Mugabe’s dairy struggles under a US$20m debt

Mugabe’s dairy struggles under a US$20m debt

via Mugabe’s dairy struggles under a US$20m debt – The Zimbabwe Independent October 23, 2015

PRESIDENT Robert Mugabe and his family’s multi-million-dollar Gushungo Holdings business, touted as a model of success of the controversial land reform programme, is reeling under an unsustainable US$20-million debt.

Herbert Moyo/Elias Mambo

The situation has been exacerbated by continuous loses incurred by its subsidiary Alpha Omega Dairy (Pvt) Ltd, forcing the First Family to seek emergency funding to rescue the company.

Information obtained this week from reliable sources at Gushungo shows the company is struggling due to a mounting debt, mismanagement and misappropriation of funds now under probe.

Alpha Omega general manager Stanley Nhari previously said local banks, in particular the Industrial Development Bank of Zimbabwe (IDBZ) and CBZ Bank, sustained operations at the company.

The Alpha Omega Dairy plant has a capacity to process 70 000 litres of raw milk per day. Its managers had said it was targeting to double raw milk output to 40 000 litres per day by year-end, from the current 23 000 litres per day. The company produces brands such as Mnandi sour milk and flavours of Appertina yoghurt.

Reliable sources at Gushungo told the Zimbabwe Independent that although the First Family has been thinking about disposing of the business, they have resolved to find a new investor who will inject fresh capital because the company is of “sentimental value” to them and they want to keep it.

As a result of the serious problems threatening the business with collapse, the Mugabe family has shaken up the company’s management, booting out Nhari and replacing him with one Zietsman.

First Lady Grace Mugabe is said to be fuming over the huge loses and has ordered an investigation into the operations of the company as she is convinced Nhari and other executives looted the business dry.
Although he has been kicked out, Nhari is said to be assisting an audit team from Ernst & Young which is combing through financial records as part of the investigation.

The sources said Grace has also approached her business networks and lawyers to look for potential investors to partner the family in the dairy project.

“The First Lady has instructed her business networks and lawyers to look for potential investors interested in buying shares in the business to ensure a joint venture,” a source said. “The idea is no longer to sell off or dispose of the business, but to look for new investors and managers to ensure recapitalisation and a turnaround.”

Last year Grace told wives of traditional chiefs that Alpha Omega owes banks over US$20 million they used to kick-start operations.

“Nhari was forced out due to allegations of mismanagement and misuse of funds,” another source said. “He may still be coming to the office, but he only sits at the reception area just to assist the auditors conducting a forensic audit. There are investigations also aimed at ascertaining how some employees were promoted to their current positions without the requisite qualifications, and the prejudice to the company through such unethical and unprofessional practices.”

Nhari this week refused to comment on the goings-on at the company.

“I’m not the company’s spokesperson,” he said. “You have to ask the company spokesperson.”

Asked who speaks on behalf of the company, Nhari said: “It is the principals; the owners of the company.”

Addressing guests at his niece Petronella Nhetekwa’s 80th birthday celebrations in Mhondoro last Saturday, Mugabe expressed his frustration over the looting at his company before suggesting corruption was rife because of society’s failure to mould upright citizens. “I decided to start a dairy business,” he said. “We hadn’t moved into cheese production, but we had started producing ice cream. See what was happening: nobody can tell us where the money is.”

He added: “Some (of the employees) did accounts, but prefer not to follow proper accounting procedures to hide their thievery. We have hired auditors from Ernst & Young and what they are unearthing is shocking.”

The company has always been brandished as a well-run and highly successful business, a model of success of government’s controversial land reform programme and indigenisation policy.

COMMENTS

WORDPRESS: 15
  • comment-avatar
    Zambuko 4 years ago

    What is really shocking is the lack of gratitude of some Zimbabweans! HERGM (His Excellency Robert Gabriel Mugabe) and DAGMMOTN (Doctor Amai Grace Mugabe, Mother of the Nation, respect)gave us Freedom and Land and, in this case, jobs but a looting continued. I applaud HERGM’s determination continue with the business by finding new investors and thereby providing new and wonderful opportunities consistent with the business and governance culture he has developed in the country. May we all continue to prosper.

