DWT ex-CEO in trouble again

Golden Sibanda

David Whitehead workers have petitioned the Criminal Investigations Department (CID) to investigate former chief executive and minority shareholder Edwin Chimanye for allegedly taking some of the company’s assets under unclear circumstances they claim amounts to asset stripping.

Executive committee members, comprising chairman Stephan Musapuri, deputy chairman Tadious Maweto and secretary Murembanzeve Charumbira, want Mr Chimanye to be investigated for taking the firm’s 14 hosiery knitting machines from the company without authority.

The value of the machines could, however, not be ascertained at the time of writing.

The letter requesting Mr Chimanye’s criminal investigation was filed on February 25, 2020 at Harare CID headquarters.

However, Mr Chimanye dismissed this as mischievous.

Reads the workers’ letter to Harare CID: “We are appealing through your highly esteemed office to investigate one of the minority shareholders, Mr Edwin A. Chimanye, who was once a chief executive of DWTL.”

The correspondence further alleges that Mr Chimanye goes around boasting that nothing can happen to him because of his political connections.

“It is our prayer as employees of David Whitehead Textiles, through your good offices, to investigate him.”

The DWT workers blame the firm’s troubled past, especially circumstances that saw it being placed under judicial management in 2005, on alleged mismanagement by Mr Chimanye.

“The mismanagement of the company resulted in it being suspended from the (Zimbabwe) Stock Exchange, among other things,” the committee members wrote.

However, Mr Chimanye on Friday said he was not aware that he had been reported to the police over the “missing” knitting machines.

While he acknowledged possessing the machines, he said DWT judicial manager Mr Knowledge Hofisi was aware of this.

Further, Mr Chimanye said he had been in constant communication with Mr Hofisi for him to collect the machines, but for more than six years the judicial manager had not done so.

He said the machines in question came into his possession after a lease deal with a South African company, Mana Consulting , had collapsed in 2008.

“The subject was raised a few times and I furnished Mr (Knowledge) Hofisi (DWT judicial manager) with all the contracts with Mana Consulting back in 2008. I was a consultant for Mana,” Mr Chimanye said.

He said fellow former DWT chief executive and then majority shareholder Andrew Toendepi was in charge of the company when the machinery deal was consummated.

He also produced correspondence between him and the judicial manager suggesting that the former was aware of the whereabouts of the said equipment after the deal with Mana Consulting fell through.

However, Mr Hofisi said claims that he was aware that the equipment was in Mr Chimanye’s possession were not entirely correct as he had written to him on several occasions to return the knitting machinery. However, Mr Chimanye would allegedly not pay heed.

“We communicated with him several times to say that he must bring back the equipment because it was in his custody under circumstances that were not clear, which in my opinion could be fraudulent.

“I wrote to Chimanye on several occasions to bring back the equipment, but he did not comply. Some workers in Gweru were actually asking me why some of the equipment that should be at the company were in the hands of a shareholder?” Mr Hofisi said.

According to an application to the High Court in 2005 by the Zimbabwe Textiles Workers’ Union for David Whitehead to be placed under judicial management, as DWT was struggling to pay its debts dur to mismanagement.

“The company lacks a proper corporate governance structure and has not held a single meeting of the board of directors since the resignation of board chairman, N. Mhlanga in 2003.

“The board of directors has not been involved in the affairs of the company since the resignation of the chairman, leaving Edwin Ashley Chimanye, the managing director and chief executive officer of the company, having a free reign,” ZTWU said.

This comes as Mr Chimanye has applied to the High Court for the removal of the judicial manager, Mr Hofisi, accusing him of selling the company’s majority shares to one of the secured creditors, Agri Value Chain.

Agri Value Chain Zimbabwe, a company linked to Parrogate, David Whitehead’s largest secured creditor, initially bought a 51 percent stake in the textile firm for $5,4 million, which was used to pay off some of the mothballed firm’s longstanding debts.

The company, which has interests in cooking oil production in Zimbabwe, has since bought other shareholders’ equity and increased its stake to 66 percent.

According to Mr Hofisi, the acquisition of DWT by AVCZ, linked to Parrogate and one of the firm’s secured creditors, was a welcome development as it stopped Parrogate from pursuing litigation, which would jeopardise its resuscitation.

DWT used to produce about 20 million metres of fabric per year while directly employing 3 000 workers and thousands in down and upstream industries.

DWT woes began around 2004 when it was first placed under judicial management. Since then, the company has remained under the High Court-sanctioned reconstruction under three different administrators, until Agri Value Chain acquired it.