THREE top managers at Cotton Company of Zimbabwe (Cottco) have been slapped with fresh charges of misappropriating $10,3 million from the parastatal by the Zimbabwe Anti-Corruption Commission (Zacc).
BY RICHARD CHIDZA
Initially, the three executives were last week hauled before the courts for allegedly swindling the company of over $2 million.
But Zacc yesterday said it had discovered that a further $10.3 million was allegedly siphoned out of Cottco.
Pius Manamike (51), who is managing director; Brighton Chibhamu (37), head of finance and Lameck Machumi (32), the sales and marketing officer, appeared before Harare magistrate Rumbidzai Mugwagwa facing fraud charges.
Zacc Commissioner in charge of investigation Goodson Nguni told NewsDay that two other senior officials had since been picked up.
“Further investigations have revealed that Cottco lost more money than initially known. We have just added a $10,3 million charge on top of the previous charge for which they are on bail. They will be joined by two others, a J Dube and one Mugura,” said Nguni.
According to prosecutors, Cottco is run on a business model built around pre-financing facility entered into with off-shore cotton merchants through an Ecobank guarantee in which 70% of the cotton lint is reserved for the off-shore markets, and the remaining 30% for the local market.
Their foreign cotton lint buyers were Olam from Singapore, Louis Drefus from Switzerland, Devcote and Mambo Commodities from France.
In the first case, it is alleged that sometime in May 2017, the five connived to defraud the company in which Manamike and Chibhamu entered into a memorandum of agreement with Cottco, which was dated May 30 2017 and was to supply 8 000 tonnes on a 90 day credit facility.
The agreement was taken to Ecobank for registration, whereupon the bank indicated that they only processed documents for companies which had done the pre-financing.
Between September 8, 2017 and October 17, the same year, the first three accused, who knew that they could not obtain cotton lint through Ecobank, misrepresented to the bank that they needed to release orders of cotton lint to Devcote, Louis Dreyfus and Mambo Commodities, which had pre-financed the growing of cotton.
“Meanwhile, Ecobank had contracted Socotec Collateral Securities and deployed them at all cotton depots in Zimbabwe to ensure that cotton lint was being released to approved merchants.
“Upon being given the release orders, the accused further misrepresented to Socotec Collateral Securities staff based at Gokwe, Kadoma, Sanyati Cottco depots that the cotton lint was destined for export to Devcote, Louis Dreyfus and Mambo Commodities,” said prosecutors.
This resulted in a total of 1 106 tonnes of cotton lint being fraudulently released on their instructions. It is further alleged that the offence came to light after an audit was carried out by the internal audit and risk department within Cottco.
The court will hear that Cottco suffered an actual prejudice of $12 212 613.