Whilst the media continues to feast on the SMM and Mr Mutumwa Mawere saga it appears the whole nation is now too heavily invested in blame apportioning whilst missing a clear and perfect opportunity to show the whole world that Zimbabwe welcomes investors and the environment is changing for the better.
The way forward really is for Mr Mutumwa Mawere to be given back his business empire or whatever remains of it since its widely reported that the empire is now in ruins. This case presents an opportunity to send a clear message to investors and the international community that Zimbabwe has rule of law and investors are secure.
The economic empowerment and indigenization message will seem like a mere political slogan and empty ploy if the Mutumwa Mawere and SMM case is left to keep dragging on and on without any end in sight .Mr Mawere is an experienced business person whose skills ,contacts ,network and experience are desperately needed as Zimbabwe embarks on the economic empowerment and indigenization revolution.
When such sagas unfold normally the key participants feel the need to accuse and counter accuse but no-one really benefits from counter accusations flying all over the Media. This matter has been well documented and its never short of new twists and new revelations.
However there has been a dramatic loss of jobs reportedly around 19,000 jobs were lost in the whole Mawere specification, SMM reconstruction and Mutumwa Mawere de-specification drama. Is it not time that a new leaf be turned in the Saga and let Mr Mawere focus on rebuilding his business and create jobs?
It is imperative to note that job creation must be central to poverty alleviation in Zimbabwe. Jobs are created under a certain secure investment environment. Zimbabwe’s decline over the last decade has been blamed on politicians and politics. There hasn’t been a clear effort to seek to properly avoid the blame game which is counter production and only serves to increase tension whilst leading to a deteriorating investment climate.
As Zimbabwean we have to commit ourselves to economic freedom in our lifetime. This economic freedom can only be brought by a broad based economic empowerment revolution led by such experienced individuals like Mr Mutumwa Mawere.
In 1995, he founded Africa Resources Limited (ARL), an investment holding company incorporated under the laws of the British Virgin Island, before moving to South Africa. In August 1995, he approached T & N Plc the UK domiciled parent company of Shabanie & Mashaba Mines Private Limited (SMM) with a proposal to acquire the company's Zimbabwean subsidiaries i.e. the asbestos mines, two Zimbabwean industrial companies and a Zambian manufacturing company. Negotiations began in September 1995.
In November 1995, he formed a partnership with Investec Bank Limited, a South African investment bank, to structure and mobilize financing for a mining private equity fund.
While working on the private equity fund, he continued his negotiations with T & N that culminated in an agreement in March 1996 pursuant to which ARL, a company in which he is the sole shareholder, acquired the remaining mining and industrial assets of T & N in Zimbabwe and Zambia.
Since the acquisition of T & N's two UK based companies that were the sole beneficial owners of the Zimbabwean and Zambian companies, the ARL group of companies grew organically and through acquisitions to become one of the largest and diversified black controlled conglomerates with operations in South Africa, UK, Zambia, Namibia, and Malawi employing about 20,000 people and generating a turnover of about US$400 million.
The current calls by the Government of Zimbabwe to encourage investment ,broad based economic empowerment and indigenization must be complimented by visible positive steps such as resolving the Mawere and SMM for the benefit of the country and hopefully the 19,000 jobs can be re-created in the medium to long term.
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This article was prepared exclusively for 3MG MEDIA by GMRI Capital a Division of the ENG Capital Group.
Sunday, January 9, 2011
Tuesday, January 4, 2011
After reading the latest instalment by Mr Mutumwa Mawere, where he argued convincingly that the tolerance limit in the developing world is so low to make it easy ,comfortable and rewarding for bad and unethical accountants to prosper. I began to reflect on my own circumstances and experiences and could find no better explanation to the reprehensible conduct of a chartered Accountant Reggie Saruchera of Camelsa (ENG Liquidator) who is a registered member of ICAZ and in good standing than the fact that there is no effective self regulation in professional bodies whose members would rather point fingers at politicians and political parties rather than their own role in under mining black capital formation ,the rule of law and democracy.
Although I have abundant evidence confirming the misconduct and unethical behaviour by Saruchera ,I took the decision not to lodge complaint against Saruchera as required by law because I could find no evidence since Independence where ICAZ has acted against one of their own in the public interest. It became clear to me of the hidden hand of certain professionals in aiding and abetting destruction of black entrepreneurs and reverse black capital formation but rush to blame politicians or political parties without people like Saruchera taking responsibility of their negligence and unethical behaviour.
Such low confidence in professional bodies has a lot to explain about why Zimbabwe is where it is. In addition to blame statecrafters as suggested and proposed by Hon Minister Biti in his debate with Nathaniel Manheru with Mutumwa Mawere reviewing respective points I also suggest we critically examine the role of professionals in the decay that has visited Zimbabwe. The problem is beyond politicians or a political party.
