Lancashire Steel deal faces collapse

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…Government dithers, examines controversial Indian company

…State duped by ‘broke’ investor with cluttered past?

NYASHADZASHE MAJONI/GARIKAYI MATAVA

HARARE– The government has dramatically changed its stance and is now dithering on the long-awaited reopening of state-run steel concern Lancashire Steel amid revelations that the Botswana-based Indian company Whinstone Enterprises, which controversially signed a deal to revive the Kwekwe-based steel manufacturer, is financially incapacitated to begin operations at the moribund company.

Information gathered by midlandsnews also indicates that the Government has now started examining the controversy-ridden Whinstone Enterprises which was last year given 50% ownership of the Midlands-based steelmaker, albeit the fact that the cabinet was yet to approve of the deal between Lancashire and its controversial business partner, Whinstone.

To date, the controversial deal is yet to sail through the President Emmerson Mnangagwa-headed cabinet and the Parastatal Restructuring Committee before its implementation amid indications that the business deal is faced with imminent collapse.

Ironically, Lancashire Steel which is a subsidiary of the now defunct Ziscosteel, recently invited its former employees to reapply for jobs they used to perform nine years ago when the company shut down operations following the demise of Zisco, its major raw material supplier. According to a close source, heads are set to roll at the steel producer after the company unprocedurally floated an advert calling for job reapplications by former employees despite the fact that the deal is faced with imminent collapse.

We are also authoritatively informed that the government has now started investigating the Verma family which owns Whinstone, casting serious doubts on the reopening of the then vibrant steelmaker despite an advertorial notice calling on former employees to reapply for their jobs.

“There is a lot of confusion going on, including the controversial manner in which the Verma family was granted the deal to resuscitate the company (Lancashire)”, said a highly-placed source who spoke to this publication.

“What is actually disturbing is the fact that the details of the deal have remained a mystery even to some of the board members. The truth of the matter is that the government has now realised that they were duped by a broke investor with a cluttered past and it is for this reason that they have now started investigating the Verma family. Remember, this is the same company which was implicated in corruption in Botswana and fingered in the closure of Puma Steel under a cloud”, the source said.

In an interview, Industry and Commerce Minister Mangaliso Ndlovu confirmed that the government was now examining the Verma family, adding that ‘there are issues with the company (Whinstone).

“We are yet to come up with a conclusion on the deal. We are actually trying to regularise the deal. We want to know who these investors (Whinstone) are and as you might be aware, there are quite a number of issues to do with this company; so we want to have a proper insight on this deal. All we need to know is who these people are so that we will not have problems in the future”, said Minister Ndlovu.

Questioned on reports that tensions are high within the corridors of power at Lancashire following the floating of an advertisement in local newspapers calling on former employees to reapply for their jobs, Ndlovu refused to comment, saying ‘for now let me end there’.

Signed last year, the Whinstone-Lancashire Steel deal in which the former was set to become a major shareholder, getting 90% of the profits has continuously been shrouded in controversy as details of how much money Whinstone invested in the deal has puzzlingly remained under wraps.

Feedback: editor@midlandsnews.co.zw

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