The Sunday Mail
OLIVINE Industries Ltd tried to cheat its way out of a US$322 000 debt owed to the National Development Fund by non-procedurally converting it into equity, the latest Auditor-General’s report shows. The NDF is a pool of donor development funds managed by the Finance Ministry. In 2009, Olivine accessed a US$1,14 million loan from the fund to pay for soya beans received under the Commodity Import Programme, a 33-year-old Norwegian-funded development assistance project that supports strategic supplies and production in Zimbabwe. Of that amount, Olivine repaid US$787 000 by December 31, 2013, according to the report. However, at an AGM, Olivine resolved not to pay back the outstanding debt of US$322 000, including interest, “for reasons not yet established”.
“Further enquiries revealed Olivine had been verbally instructed by IDC (Industrial Development Corporation) not to settle the outstanding amount as IDC wanted the loan to be converted into equity,” said the report.
Olivine Industries is 51 percent owned by IDC Holdings, while Aico Africa Ltd, which has since been rebranded as Cottco Holdings Ltd, holds the remaining 49 percent. The debt owed by Olivine Industries Ltd and the interest which is accruing might not be recovered. NDF should request for a written confirmation pertaining to the decision by Olivine and act to protect the interest of the Fund. However, Olivine Industries seems to be relenting. In a letter dated April 2014, the company – once Zimbabwe’s biggest cooking oil and soap maker – confirmed the NDF debt and pledged to repay the outstanding money when the company’s cash flows improve. The IDC’s chief financial operator denied issuing such an instruction to Olivine and instructed Olivine to pay the outstanding amount. Olivine Industries started as a family business in Nyazura in 1931. Initially an oilseed refiner, it grew to become the manufacturer of dominant brands such as Buttercup Margarine, Big Ben soap and Olivine Cooking Oil. In 1987, Olivine Industries was acquired by US food processor Heinz and expanded its product range to baked beans, tomato ketchup, soups and marmalades. Heinz has since divested from the firm.
Cheap imports, old equipment and inadequate working capital are weighing heavily on the business. IDC is now seeking investors to inject at least US$25 million to boost production.