I came to this conclusion because of my own real life experience at the hands of Reggie Saruchera whom I had mistakenly believed to be a professional guided by the Institute of Chartered Accountants of Zimbabwe (ICAZ).So just because someone is a member of the Institute of Chartered Accountants of Zimbabwe (ICAZ) we can not simply assume they will act professional.
I think we are closer to being victims of witch craft than statecraft because the state has been hijacked by opportunistic ,ambitious ,dangerous and greedy individuals who remotely feed politicians with poisonous advice and ideas .Some of them are Ministers who remain silent choosing to blame Mugabe or the misdeeds of their own kind. We must take a close look at professionals and their bodies if they can support the Indigenization and the broad based empowerment revolution which Zimbabwe has embarked on.
In the ENG saga Saruchera’s conduct is so reprehensible to demand an outrage. And the relevant body such the ICAZ must take corrective action .The tolerance of limits of some our professional bodies leaves a lot to be desired ,its so easy, comfortable and rewarding to be a bad accountant and get away with it as demonstrated by Saruchera and Camelsa whilst seeking to blame political actors .
After bail was denied was forced to volunteer liquidation. I knew I was in serious trouble but wasn’t actually sure the nature of the crime. The liquidation was involuntary as it was induced because of my imprisonment. The Courts demanded a payment plan which we only produced by securing creditors by applying for liquidation.
I have been in state of disbelief of the conduct of a chartered of a chartered accountant registered with ICAZ. It still bleeds my heart. Whenever my daughter asks me about possibility of being a chartered Accountant I quickly discourage her.
We need accountants who believe in proper broad based economic empowerment. If Saruchera acted in accordance with the law and within his professional guidelines and ethically then ENG case would have been properly concluded without any future ownership disputes such as the one involving me and Interfin Bank Holdings over Century/CFX Bank.
In terms of the Prevention of Corruption Act, the assets of specified persons must be protected and preserved and yet in terms of the Companies Act, the liquidator is empowered to dispose of the same assets.
On the one hand, I could not challenge the actions of Saruchera without seeking Saruchera’s permission. And Saruchera as a chartered Accountant and member of the Institute of Chartered Accountants of Zimbabwe ought to have known that you cant be both Liquidator and Investigator. This is clearly unethical,unacceptable and outrageous. Its even worse that the Institute of Chartered Accountants of Zimbabwe continue to have Saruchera and Camelsa as members in good standing.
After Saruchera started showing unacceptable conduct and after several letters seeking redress I and my co-contributory Nyasha Watyoka resolved to seek Saruchera’s removal from office as liquidator.I filed high court case HC- 6244-04.This case is still pending before the high court in Harare. Instead of responding to the my high court HC 6244-04 application seeking his removal Saruchera sought political intervention by applying for my specification just because I had challenged his illegal attempt to dispose shares which he didn’t have express authority to dispose.
As a professional Saruchera should have known that when facing a court action you respond legally not politically. His application to the Minister was solely for the aim to tie my hands so he could sell ENG Assets without any input from me or my co-director even though it was our company he was dealing in.
The fact must be made that once Saruchera applied for himself to be appointed as Investigator it is a puzzling mystery why he then continued to also act as liquidator. Can we blame a Minister ,a politician or a Political party for actions like these which were done by a professional? Can someone become both judge and prosecutor?
In the application to remove Saruchera, it is obvious that as liquidator he should have had no interest in remaining as liquidator especially if persons with interests in the estate feel injured.
However, fully cognisant that his services were not welcome in the administration of ENG, Saruchera accepted the mandate to be investigator pursuant to the operation of the Prevention of Corruption Act and more importantly, he continued to act as liquidator.
Saruchera is a qualified accountant and a member in good standing of the Institute of Chartered Accountants of Zimbabwe (ICAZ). The Institute is a creature of statute and is the sole organisation to award the Chartered Accountant designation in Zimbabwe. It is regulated in terms of the Chartered Accountants Act Chapter 27:02 as a professional body. Should we blame politicians for the failure of the Institute of Chartered Accountants of Zimbabwe (ICAZ) to rein in one of their own when they go on a rampage disregarding ethical standards?
The conduct of Saruchera and Camelsa in the ENG matter must, therefore, be a matter of public interest and is it not strange that we have not seen any outrage being expressed by the ICAZ about the manner in which the ENG matter has been handled by one of their own?
The reasons for lack of an uproar maybe because most people did not know that Saruchera was both Liquidator and Investigator.
What should Saruchera have done in this matter? Should he have applied for and accepted the dual mandate of Investigator and Liquidator as he did?
As a liquidator, he had a fiduciary responsibility to the creditors , contributories and shareholders, including my co-director and share holder Nyasha Watyoka and myself, and yet in terms of the Prevention of Corruption Act, he did not owe any responsibility to us rather he reported directly to the Minister of Justice to whom I suppose he did not explain that he could not be investigator and liquidator at the same time. After such clear facts it becomes clear that sometimes we blame politicians and political parties when the blame should squarely be on professionals like Saruchera and Camelsa who mislead these political leaders.
