Zimbabwe News and Internet Radio

Cottco trio up for $2 million fraud

By Anesu Madiye

The Cotton Company of Zimbabwe (Cottco) was allegedly defrauded of $2 212 613,37 by three of its senior staff, who have since been suspended.

Cotton Company of Zimbabwe (Cottco)
Cotton Company of Zimbabwe (Cottco)

The three – Pius Manamike (acting director), Brighton Chibhamu (treasurer) and Lameck Machumi (sales and marketing officer) – appeared before Harare magistrate Ms Rumbidzai Mugwagwa.

They were released on $500 bail each and will be back in court on December 7.

Allegations are that in May 2017, the three, acting in common purpose, hatched a plan to defraud Cottco, an agro-industrial company engaged in buying, processing and marketing of cotton.

Acting director Manamike and treasurer Chibhamu entered into a Memorandum of Agreement with Cotton Pro Company to supply lint totalling 8 000 tonnes on a 90-day credit facility on May 30 the last year,.

They did this in violation of Statutory Instrument 150:2008 of the Exchange Control Order which stipulates that all lint must be acquired by a customer through pre-financing.

The Memorandum of Agreement was taken to Ecobank for registration and the bank indicated that it only processed documents for companies which had done the pre-financing, hence it could not assist Cotton Pro Company in securing a credit facility with them.

Between September 8 and October 12 , 2017 the three, fully aware that they could not obtain cotton lint through Ecobank, misrepresented to the bank that that they needed orders for the release of cotton lint to Devcote Louis Dreyfus and Mambo Commodities which had pre-financed the growing of the cotton.

Upon getting the release orders, the three further misrepresented to Socotec Collateral Securities staff based at Gokwe, Kadoma and Sanyati Cottco depots that the cotton lint was destined for export to Devcote, Louis Dreyfus and Mambo Commodities.

The offence came to light after an audit was carried out by the internal audit and risk department within Cottco and a report was made to the police which led to the arrest of the trio.

As a result of the trio’s actions, Cottco suffered an actual prejudice of $2 212 613,37 and only $707 249,31 was recovered. The Herald