CAPS Holdings Limited board chairman Fred Mutanda says the planned auction of the company’s head office cannot go ahead as the government had pledged to take over its debt to two financial institutions.
Report by Business Reporter
CBZ Holdings and FBC Holdings, to whom Caps owes an excess of $4 million, sought to auction Caps Holdings property on Friday this week.
In a statement yesterday Mutanda said Cabinet made a decision to take over the company’s debts as a way of rescuing the company last year in August.
“Thus, until the Cabinet decision on Caps is changed and communicated to the shareholders of Caps, the intended auction of number 2 Manchester Road undermines the executive authority of the Republic of Zimbabwe vested in the office of the President and Cabinet,” he said.
Mutanda said in September 2012, Industry and Trade permanent secretary Abigail Shonhiwa informed him about the government decision with the pharmaceutical company’s major shareholder, the Industrial Development Corporation (IDC).
He, however, said when IDC drafted the final report it did not include the decision made by the government to take over the debt which should have been settled by the money owed to Caps by Reserve Bank of Zimbabwe for medicines delivered to Natpharm in October 2008.
“In view of this, the Caps Holdings board chairman requested the IDC team to include the $4 million owed by RBZ for medicines delivered by Natpharm in 2008 be used to set off the Caps debt with CBZ Bank as the government was a significant shareholder in CBZ Holdings.
“That the Caps shareholders be given an opportunity to recapitalise the group in terms of the 30th of June 2011 extraordinary general meeting to finance the repayment of all Caps debt,” he said.
He added that both the group chief executive officers of CBZ Holdings, John Mangundya and FBC Holdings John Mushayavanhu respectively, were aware of the Cabinet decision.