  • comment-avatar

    laughter – the best medicine. !!

  • comment-avatar
    IAN SMITH 4 years ago

    Thats farming for you NOT SO EASY IT’S A TOUGH PROFESSION. The begging (investors)bowl has imerged. Where is the cash from diamonds??
    This is a joke hahaha.

    Another clueless black tribal n’anga in Britain thinks he can farm how stupid, it all goes to rot and ruin.

    Indigenous black tribal women playing in the white boys arena

    Not in 1000 years

  • comment-avatar

    Kkkkkkk. Inga ichokwadi kuti “matsotsi hagerani”; or more specifically “tsotsi haridi kugerwa – rinoda kugera iro chete, rikagerwa rinouraya munhu”.

    Looking, mdhara nepa BD party, zve BD zvefambira vanhu siye otanga kupupa furo hanzi ndakabirwa nema managers at Gushungo …. (family Co).

    What has that to do with the BD gathering? More importantly, wasn’t the so called Co built from stolen monies?

    Hanzi, zvinoda variivo kuba. Vakabirwa panofiwa.

  • comment-avatar
    C Frizell 4 years ago

    ROFL

    “mismanagement and misappropriation of funds”

    So, what’s new? And weren’t the cows and farm stolen too? Talk about not being able to organise a pissup in a brewery!

    Now the cow is looking for investors? Who in their right mind would put money in a venture run by a Mafia boss’s moll – and expect a return?

  • comment-avatar
    Trebor Ebagum 4 years ago

    That old cow ran dry long time ago. I thought they butchered things that old.

  • comment-avatar
    Yayano 4 years ago

    This is very good news! Mugabe getting the taste of his own medicine.
    From day one in office in 1980 he started stealing from the people(the government) and continues up to this day.
    His workers have learnt from him and are showing him how the people of Zimbabwe feel when he steals from them.
    They should continue stealing the milk, the yoghurt, ice-cream, pens, toilet paper and anything and everything because it’s pay back time for him.
    This month alone his wife Grace went to the government warehouse and stole tractors that were meant for the people and paraded them at her talk shows as if she had bought them. That is stealing.
    If stealing is bad Robert then stop stealing yourself from the people of Zimbabwe, return all the diamonds, gold, tractors your wife stole etc and only then will your workers take heed.

  • comment-avatar
    Chidumbu 4 years ago

    hahahaha the stupidity continues, they talk in first world numbers for a third world s@’>ho:e. Never mind she will just steal some more to fund he ill gotten gains. Maybe she should have gone to school to learn basic economics ie: you can’t take out more than you put in

  • comment-avatar

    Mugabe said,”See what was happening: nobody can tell us where the money is.”

    But sir, that’s what the people of Zimbabwe have been asking you for 35 years. Where is it? The Auditor General says that not a single penny of diamond proceeds ever made it into the general account last year. With government owning 50% of each of the diamond companies, government should be getting 50% of the annual profits. Where is the money sir?

  • comment-avatar
    Planter 4 years ago

    @ Chidumbu you are correct they are taking the money out themselves and now the debt is being called in they are blaming their staff – so they look innocent – I doubt very much if many are going to be able to get much out of the dairy – have you seen it security is tight at the entrance – you could liken it to border control – no they, the first family have bled it so they can set up in Singapore in the not too distant future

  • comment-avatar
    william mills 4 years ago

    In the past I was skeptical of such things, but now I am a believer in Poetic Justice.

  • comment-avatar

    I think we have all missed the really ironic bit – the new manager is a Mr Zietsman. Now, that is a good old, White, Afrikaner name!

    And employed by a pair of raving racists. Very funny indeed. But I bet The Bhobho is too stupid to see the irony.

  • comment-avatar
    Jona Amedza Hove 4 years ago

    To be honest I don’t eat the company products A & O… I can’t swallow any of their products . I don’t know why

  • comment-avatar
    Drifter 4 years ago

    Looks like the milk has gone off. Maybe the government will take over the debt?. Best to boycott its products since they are ill-gotten anyway.

  • comment-avatar
    Planter 4 years ago

    I think most of the country boycotts A&O products anyway this could also be a factor