’t know the management response that you want me to give since no such swapping ever took place.
‘‘The fertiliser in question was never taken into stores. The cash for the maize was paid after I got my salary while the fertiliser was still at the gate as per agreement with the CPO. I am the one who took the fertiliser from the gate upon payment of the cash.”
Mr Piki weighed in: “If it is fraud as is so proposed, report your case to the police while internal processes take course.
‘‘Give me the evidence that the transaction was done on the basis of undertaking fraud and I will act.”
The loss control report recommended that Messers Mahambire and Matsvaire be suspended immediately.
“There is a clear misconduct by the business manager and the crop procurement officers and there is enough evidence to sustain the charge. The BM and CPO should be suspended from employment immediately and the grain should be recovered from the business manager and the fertiliser removed from stores.”
