The Sunday Mail
Dexter Nduna, MP
The demise of Zimbabwe’s once leading textile outfit, David Whitehead Textiles, remains unresolved more than a decade and half after Lonrho transferred the textile giant and National Blankets as a group to Mr Jeremy Musgrave of National Blankets in 2001.
The transfer was done to an investment vehicle called Intaglio. Mr Musgrave then transferred DWT to Edwin Chimanye’s investment vehicle called Gusgole.
Lonrho then proceeded to facilitate for a Standard Bank loan for the DWT management to pay-off the shareholding in which DWT management used the company assets as collateral while Lonrho was the guarantor.
In 2002, a demerger was done to ensure the effective separation of National Blankets from DWT, a transaction which rendered National Blankets under the helm of Musgrave and DWT under Edwin Chimanye as CEO.
Gusgole was to have 88 percent of DWT shareholding while 12 percent was for minority shareholders.
The transaction sidelined the employees who were supposed to receive either shares or monetary pay-outs as retrenchment relief from Lonrho.
The employees got nothing instead, even to this date. The transition process handed over DWT as a going concern to Chimanye and E. Chivaura, his financial advisor, with 11 million metres of fabric, eight million grey socks and three million finished fabric in stocks.
The rest became the journey of a gravy train at the helm of Edwin Chimanye who, along with Chivaura, created an investment company called Flusket without board approval. Flusket was allegedly used for siphoning of DWT funds for their personal use.
It remains the fervent prayer of the employees that the Government orders a forensic audit of, among other things, the activities of the two aforesaid directors and Flusket that haemorrhaged DWT until it got to its knees. The Chimanye-led management failed to produce audited accounts beyond the stipulated time-frame, a corporate drunkenness that led to delisting of DWT from the Zimbabwe Stock Exchange.
The corporate malfeasance also manifested in bizarre extravagance in Edwin Chimanye when he relocated the DWT head office from Chegutu to the ivory towers of Borrowdale’s Sam Levy’s Village, a decision he executed without board approval.
Furthermore, he proceeded to appoint his brother, Walter Chimanye, as Import and Export Manager. By this juncture, the board of directors had resigned citing serious corporate governance deficiencies.
Subsequently, the company was placed under judicial management in May 2006 by Order of the High Court of Zimbabwe H5004/05. In the same year, Edwin Chimanye appointed his brother, Walter Chimanye as a director of Flusket Investment.
Cecil Madondo led the judicial management with Knowledge Hofisi as the financial advisor of the judicial management outfit. Andrew Shungu Toendepi of Elgate Holdings (Pvt) Ltd was enlisted as a potential investor in the very first six months to inject a total of US$5,4 million, an investment that never saw light of day as the Elgate side failed to kick-start the operations due to non-injection of the much-needed working capital.
It was a fling that was sold to employees by the ZTWU despite numerous warnings by the then MP Chegutu Urban, Honourable Webster Shamu, who asserted that Toendepi and Elgate Investment had no bankable capacity to resuscitate DWT.
The explication of a few ugly pointers to the untoward demeanour of Edwin Chimanye and later Toendepi and are corpus of severe corporate dementia that bedevilled DWT.
President Mugabe once visited DWT to resolve the DWT issue and Edwin Chimanye refused to attend the meeting.
That he had the audacity of defying the President of the Republic only to later re-emerge as a “saviour” of the same establishment is both unethical, immoral and recklessly experimental of a national resource of a textile firm that was a jewel of not just the African markets but also beyond.
Ngugi wa Thiong’o wrote in his “Devil On The Cross” that misfortune is the swiftest spirit and that has been the tale of DWT.
Attempts to engage a new investor, Kithra Enterprises, on a one-year contract in December 2010 by the provisional judicial manager, Mr W. Militala, were still-born as the investor cited “unproductive interference” by Edwin Chimanye who had been engaged as the technical consultant.
Militala later identified a foreign direct investor in 2012 who wanted an outright purchase of DWT after a positive due diligence but was again blocked by Edwin Chimanye and ZTWU who had successfully applied for final judicial management.
The incumbent judicial manager has exuded all signs of failure and inconsistency. There are allegations that he is all out to strip the company of its real estate for own good.
He has divided workers using some political filter in employee recruitment whose mould is totally against what the Government stands for.
He has cowed the few employees who were paid their retrenchment packages while dumping the rest and further created parallel workers’ committee. He is not doing any better to service swelling debts, yet affording expensive cars barely six months into his stint.
The rank and file of workers have the capacity to superintend the affairs of the company and are the biggest creditor, anyway.
Workers are more than ready to turn the debt into equity armed with a bankable business plan.
Several of the more 4 000 workers have died since the demise of the company and their families continue to bleed at heart. The company now owes more than $20 million to its creditors and anything short of this amount either in working capital or investment without turning credit into equity cannot work.
There is need to bring to the fore the report on the so-called Toendepi’s US$5,4 million investment pledge. The relevant arms of the Government ought to spring into action on the matter.
The workers deserve to have their plight addressed. The hunt for DEMAF facility of US$1,8 million is a clear sign of desperation by the judicial manager.
He is supposed to be the first one to know what US$1,8 million can and cannot do in a run-down, stripped down production facility whose machinery is now obsolete and expensive to operate.
The numbers of cost of ownership of the existing machines must be brought to the fore. He cannot just want any amount of money. He must advance a plausible business case that passes all test.
It is running parallel with realism to ever imagine that DWT in the existing state and with the aging equipment will produce viably.
Now that Government has taken the bull by the horns by taking charge of Cottco and providing inputs for cotton production for the next three seasons, this should not be done without a reliable value adding chain.
The present credit ranking means the employees are owed 59 percent; Parogate 15 percent and these alone constitute more than 70 percent of the major creditors hence have a voice to dispose of the judicial manager and turn their credit into equity.
The present scenario which has seen the company being sued by lawyers who represented it during the former judicial management’s tenure including the present one, speaks volumes of the further demise of the company.
My role of representation and oversight is not complete if I’m found holding this dead baby which has not been given any life by the present judicial manager who must now pave way for the resuscitation of the textile giant before my tenure is up.
The writer is the Chegutu West legislator and this article was initially published in The Herald of April 6, 2016.
