via RBZ to pay Meikles $56,6 million – NewsDay Zimbabwe April 16, 2015 by Tarisai Mandizha
Meikles Limited should get $56,6 million from the debt owed by the Reserve Bank of Zimbabwe (RBZ) instead of $90,8 million after the Finance ministry prescribed that only 5% interest will be permitted on creditors balances, a legislator has said.
Bulawayo South legislator Eddie Cross accused Meikles chairman John Moxon of continually misleading “shareholders and the public by claiming that the Meikles debt continues to be at the level stated in the annual accounts of $90,8 million”.
Cross said he was being accused of sabotaging the company and undermining investor and shareholder confidence by pointing out that it was not a done deal that the company would get $90,8 million.
“The effect of this decision on the Meikles Group will be substantive — it involves the write-down of the balance in accounts of $90,8 million to a maximum of $56,6 million — a write down of $34,1 million, virtually wiping out the profits reflected in the 2013 to 2014 accounts,” Cross said.
Cross accused Moxon of failing to disclose that the $16 million of the Treasury Bills (TBs) given to the group in settlement of the liability by the Finance ministry had already been disposed of into the market at a discount rate of over 31%. He said this had yielded $11 million instead of $16 million.
“If the balance of TBs in the hands of the group are discounted by this figure, then the real value of the TBs in the accounts should be written down to $39,33 million, thereby increasing the loss of the group in 2013 to 2014,” the legislator said.
“Further compounding the difficulties of the group is the possibility that the ministry may apply the in duplum rule to the domestic debt and if they do, then the balance will be further reduced to $51,8 million.
“My own concern remains the welfare of shareholders, creditors and staff. I have found it difficult to understand the attitudes of Meikles directors or the actions of senior staff at both RBZ and the Finance ministry, especially the manner in which this important issue has been managed. I further think that the group’s auditors should have been proactive and cautious in their handling of this issue,” Cross said.
Cross, a shareholder in Meikles, has in the past courted the ire of the listed concern after being accused of abusing his position as MP and as member of the Portfolio Committee on Finance and Economic Development to warn that shareholders should not “count their chickens before they are hatched”.
Cross was reported to the Speaker of Parliament who absolved him of any wrong-doing.
Moxon was unavailable for comment as his office said he was out of the country.
The office requested NewsDay to send questions in writing that would be answered by either Moxon or company secretary Thabani Mpofu. The office failed to provide responses.