nngu007
JF-Expert Member
- Aug 2, 2010
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The government might lose four factories worth over 10bn/-, including a cotton ginnery and a coffee processing plant, for failure to pay its debts to various stakeholders estimated at 1.5bn/-.
The money is owed to former employees of the now-defunct Mara Cooperatives Union (MCU), and to various businesspersons to whom the union had contractual obligations before it became bankrupt and subsequently dissolved in 1996.
Some of these claimants said they were getting ready to present their case for MCU assets seizure at the High Court of Tanzania.
The MCU creditors seek to arm wrangle the government into selling these assets at a public auction.
Bunda districts Kibara and Ushaushi cotton ginneries are among those that will fall under the auctioneers hammer.
Also likely to be sold are Mugango ginnery in Musoma and a coffee processing factory in Tarime District, Mara Region.
Despite promises by President Jakaya Kikwete that MCU debts would be paid off, and that its assets will be redeployed in a new, yet-to-be formed cooperatives union, the claimants said they havent seen a dime.
They further revealed that prior to the Presidents promise to intervene; some had already begun proceedings to get the courts permission to take over ex-MCU assets.
However, the presidents assurance that his administration will settle all debts incurred by now defunct cooperatives had persuaded them to suspend legal action, with the explicit understanding that in due time, they will be paid.
When President Kikwete came into office, he said that among his primary objectives would be to oversee the reinstatement of cooperative unions said one of the claimants, Samuel Chacha.
He added: To this effect, he assured us that the government would pay us what were owed; so that assets belonging to failed unions dont go under receivership. Chacha said he was frustrated that this pledge has not been honoured.
We did business with MCU, using bank loans that have since been called in, driving some of us to declare bankruptcy, lamented Chacha, saying theyve been waiting for the government to resolve the issue since 1996 to no avail.
Another claimant revealed that the claims process is fraught with corruption, saying that some officials from the Ministry of Agriculture, Food Security and Cooperatives had solicited bribes from him so they could process his settlement on time.
They all know weve no money since MCU never paid us; yet these officials ask us to grease their palms to move things forward I say, is that fair? asked the frustrated former MCU creditor.
He added: And when we say we cant, they block our payments.
The petitioners further said they have had to resort to suing the government because they think Ministry of Agriculture executives are deliberately misinforming the President and Premier Mizengo Pinda regarding the progress made in paying off the 1.5bn/- MCU debt.
They revealed that the only recourse available to them at present is a legal one: getting MCU assets auctioned off by the courts so they can finally be paid.
Agriculture, Food and Cooperatives minister Prof Jumanne Maghembe, could not be found for comment, despite repeated attempts by this reporter to get the official position of the government on this matter.
MCU liquidator Juma Mrisho admitted that the cooperative union is indebted to at least 400 people, including former employees, affiliates, business partners and consultants.
However, according to Mrisho, over 300m/- has been released by the government to ex-union farmers during the first round of payments.
Its true they owe us, and they come here everyday Ive been asking them to be patient, the government will pay them, but theyve waited for such a long time that now they feel they have to get the courts to issue a seizure order, said Mrisho.
He added: This is really bad as these assets are worth over 15bn/-, but we wont have any choice if we dont pay them soon.
The liquidating officer further disclosed that this debt is contractually valid, saying that his office has no idea why its enforcement is taking such a long time.
The money is owed to former employees of the now-defunct Mara Cooperatives Union (MCU), and to various businesspersons to whom the union had contractual obligations before it became bankrupt and subsequently dissolved in 1996.
Some of these claimants said they were getting ready to present their case for MCU assets seizure at the High Court of Tanzania.
The MCU creditors seek to arm wrangle the government into selling these assets at a public auction.
Bunda districts Kibara and Ushaushi cotton ginneries are among those that will fall under the auctioneers hammer.
Also likely to be sold are Mugango ginnery in Musoma and a coffee processing factory in Tarime District, Mara Region.
Despite promises by President Jakaya Kikwete that MCU debts would be paid off, and that its assets will be redeployed in a new, yet-to-be formed cooperatives union, the claimants said they havent seen a dime.
They further revealed that prior to the Presidents promise to intervene; some had already begun proceedings to get the courts permission to take over ex-MCU assets.
However, the presidents assurance that his administration will settle all debts incurred by now defunct cooperatives had persuaded them to suspend legal action, with the explicit understanding that in due time, they will be paid.
When President Kikwete came into office, he said that among his primary objectives would be to oversee the reinstatement of cooperative unions said one of the claimants, Samuel Chacha.
He added: To this effect, he assured us that the government would pay us what were owed; so that assets belonging to failed unions dont go under receivership. Chacha said he was frustrated that this pledge has not been honoured.
We did business with MCU, using bank loans that have since been called in, driving some of us to declare bankruptcy, lamented Chacha, saying theyve been waiting for the government to resolve the issue since 1996 to no avail.
Another claimant revealed that the claims process is fraught with corruption, saying that some officials from the Ministry of Agriculture, Food Security and Cooperatives had solicited bribes from him so they could process his settlement on time.
They all know weve no money since MCU never paid us; yet these officials ask us to grease their palms to move things forward I say, is that fair? asked the frustrated former MCU creditor.
He added: And when we say we cant, they block our payments.
The petitioners further said they have had to resort to suing the government because they think Ministry of Agriculture executives are deliberately misinforming the President and Premier Mizengo Pinda regarding the progress made in paying off the 1.5bn/- MCU debt.
They revealed that the only recourse available to them at present is a legal one: getting MCU assets auctioned off by the courts so they can finally be paid.
Agriculture, Food and Cooperatives minister Prof Jumanne Maghembe, could not be found for comment, despite repeated attempts by this reporter to get the official position of the government on this matter.
MCU liquidator Juma Mrisho admitted that the cooperative union is indebted to at least 400 people, including former employees, affiliates, business partners and consultants.
However, according to Mrisho, over 300m/- has been released by the government to ex-union farmers during the first round of payments.
Its true they owe us, and they come here everyday Ive been asking them to be patient, the government will pay them, but theyve waited for such a long time that now they feel they have to get the courts to issue a seizure order, said Mrisho.
He added: This is really bad as these assets are worth over 15bn/-, but we wont have any choice if we dont pay them soon.
The liquidating officer further disclosed that this debt is contractually valid, saying that his office has no idea why its enforcement is taking such a long time.
