Return Mutumwa Mawere’s assets

De-specified Zimbabwe business mogul Mutumwa D Mawere being victimised by Justice Minister Patrick Chinamasa for declining the 2003  Zanu PF Masvingo Provincial offer of a seat in his absentia

The recently de-specified Zimbabwe business mogul now domiciled in South Africa Mutumwa Dziva Mawere must be ruing the fateful day in 2003 when he politely declined to accept his election in absentia as secretary of economic affairs of the then ruling Zanu-PF's Masvingo Province.

He has paid heavily for committing the "cardinal sin" of distancing himself from a party that does not take kindly to anyone it claims to have liberated from colonial bondage showing any sign of ingratitude of the kind Mawere displayed.

Despite his protestations that he was a victim of Zanu PF political vindictiveness for having declined political office in a party he was never a member of in the first instance not few if any bought into his pleadings of innocence given his history of close association with the party stalwarts in Zanu PF such as Emmerson Mnangagwa, President Mugabe, John Mapondera, Jonathan Moyo, Phillip Chiyangwa and others too numerous to mention.

The Zanu PF government vindictively went on the offensive against Mawere to put him in his place first accusing him of externalizing forex and then legislating the Reconstruction of State-Indebted Insolvent Companies Act [Chapter 24:27] that empowered the State to retroactively expropriate assets of individuals on spurious proven or unproven suspicions of financial distress.

He was specified under The Prevention of Corruption Act following failed attempts to extradite him from South Africa over what now turns out to be trumped up charges of illegal externalization of forex in excess of US300 million when it turned out that he could not be extradited as he was a citizen of South Africa.

Embarrassed by the failed extradition initiative and reeling from the Tsholotsho declaration debacle ruthless Justice Minister Patrick Chinamasa teamed up with Mawere’s perceived godfather in Zanu PF Emmerson Mnangagwa to curry favour with the party and show their unstinting loyalty by turning against the under siege business mogul.

Mawere’s diversified Business Empire that included Shabanie and Mashaba asbestos mines, Zimre, CFI Holdings, Turnall, Steelnet, General Beltings, Schweppes Zimbabwe Limited, Fidelity Life Asset Management, and Nicoz Diamond was expropriated by the State in 2004 and placed under administration by Arafas Gwarazimba’s AMG Global.

In February 2005 the government having successfully steered through the Reconstruction of State-Indebted Insolvent Companies Act [Chapter 24:27] placed Mawere’s business empire under reconstruction management by Gwarazimba arguing that Mawere had acquired the empire courtesy of a US$60million government loan guarantee that he was failing to service and thus exposing the State to the unhealthy liability.

On his part Mawere vigorously rebutted the accusation of being indebted to the state arguing that his acquisition of Shabanie and Mashaba Mines (SMM) was a private loan arrangement between his Africa Resources Limited (ARL) and Turner and Newall (T & N) Plc in 1996 through a pledge of shares to T&N by ARL that did not involve government in any way.

He has always maintained that it was only some 2 years after his 1996 acquisition of SMM that the government of Zimbabwe came into the picture in 1998 when ARL sought to refinance SMM through a $60million offshore line of credit from Belgian Bank ABC.

When SMM secured an offshore loan of US$60 million in 1998 the Reserve Bank of Zimbabwe (RBZ) stipulated that the loan be provided by the bank through MMCZ on the grounds that such a loan would be serviced from SMM’s export proceeds.

A government guarantee was issued in favour of KBC Bank and the proceeds of the loan were used to refinance domestic indigenous banks i.e. NMB, Heritage Investment Bank (HIB), and Universal Merchant Bank.

This was so because the Zimbabwean economy was in a downward spiral that discouraged any foreign bank from risking investing in the country without a government guarantee.

The KBC facility was never meant for repayments to T & N and the KBC facility was supposed to be serviced from SMM exports through the Minerals Marketing Council of Zimbabwe (MMCZ) and was indeed paid off in full together with 35% interest instead of the concessionary 15% the government was offering other exporters in 2002 from deductions made on SMM exports amounting to approximately US177million over the 4 year period.

The bottom line is that the government, having suspended direct payments by SMM to T&N to service the 1996 share pledge agreement between ARL and T&N as a condition for guaranteeing the ABC bank refinancing facility of SMM and ensure that servicing of the guaranteed ABC facility took precedence in all SMM debt servicing repayments, was deliberately dishonest to justify the placing Mawere’s businesses under administration in 2005 when SMM had not defaulted exporting through the MMCZ as prescribed by the RBZ.

The Reconstruction of State-Indebted Insolvent Companies Act [Chapter 24:27] stipulates that the Minister need only suspect fraud, mismanagement or for any other cause in a State indebted company that will disable or make it unlikely to be able to make any repayment of a credit made to it from public funds or expose the State to the liability guaranteed by it from public funds on due date, to place such a company under reconstruction administration.

