THE government has resolved to take over Caps Holdings, in a move aimed at saving the pharmaceutical firm from collapse.
Report by Charles Laiton, Senior Court Reporter
The decision to take over the drug manufacturing firm was made by Cabinet at its 28th meeting of August 21 2012.
Industry and Commerce ministry formally notified Caps Holdings chairperson Frederick Charles Mtandah on September 28 2012 of the move, indicating that the government wanted to save the company from collapse.
A letter written on behalf of the Ministry of Industry and Commerce by the director of enterprise development, Stanslus Mangoma, reads:
“This letter serves to formally notify you that Cabinet at it 28th meeting of August 21 2012 recommended that the government through Industrial Development Corporation (IDC) should save Caps from collapse by taking over its debts. It also recommended that the preliminary steps, which should include critical assessment of factors underlying the current plight of Caps, carrying out a due diligence on company and consideration of best options for intervention in Caps be undertaken.”
Apparently, IDC general manager Mike Ndudzo also wrote to Mtandah on October 2 this year advising him of the intended due diligence on Caps Holdings to be conducted by a team led by IDC group financial controller Peter Madara.
According to the letter, Madara’s team would require access to records on source of inputs, local and offshore, process plant, machinery and equipment records, records of manufacturing outputs and intellectual property, marketing channels/distribution and human resources records.
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The team would also require management information system, audited 2010 to 2011 and unaudited 2012 financial and management accounts and asset register, information on competitors and competitor products both local and offshore, import and export parity prices and information on Caps group structure, including foreign holdings and operations.
The mooted take-over of Caps Holdings by the government comes at a time when Mtandah has been battling to recover the pharmaceutical firm following the courts’ order barring him to set his foot at the firm’s premises.
Mtandah, who is accused of defrauding Caps Holdings of $25 million through deregistration of 50 local drug formulas and subsequently registering them under Caps International, last Thursday approached the courts seeking leave to return to work and save the drug firm from collapsing.
Prosecutor Michael Reza is expected to respond to Mtandahs application today, while magistrate Anita Tshuma would deliver her determination on the matter on Friday.
