HomeBusinessNational Blankets’ demise brings misery

National Blankets’ demise brings misery

BY MTHANDAZO NYONI

FOR Siphiwe Sibanda (69), the liquidation of Bulawayo-based company National Blankets spells disaster.

Having joined the company in 1980 after Zimbabwe attained independence, she has nothing to show for serving the firm faithfully for a period spanning nearly three decades.

The once thriving textile firm retrenched her in 2010 alongside several hundreds of workers without any benefits.

“My life has been made hell on earth. I’m struggling to survive and my husband, who served the same company for 44 years, has since died without getting his benefits.

“As I speak, I’ve got debts which I’m struggling to clear,” a teary Sibanda, who took part in the workers’ demonstration against the company’s judicial manager in Bulawayo last week, told Standardbusiness.

“I’m staying with my nieces who lost their parents and I’m the one bearing the burden. I started working for this company in October 1980 and was retrenched in 2010 without any benefits.

“They owe us a lot of money and they are now refusing to pay us. For all these years I toiled for nothing.

“My husband joined the company in July 1966, but he died a pauper.

“We could not even manage to pay his hospital bills and even now we still owe the hospital money.”

The company, which was once one of the largest employers in Bulawayo, was placed under judicial management in 2012 after it faced serious viability problems.

Philip Ndlovu of PNA Chartered Accountants was appointed judicial manager, but he is now planning to liquidate the company citing insolvency — a move which has infuriated the workers.

In a bid to stop Ndlovu from liquidating the company, the workers last week staged a demonstration against him and the company’s majority shareholder, Tichafa Elias Mujuru.

The workers accused the two of plotting to liquidate the company before paying their outstanding salaries.

They said liquidation was equal to de-industrialisation because it creates unemployment, increases poverty, creates shortage of goods, suffocates the economy and affects government revenue, as well as suppress workers.

“I am hurt because of what is happening to this company. I don’t support the decision by the judicial manager to liquidate this company,” Patricia Ndlovu (70), who served the textile firm for 30 years, said.

“My wish is to see this company being operational again. We appeal to government to give us some funds to revive this company so that my nieces will come and work here since I am now old,” she pleaded.

National Blankets workers’ committee chairperson Fudu Ndlovu told Standardbusiness that in 2013 the company came up with an arrangement, which would see the workers take up 11% shareholding in the firm.

But sadly, 50% of their money was thrown away.

He said as part of the scheme of arrangement, workers were paid 50 cents of every dollar owed.

“They paid us 8% of the remaining 50%, meaning 42% was left out of the scheme,” Ndlovu said.

Workers said they were owed more than $1,8 million.

Another worker, Mavis Mudzimiri (70), said she was now living in abject poverty yet the company owes her thousands of dollars.

“I’m living in poverty and there is no one to look after me. In fact, I have to look after my nieces, but I have nothing to offer them. I served National Blankets for more than 35 years, but sadly I’m poorer,” she said.

Close to 100 firms in Bulawayo have closed down or relocated from Bulawayo in the past decade, triggering job losses.

Companies have gone under due to the absence of affordable long-term capital for retooling, mismanagement, influx of cheap imported products and electricity shortages.

Bulawayo companies that have gone under include True Value, Label Fashion, Suntosha Leisure Wear, Lancaster, Harren Manufacturing, Ascot, Belmor Fashions, Cinderella, Textile Mills and Rusglen Fashions, to name a few.

The list of struggling companies include, among others, the National Railways of Zimbabwe, Cold Storage Commission, Merlin or Merspin, Marvo Stationery, Wetblue and Rubber Products Manufacturers.

Workers have accused judicial managers of running down those companies to protect interests of the shareholders.

A Marvo Stationery worker, Mbonisi Gumbo, whose employer is also under judicial management, said since the beginning of company closures a decade ago, with Bulawayo being the hardest hit, the judicial managers had been beneficiaries of the crisis.

“In most, if not all, cases, the judicial managers have been used by corrupt company shareholders and management as a shield to protect them from paying creditors particularly the employees.

“There are very few companies, if any, that have been successfully resuscitated by the judicial managers since 2008,” Gumbo said.

In the case of Marvo, Gumbo claimed the shareholders and management looted millions of United States dollars since the introduction of the multi-currency system.

To make matters worse, he said they borrowed US$750 000 and a further US$150 000 from CABS, which was meant for recapitalisation, but those funds were diverted to individuals and also used to import finished products from South Africa through Browns Stationery.

“The workers were not getting paid, we went to court, won the case and when the Master of the High Court was about to act, management went and brought in Chrispen Mwete as the judicial manager, and the process was abandoned to the workers’ detriment,” he said.

“When the judicial manager came in, the company was viable. But as soon as he came in he wrote letters to all workers informing them to go on unpaid leave for two weeks while he ran around to look for investors, and those two weeks have since become five years from 20 August 2014, his own contract at Marvo was supposed to be 12 months.”

The government has in the past introduced facilities such as the Distressed and Marginalised Areas Fund (Dimaf) and the Zimbabwe Economic Trade Revival Facility to help companies recapitalise.

But most of the companies that got money from Dimaf remained in doldrums as the loans were of a short-term nature, inadequate and with punitive interest rates.

Gumbo said there was need for government to either completely do away with the judicial management system or at least reconstitute the framework.

He said judicial managers were easily being manipulated by the management and shareholders, and they “are selfishly ignoring the plight of thousands of workers”.

“If the government is sincere about resuscitating industry, then there must be a law that holds company shareholders and management responsible for their actions and the judicial managers must not be used to protect corrupt people,” Gumbo said.

Industry and Commerce minister Mangaliso Ndlovu said government was equally concerned about the judicial management system.

“I’m also quite concerned about the whole issue of judicial managers because I’m yet to see an established track record of success,” he said.

“There is something which I believe is being done about that. It could be premature at this point for me to say.”

National Blankets appeared to be on its way out of the woods when in 2014, creditors agreed that all debt should be converted to equity at a rate of $0,50 per ordinary share.

The creditors, however, were not keen on putting new money into the company, which had borrowed heavily.

The firm also sold off some of its property to the National Social Security Authority and settled its debt to the now-defunct Capital Bank as well as service providers such as Bulawayo City Council, paying a combined total of $2,6 million in 2013.

For Sibanda, her desire is to see justice being done.

“My house is sinking in debts. We wish to be assisted by government so that we can get our dues. I also need to recover my husband’s benefits,” she said.

Recent Posts

Related News

More by this Author