It does not even mandatorily require the Minister to first hear the indebted company’s reasons for incapacitation that justifies his suspicions before placing the company under administration. Whenever the Minister considers that immediate action is necessary to prevent irreparable harm to the company or its creditors, members or employees, he can proceed to place the company under administration before affording the company an opportunity to make representations.

Those are the circumstances that Minister Chinamasa created to justify placing Mawere’s companies under administration without affording them a hearing falsely arguing that Mawere was a fugitive from justice yet all his companies were run by known Boards of Directors in charge of the entities that he could have heard from but for his obsession with victimizing Mawere he chose to ignore.

Aware that its initial reasons for placing Mawere’s business empire under reconstruction administration was falsely premised on the mogul benefiting from a State guarantee over a debt hat had long been liquidated in 2002, Minister Chinamasa whose only reason of peddling the guarantee falsehood was to get Mawere’s business out of his control and open them to insider scrutiny by a government appointed internal investigator disguised as an administrator, requested Gwarazimba to establish the actual level of government financial support towards Mawere’s business empire.

When it astonishingly turned out that Mawere and his companies were not indebted to the State in any way justifying putting his business empire under reconstruction management the embarrassed Justice Minister roped in the Reserve Bank to save his back by assuming (SMM)’s $30 billion loan from Financial Holdings Ltd (Finhold)’s books to its register on the pretext that it was protecting “classified strategic investments”.

The real reason though was to create direct indebtedness of SMM to the State to justify the placement of the company under reconstruction administration.
Gwarazimba was and is still earning gobs mucking 6% of the turnover of the Mawere Business Empire under his administration that he would lose if he failed to cooperate with Chinamasa.

How much of the 6% ends up in Chinamasa’s deep pockets will never be established but it is safe to conclude that he is not doing the donkey work for his paltry Ministerial pay alone judging by his enthusiasm to preclude Mawere from having his companies restored back to him now that he has been de=specified.

Arafas Gwarazimba meanwhile has come out guns blazing in defence of his continued hegemony over Mawere’s properties forgetting that in the recent past he had indicated that he was not calling the shots over Mawere’s properties but the government was.

“The relevant authorities will make the announcements and pronouncements as and when they are due," he recently indicated when asked to respond to allegations by Mawere and SMM employees that he was fleecing the company of the cream of its revenues and running down the enterprise for personal benefit.

Now he has come out ahead of the relevant authorities to announce as follows;
"Mr. Mawere was de-specified and that has nothing to do with the reconstruction process. It is the State that has de-specified him and that will not affect my work to reconstruct SMM,"

Why would Mawere’s de-specification have no bearing on the reconstruction processes of his companies that were placed under reconstruction administration when he was specified under the Prevention of Corruption Act, in 2004 over allegations of externalising foreign currency that are by his de-specification before conviction in court proven to have been false?

Could it be that due to the manner in which Gwarazimba has run down the companies he realises that if government returns the companies to their rightful owner, Gwarazimba will lose the 6% earnings hw is creaming and may be faced with a legal suit for deterioration he has caused in the companies?

What will become of the High Court application by Gwarazimba wherein he sought to blame the forex externalization by Mawere that never was for the demise of SMM that he has amply quantified if not that now that Mawere has been exonerated the tables in that application will be turned against Gwarazimba?

What about all the sickening lies Gwarazimba peddled that THE Reserve Bank of Zimbabwe (RBZ) assumed SMM Holdings Ltd (SMM)’s $30 billion loan from Financial Holdings Ltd (Finhold)’s books to its register because the central bank was intent on protecting “classified strategic investments” when the reality now turns out to be that it was all a cynical attempt to justify unjustified expropriation of Mawere’s companies by the vindictive State.

What will be the political implications of the RBZ decision to take over SMM liabilities to Syfrets Corporate and Merchant Bank’s credit facility using public funds to underwrite a private company’s transactions to justify vindictive indebtedness off SMM to the State?

If the government was the complainant in Mawere’s companies placement under administration and it has since corrected itself by de-specifying Mawere on what grounds, capacity and by what authority does a mere administrator like Gwarazimba have the temerity to agitate for continued hegemony over companies of an innocent investor?

What about the US$700 000 SMM Holdings (Pvt.) Ltd administrator Arafas Gwarazimba collected from Zambia’s TAP owned by Mawere when there was no direct link between TAP and SMM other than the then specified mogul now exonerated?

The bottom-line is that reconstruction of Mawere’s companies was premised on falsified indebtedness to the State emanating from Corruption allegations the State has belatedly decide not to pursue any more by de-specifying the accused and the government Administrator has no further role to play in companies whose owner is innocent and where there is no link between his companies’ indebtedness to the State.

The logical thing to do in the circumstances is to move to legally restore the companies to Mawere and wait to see what claims if any he will raise against the State and its illegitimate administrator if any.