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my office and the ZRP, with a view to prosecute and recover, were largely unsuccessful,” said Mr Militala in his report.
“It is my finding and submission that the denial of access to the company records was a deliberate move by the executive management of DWT and Elgate (a majority shareholder) to frustrate efforts to recover assets belonging to DW.”
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But he said from the limited records he came across, through physical searches and a “critical” look at an agreement of sale of property, plant and equipment with view to establish the beneficiaries, Mr Militala said he established that:
- Some residential property was sold and paid for in cash with the money handed over to Mr Andrew Toendepi (a director at the company). The extent of this practice could not be determined due to lack of books and records.
- The proceeds from the sale of 3 Austin Road, some US$750 000 was not fully reconciled. The proceeds were lodged with lawyers C. Nhemwa and Associates who represented Mr Toendepi and Mr Mangena (another director) in numerous cases.
Part of the proceeds were transferred into a DWT account and withdrawn in cash. No vouchers to explain the application of the funds were made available.
- An attempt to sell a sub-division of 3 Austin Road was stopped through litigation by National Blankets.
Mr Militala recommended DW be placed into liquidation due to insolvency, denting hopes of more 3 000 employees who were expecting to return to work.
He admitted the reconstruction was not “serving any purpose” as no investor was prepared to inherit debt.
The collapsed textile firm was, for the second time, placed under judicial management in December 2010, having gone through the same reconstruction between 2005 and 2008, under Dr Cecil Madondo of Tudor House Consultants.
Elgate Investment, which acquired a 52 percent stake, applied for a second judicial management after the company plunged into a serious financial crisis.
The former Zimbabwe Stock Exchange-listed company was once one of the country’s biggest employers, sustaining thousands of livelihoods directly and indirectly.
Formerly owned by Lonhro before a management buyout in 2001 – led by former CEO Mr Edwin Chimanye – it has three main plants in Chegutu, Kadoma and Gweru.
DW requires US$3,5 million for plant refurbishment and US$2,6 million initial working capital.
Online Reporter