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RBZ debt assumption conundrum: The Chinamasa shield
03/02/2015 00:00:00
by Mutumwa Mawere
 
 
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AS expected Hon. Chinamasa refused on Monday refused to disclose to a Parliamentary Committee on Finance and Economic Development chaired by Hon. Chapfika the full details and particulars of the entities and individuals involved in the Reserve Bank of Zimbabwe (“RBZ”) US$1.7 billion debt obligations to various private sector entities including Meikes Limited.

Notwithstanding, Hon. Chinamasa pressed the Committee to approve the proposal to take over the obligations of the RBZ resulting from the madness that characterised Dr. Gono’s reign as Governor, Hon, Chinamasa appealed to the legislators to let “bygones be bygones” as if to suggest that this important matter involving the peoples’ project could be reduced to a personal matter.

The facts and circumstances of this matter are self-evident.  In this matter, the RBZ acted unlawfully and unconstitutionally in assuming the role of parliament and the national executive by not only allocating resources but raiding private foreign currency holdings. Not much disclosure has been made regarding the opaque operations of the RBZ under the control of Dr. Gono.

Although members of the Committee are inclined to legitimize the nefarious activities of the RBZ by approving the debt assumption proposal, the question that seems to be on the agenda which Hon. Chinamasa seems to be determined to avoid relates to the quantum of the debt and the charges that have been applied to the amounts that were extorted by the RBZ.

All that the legislators are calling for appears to be transparency and openness. However, on the face of it, there appears to be no justifiable grounds why a Minister of Finance in a democratic state would seek to blindfold legislators who, in any event, had the duty to allocate the resources to organs of state in the first place.

The absurdity of the proposition that debts that were incurred without the knowledge and consent of the legislature can now automatically and without question be placed on the lap of the already suffering people of Zimbabwe is easily exposed.

It would appear that all that the legislators wanted to establish was the identity of the beneficiaries of the funds with a view to reducing the potential burden on the fiscus and the people in general. Substituting the relevant department of state, Gono introduced the so-called farm mechanization scheme through which farm equipment and supplies were procured using front companies for the benefit of selected farmers.



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Hon. Chinamasa does not want the public to know who the beneficiary farmers are let alone explain why the general tax-paying public should suffer the burden to repay the funds used for private benefit. In a peremptory move, Hon. Chinamasa appears to have already issued Treasury Bills of US$50 million to Meikles without the knowledge and consent of the same committee that has the delegated power to review the proposed bill.

With respect to the Meikles debt, it would appear that the interest of the legislators is to verify the makeup of the accumulated debt separating interest from the principal amount. A number of other questionable entries were highlighted by the legislators but Hon. Chinamasa’s preoccupation was to railroad the bill for reasons best to him and his principals.

My point of departure in this dispute relates to the role of Chinamasa & Gono in the affairs of SMM Holdings (Private) Limited, a company whose affairs touch on the so-called quasi-fiscal operations of the RBZ. SMM was placed under reconstruction on 6 September 2004.

However, on 1 October 2004, Peter Moyo, the then Company Secretary of SMM received an email below from Mr. Hampshire regarding an attempt orchestrated by Dr. Gono to purchase the right, interest and title to SMM’s UK registered parent company, SMM Holdings Limited.

In response to the above email, Peter Moyo advised that Dr. Gono was going to be part of the delegation to negotiate the possible alienation of my company, Africa Resources Limited (“ARL”) from the ownership of SMMH. Pursuant to the above strategy, a meeting was then held in October but Dr. Gono did not attend because his participation in the project was exposed prior to the trip.

As a consequence of the above mentioned negotiations, an agreement was reached between AMG Global Nominees (Private) Limited (“AMG”) and T & N Limited (“T & N”) providing for the purchase by AMG of the securities held by T & N in respect of the shares in SMMH. AMG obtained US$2 million to pay for the securities.  Accordingly to Hon. Chinamasa, AMG was a nominee of the government of Zimbabwe as follows:

What then transpired is that AMG sought to be registered as a shareholder of SMMH which request was rebuffed by SMMH directors prompting AMG to seek the Court’s intervention to rectify the share register. The application by AMG was opposed leading to ARL making a counter application that it be declared the rightful owner of SMMH.

AMG lost the Court battle but proceeded to appeal.  They lost the appeal suggesting that matter had reached its final conclusion. AMG was supposed to be refunded the US$2 million and in turn refund the RBZ. 

Hon. Chinamasa stated during the Portfolio Committee on Mines chaired by the late Hon. Chindori-Chininga that the government of Zimbabwe was the owner of SMM on account of the fact that they were the holders of bearer share warrants in respect of SMMH. In terms of a press statement of 24 October 2010, Hon. Chinamasa stated as follows in relation to SMM’s ownership:

Following the approval of the scheme of reconstruction, the Administrator has been implementing the scheme.

The reconstruction of SMM and the implementation of the scheme have culminated in the change of ownership and control of SMM to the Government of Zimbabwe through Nickdale Investments (Private) Limited, which owns 76% of SMM’s issued share capital, with the balance of 24% being owned by SMM Holdings Limited (‘SMM UK”), a United Kingdom registered company.

SMM UK is in turn owned 100% by AMG Global Nominees (Private) Limited through bearer share warrants on behalf of the Government of Zimbabwe.

Accordingly, it is factually and legally wrong, incorrect, misleading and mischievous to suggest that Mr. Mawere owns or controls SMM and/or its associates in any way.

The truth of the matter is that AMG lost the UK case and as such Hon. Chinamasa lied before Parliament that the government is the owner of SMM through Nickdale Investments.

What is the possibility that the funds in question were drawn from the funds unlawfully procured by the RBZ?  It is my submission that Hon. Chinamasa does not want this information to be known hence, partly, his refusal to disclose the beneficiaries of the RBZ largesse.


 
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