Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Cotton furore: Minister accised of aiding Chinese firms

Cotton furore: Ministers accused of aiding Chinese firms

Thursday, 29 July 2010 19:48

ZIMBABWE’S cotton players have taken steps to stop a Chinese firm from using
political muscle to clandestinely purchase cotton from farmers contracted by
local industry.

In court papers lodged with the High Court, the Cotton Ginners Association
of Zimbabwe (CGAZ) accused Sino-Zimbabwe Holdings of using “political
gurus” -­ including Zanu PF ministers and party youths – to buy the crop
from farmers contracted with members of the CGAZ.

The CGAZ represents the interests of local companies involved in the
production and buying of seed cotton as well as the ginning and marketing of
the crop.

Sino-Zimbabwe rejects the claims that it is using political influence to
hijack local firms’ investments with farmers as misleading the court.
Sino-Zimbabwe is accused of working with politicians to reap “where it did
not sow”, by inducing farmers to ditch CGAZ members who paid for inputs for
farmers under special contracts.

The company’s actions are allegedly in violation of statutory instruments
gazetted last year to regulate trading of the crop.
CGAZ made an urgent application on July 16 to the High Court to stop
Sino-Zimbabwe from using what the organisation said amounted to unfair
business practice.

High Court judge Lavender Makoni, however, on Wednesday dismissed the CGAZ
application as not urgent.
In his founding affidavit, CGAZ director-general Godfrey Burumbo-Buka
represented by Scanlen & Holderness law firm accused Sino-Zimbabwe Holdings
of buying cotton at inflated prices from growers who signed contracts with
CGAZ members throughout the country.

The organisation, which includes firms such as Cotton Company of Zimbabwe
and Quton, say because of the political interference, the police had become
“hopeless” and could not be relied upon to take action.

Among those named in the CGAZ court papers are Minister of Indigenisation
Saviour Kasukuwere, Minister of Infrastructure and Transport Nicholas Goche,
Zanu PF Mashonaland Central provincial chairman and MP for Mt Darwin North
Dickson Mafios, and Police Assistant Commissioner Martin Kwainona.
They are accused of spearheading Sino-Zimbabwe operations.

Buka said Sino-Zimbabwe Holdings was operating in Gokwe, Kadoma, Mhangura,
Mount Darwin, Bindura, Guruve, Mutoko and Raffingora.
An annexure to CGAZ court papers alleges that Sino-Zimbabwe Holdings
“invaded” Cotton Company of Zimbabwe’s Bindura business unit on July 4 with
the help of politicians.

“These include Honourable Kasukuwere who had a meeting at Tabex in early
July updating the farmers of the coming in of a better paying company. This
was followed with a series of meetings from Mr Goche at Madziva, MP Mafios
at Mukumbura (Kamutsenzere area) and Kwainona at Bveke,” read the court

“The permanent presence of Mr Kwainona (Presidential bodyguard) at Bveke
resulted in it being the epicentre of the resistance and spilled into all
other areas in Mt Darwin and Rushinga.”

CGAZ alleged that the situation was worsening in Raffingora and Guruve.

“The community and the party (Zanu PF) have taken charge of the cotton
business. They continue to operate away from the common buying points and
their points are a no go area as they are guarded by youths. The police are
hopeless as they are literally seen moving in Sino-Zimbabwe trucks.
Police claim they cannot do anything as they are still waiting to be advised
of a way forward from the top.

“In supporting the farmers, members (of CGAZ) have spent considerable
financial and technical resources as part of an investment in the industry.
In return the applicant’s members are contractually and legally entitled to
purchase the cotton seed from the farmers,” argued Buka.

He said that the contracted growers were obliged to sell their cotton seed
to the company that supported them in terms of the contracts and in terms of
Section 14 of Statutory Instrument 142 of 2009.

Members of CGAZ are all signed up as contractors and buyers with the Cotton
Marketing Technical Committee in terms of the law.
The provisions of the law state that seed cotton produced by a grower in
terms of a contract with a company can only be sold to the contracted

“Respondent  is  blatantly  violating  the  law  and  inducing  the
contracted  growers  to  breach  their  contracts  with  applicant’s
members.  It is  openly  buying  cotton  seed  from  contracted  growers
who  have  contracts   with  applicant’s  members,” reads the court papers.

“It  is  clear  from  the  reports  that  respondent  is  violating  the
law  by  buying  cotton  seed  from  contracted  farmers,  emptying  seed
packs  provided  by  applicant’s  members, and  not  grading  the  cotton
seed  being  purchased.”

Buka said attempts by the Cotton Marketing Technical Committee, which wrote
a letter to Sino-Zimbabwe on July 7 and conducted a hearing with Sino
Zimbabwe on July 9 “to stop its illegal acts” have been unsuccessful.

Sino Zimbabwe Holdings, however, rubbished CGAZ’s accusations, arguing in an
opposing affidavit that the applicant “is scared of competition” and was
abusing the courts.

Director Jimmy Zerenie said Sino-Zimbabwe Holdings had “not induced anyone”
to do business with it and had not purchased any contracted cotton.
“The applicant has various other remedies available to it which includes but
not limited to suing for breach of contract if there is such a breach
between applicant and its contracted farmers.”

“The First respondent has not induced any contracted growers to breach the
law. If anything, the first respondent has complied with the law and has
operated in a very transparent way,” read Zerenie’s affidavit.

He said the application was misleading the court and that there was no
evidence placed before the court to substantiate the allegations of
political interference.

“The respondent has not committed any criminal offence, hence the police
have not acted on the report,” said Zerenie who is represented by Chinamasa,
Mudimu & Dondo legal practitioners.

Wongai Zhangazha


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