HARARE – THE Zimbabwe Anti-Corruption Commission (Zacc) has arrested two Cotton Company of Zimbabwe (Cottco) top executives, who allegedly used their own trucks to distribute inputs from the firm’s depots around the country without their employer’s consent.
Cottco managing director, Pious Manamike and head of marketing, operations, ginning and logistics, Maxmore Njanji, who are charged with concealing a transaction from a principal and money laundering, appeared before regional magistrate Stanford Mambanje yesterday.
They were not asked to plead to the charges.
It is the State’s case that sometime in 2015, the Government as the majority shareholder, started subsidising cotton production through the Presidential Inputs Support Scheme, a direct subsidy to farmers which is administered by Cottco, through Manamike and Njanji.
On June 12, 2018, the Government as the purchaser represented by Cottco as the receiving agent and the RBZ as the paying agent, entered into a memorandum of agreement (MoA) for the supply of fertilisers and chemicals for the Special Cotton Production Programme with Ferts, Seed and Grain (Private) Limited (FSG), as the supplier covering the 2017-2018 planting season.
The contract was signed by Manamike on behalf of Cottco and the Government, with Njanji as a witness.
The contract was valued at US$43 958 000, according to the State.
Another memorandum of agreement covering the 2018/2019 planting season, was entered into by the same parties in July 2017 and was again signed by the two on behalf of Cottco.
The contract was valued at US$49 685 500.
It is said that in terms of Clause 3 of the memoranda of agreement, the role of Cottco was to provide a schedule to FSG stating where the inputs should be delivered.
Part C of Clause 3 on delivery of inputs by FSG stated that contract price included delivery of the inputs to all Cottco depots and distribution points countrywide as per schedule submitted by Manamike and Njanji.
In the planting seasons of 2019-2020, 2020-2021 and 2021-2022, the Government continued subsidising the production of cotton through FSG.
The role of Cottco remained the same, throughout.
Manamike and Njanji were responsible for submitting an inputs distribution schedule to FSG indicating requirements for each of the 10 Cottco business units and their sub-units where inputs were to be delivered.
The delivery costs were fully paid by the Government, according to the State.
Thereafter, they were to ensure that inputs under the Presidential Input Programme from FSG were delivered to all Cottco depots and distribution points.
Sometime in December 2019, the duo, with a combined 40 trucks started contracting their trucks with FSG for the delivery of the same inputs to various Cottco depots without disclosing to their principal, Cottco board.
Manamike is said to run Eternal Resources (Pvt) Ltd and is alleged to have, from December 2019 to June 17 this year, been engaged by FSG on more than 3 150 occasions to transport the inputs to various Cottco depots around the country.
He was allegedly paid $199 808 647.03
Njanji allegedly runs Chita One Logistics with Precept Njanji, and during the same period, his trucks were engaged by FSG on 3 500 occasions to ferry inputs to various Cottco depots and was paid $290 061 325.97
Cottco is said to have incurred additional costs running into millions of United States dollars after they deliberately caused the deliveries to be made at Cottco depots only and not to all distribution points as per the contract.
According to the State, this was in order to prevent their vehicles and those of their close associates, which are the main distributors of the inputs from going beyond main Cottco depots situated along major tarred roads.
Cottco is said to have engaged other transporters to ferry the inputs from Cottco depots to the distribution points, when in actual fact, that cost had been borne by the Government and paid to the supplier in terms of the contracts that were entered into.
The Prosecution led by Lancelot Mutsokoti opposed bail saying there was overwhelming evidence against them.
The State said if granted bail, they were likely to interfere with investigations, considering their positions.
The two, spent the weekend in custody and will appear in court today for bail ruling.