Gilbert Muponda is an Investment banker he can be reached at email@example.com
Saturday, January 1, 2011
Today, 1 January 2011, being the first day of the second decade of this African century provides another opportunity for us as Africans to reflect on what kind of Africa we want to see.
To the extent that the future is a product of human actions and choices, we can shape the future by the decisions we make today and more significantly by the actions that flow from the decisions made.
To me, the just ended year brought with it my de-specification. I was specified on 9 July 2004 together with Messrs. James Mushore and Francis Zimuto.
As I looked back at the 6 years, I am comforted that I have not been alone in the bus. The bus that I took a ride in 2004 already had passengers including Mr. Gilbert Muponda, a Zimbabwe-born entrepreneur who was forced to leave a country of his birth because of a real threat to his life; Mr. James Makamba who became the first high profile person to spend about 7 months in remand prison for a crime he did not commit.
As I sit today trying to understand the Africa that can be possible if the state is controlled by a few wise but evil persons, I just discovered that no attempt has been made to make a head count of all the people who were forced to ride on this bus.
I discovered that the majority of persons specified on allegations of externalisation were black. Some were professionals while others were business owners.
What is remarkable is that after 6 years of madness, no attempt has been made for the passengers to come together to exchange experiences and really to compare notes.
The experiences that we have been subjected to are now part of the heritage of Zimbabwe and yet very little has been recorded of this ugly period. Who was behind this onslaught on personal and property rights?
The first victim was Mr. Muponda and his colleagues at ENG. While it is easy to reduce Muponda's ordeal to a personal matter, it is important that the nation be told why if ENG was insolvent, Muponda and fellow directors were arrested and subsequently specified.
In a constitutional democratic order, it is not unusual that companies fail and the law has adequate protection for genuine creditors yet in the ENG matter we saw for the first time the emergence of a new order. Under this order, law enforcement authorities were called to action and new laws were introduced to allow for the persecution of targeted persons.
As we begin this year, we cannot escape from the sanctions debate as it relates to the GPA arrangement and yet the sanctions imposed on people like Muponda continue to exist well over 24 months of the existence of the GPA government.
When I read yesterday that Muponda had appealed to Hon. Chinamasa for his specification order to be revoked, I knew that Muponda was on his own.
It is often difficult for anyone to imagine what must be going on in Muponda's mind on this day. I am reminded that in the class of the specified persons, there remains a number of persons whose specification order are still in force. Such individuals include: Messrs. Jabulani Manyanga, Francis Zimuto among others.
Although Mr. Makamba was de-specified in May 2010, a warrant for his arrest is believed to be still in force notwithstanding the fact that he was acquitted by a court of law.
Mr. Muponda was specified in terms of the Prevention of Corruption Act (Act). This piece of legislation was intended to allow the state to investigate a specified person while preserving his assets. The legislation was not meant to legally disable a specified person from defending himself while his property was under attack.
Precisely who has an interest in preventing Muponda from returning to Zimbabwe? Surely it is not the creditors of ENG. Who was behind the arrest of Muponda? It could not be creditors of ENG whose protection could only lie in the laws existing at the time.
In the ENG matter, we saw for the first time the use of criminal law to regulate the relationship between a creditor and a debtor. This raises a question regarding the legal and constitutional order that would allow for the RBZ to interpose itself as a complainant in a dispute involving competent creditors and a vulnerable debtor.
As we stand today, there is creditor who has reported any financial loss from ENG. More significantly, Muponda finds himself with no access to the very assets that were meant to be protected under the Act.
During 2010, Interfin took control of CFX Bank, one of the assets formerly under the control of ENG before this bizarre saga. Muponda has sought to argue that the transaction was illegal and this found him at loggerheads with the shareholders of Interfin.
If the rule of law existed, should Muponda be at loggerheads with Interfin shareholders? When one looks at the timeline, it will be obvious that Muponda lost control of his empire at the hands of state actors and not creditors of ENG.
The law states that any transaction involving the disposal of the assets of a specified person during the period of specification is null and void and yet Interfin has sought to argue that notwithstanding Muponda's continued specification, the deal involving CFX is above board.
It is incumbent upon all of us to be the custodians of a just and equitable society. Should Muponda as a victim be left to his own devices to restore his rights or should it be our collective responsibility?
When Hitler targeted gypsies, many chose to ignore and as he gained confidence in undermining the rights of citizens no one was safe. If Muponda is not safe and the tolerance for abusive behavior exists, then we are all at risk and poorer for allowing absurd situations to define our generation.
As we look forward, we need to critically reflect on the journey traveled and draw lessons hopefully on how not to behave lest the strong of today will be the Mupondas of tomorrow.
The importance of the respect of the rule of law cannot be overstated. What happened to ENG can happen to any corporate citizen of Zimbabwe.
History will no doubt be the judge but it is important for our generation who are privileged to know what Zimbabwe lost by the collapse of ENG to register our distaste about the manner in which laws were used for improper purpose while the authors of this kind of behavior remain unaccountable even with the emergence of the inclusive government.