East African Asset Verification & Monetisation

Background

Group of entities with HQ in Zambia, engaged in:
- Bulk import, blending & bagging and distribution of fertiliser sourced from deep water suppliers via Dar es Salaam and Beira, into
- Various East African countries including Zambia, Malawi,
Mozambique, Zimbabwe, Tanzania & Rwanda

Engaged by board (as condition of major funders continued support) on contractual basis to perform an IBR
Major funder was exposed on $70m facility with $10m cash and net realisable value of stock as collateral

Confirmed that a material fraud had occurred in both Zambia (10,000t) and Malawi (10,000t)
Realised approximately $30m from the execution of the stock monetization plan
Secured and realized $3.5m from realisation of leasehold properties, with the prospect of a further similar amount still to be finalized when our engagement terminated

Mobilised and deployed initial team of 9 resources across 5 countries in order to perform detailed procedures
Performed detailed stock verifications on stratified basis (80/20 principle applied) across approx. 20 key sites in order to verify volumes, types, condition and location
Review and evaluated Client:
- Resources – skills inventory (inadequate)
- Records – found to be incomplete, inaccurate and invalid
- Key agreements/ contracts
Researched options for the monetisation of the stock in order to optimise the value of same
Prepared projections of net realisable value of stock under various scenarios
Phased approach included:
- Expanding team to up to 15 members in order to perform ongoing oversight and compliance functions, as well as negotiation and conclusion of commercial arrangements necessary to realise the stock, with both customers and suppliers
- Engaging our BPO team to set up mirror GL to facilitate inter alia cash forecasting on ongoing basis