LAWMAKERS yesterday tore into the debt-ridden Cotton Company of Zimbabwe (Cottco) board and the Mutapa Investment Fund for failing to pay farmers and transporters, leaving the strategic sector in turmoil.
The Parliamentary Portfolio Committee on Lands and Agriculture expressed frustration over the company’s financial crisis, which has left thousands of rural farmers unpaid months after delivering their crop.
During a heated hearing, it emerged that Cottco is operating in what officials described as a “financial blackout”, with the company lacking up-to-date financial statements.
MPs questioned how a national company could operate without proper books, saying the situation made it impossible to track the use of public funds.
The committee also heard that Cottco’s relationship with its main shareholder, Mutapa Investment Fund, is strained.
While Cottco said it had not received fresh funding from Mutapa to clear its debts, it was revealed that the company owes the sovereign wealth fund US$11 million.
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Lawmakers were further angered by revelations that Cottco had previously failed to appropriately utilise funds provided by Mutapa.
They accused the board of gross incompetence, noting that while the company sat on funds, transporters grounded their trucks and farmers were left struggling.
Mutapa chief executive John Mangudya told the committee that Cottco has been placed under corporate rescue due to widespread mismanagement.
We came here last time and discussed how to resuscitate Cottco. The truth is that Mutapa is owed US$11 million by Cottco,” Mangudya said.
“We cannot keep pumping money into something that is failing. The money we gave them was used to pay loans they owed to banks.”
Committee chairperson Saul Maburutse warned that the “relaxed” attitude of the executives was destroying the cotton industry.
He ordered Cottco and Mutapa to present a clear plan outlining when all arrears — including those owed to workers and service providers — will be settled.
“You cannot be asking for more money when you cannot account for what you were already given,” he said.
Maburutse added that the company was in disarray, lacking proper financial records and sound management structures.
“Everything is in shambles at Cottco — no financial accounts. Even the board itself complained about it,” he said.
“They told us the corporate rescue practitioners will take about three months to put their house in order.”
Maburutse said Mutapa promised that once the corporate rescue practitioners begin their work, priority would be given to settling outstanding debts.