Zimbabwe: MPs Question Mangudya Over U.S.$6m Diverted to Banks

The monetary policies that were implemented by John Mangudya when he was the Reserve Bank of Zimbabwe governor came back to haunt him during his appearance before a Parliamentary committee hearing.

Mangudya, who has since moved to the Mutapa Investment Fund (MIF) where he is the Chief Executive Officer (CEO), appeared before the Parliamentary Portfolio Committee on Lands, Agriculture, Fisheries, Water and Rural Development recently, where he gave evidence on the operations of the Cotton Company of Zimbabwe (COTTCO).

The company, which is under the MIF, is in financial woes and is struggling to settle its payments to the farmers as it is bedevilled by governance issues.

This incensed the legislators, who demanded urgent reforms at the company, which has received financial assistance despite a mismatch in the output and the investment the government has made.

"In your offices, you decided that farmers are less important because you have conned them before when you were at the Bank. People ran losses as a result of the change of currency.

"You then went to Mutapa and decided again that farmers are not important. You took the money that was meant for farmers and you settled your debts with the companies because they have the power to take you before the courts," said ZANU PF legislator, Tendai Nyabani.

COTTCO was recently placed under a corporate rescue practitioner by the board in a bid to pluck it out of the financial mess it currently finds itself in, barely a week before the commencement of the cotton marketing season.

So dire is the situation at COTTCO that the company is not financially ready for the buying season, which starts on Monday.

Mangudya said the MIF had financed COTTCO to settle its debts with the financial institutions, which were on the brink of attaching the company's assets.

"The money that we gave to COTTCO was not therefore used for the purposes that we had discussed; otherwise, there were other more pressing matters. For example, if a bank is about to take their assets as security, you ask yourself as a shareholder where you put funding.

"The funds that were due and payable to these banks we had to foot ourselves, and that was US$6 million, which is also the amount which is owed to the farmers and transporters," said Mangudya.

Read the original article on New Zimbabwe.

Zimbabwe: 'You Conned Farmers Before With Currency Changes' - MPs Grill Mangudya As Farmers' U.S.$6 Million Diverted to Banks to Save Cottco Assets