Last year, due to poor funding by some risk averse contractors, Cottco managed to register growth in intake and market share at 43 000 tonnes and 32 percent, respectively.
Business Reporter
COTTCO Holdings has appointed acting chairman Dr Douglas Ncube executive chairman, a move seen as an attempt to push out chief executive Mr Collins Chihuri. The board gave Dr Ncube executive powers to induce confidence in lenders and shareholders during the implementation period of the proposed scheme of arrangement to enable the firm to clear its debts.
Sources said some of Cottco’s lenders had “registered displeasure” in the current executive, especially the chief executive.
Interestingly, Dr Ncube was also interviewed for the CEO’s position with the board opting for Mr Chihuri, which the same board is allegedly now working to “kick out”.
Dr Ncube confirmed in an interview on Friday that he was appointed executive chairman with effect from December 8 to ensure a “hands on” control of the firm’s operations.
“Yes I confirm that the board has suggested that I have a more hands on control of the operations of the company as we try to turnaround its fortunes,” Dr Ncube said. “The appointment is with effect from the 8th of this month and will initially last for three months.”
He however could not be drawn into discussing claims that the proposal had come from some of the company’s lenders who had reservations about management’s capacity.
He said he could not “comment on the other issues due to sensitivity” of the matter. However, sources said there was a hidden agenda behind the move.
“It is clear that the board wants to push out Mr Chihuri. Ncube was interviewed for the job and has always wanted it.
“His board had applied for judicial management and what has really changed for the same board to believe Dr Ncube can effectively lead the revival of the company.”
Another source said: “Yes, he is already here but we do not think that this will solve the problem. We have had meetings with banks and creditors and they raised concerns with the board, which he represents. Why would the board or banks allow executive chair? That’s bad for governance. As chairman, he should simply lead the board in the oversight of the executive team without interfering with the management.”
Mr Chihuri refused to comment saying the chairman had authority to speak on company issues.
While the common thread in explanations given various sources for Dr Ncube’s elevation were reservations about management’s capacity to steer the group to safety, Cottco’s results for the half year to September 2014 show the company is making positive head. Although Zimbabwe registered low national crop output of 135 000 tonnes, a repeat of last year, due to poor funding by some risk averse contractors, Cottco managed to register growth in intake and market share at 43 000 tonnes and 32 percent, respectively.