FINANCE Minister Tendai Biti has vowed to investigate indigenisation agreements reached with various foreign companies amid concern over revelations that a single Harare advisory firm has handled the most lucrative of the deals reached to date.
Brainworks Capital provided advisory servcies on the US$750 million Zimplats indigenisation transaction with a local daily claiming that the consultancy firm could pocket up to US$45 million from that deal alone.
An evidently thrilled George Manyere, the company’s managing partner, said of the Zimplats deal: “This transaction is a further milestone in our quest to building an even stronger advisory business in Zimbabwe and we believe that our specialist advisory services will continue to grow this year.”
And grow they have, with the company revealing in January that it had handled compliance arrangements for Mimosa and Unki platinum mines, gold producer Caledonia Mining as well as cement producer Pretoria Portland Cement.
However, the Daily News claimed Thursday that Brainworks was handed the consultancy contracts without going to tender
But Empowerment Minister Saviour Kaskuwere dismissed the allegations on Twitter, quipping: “Wolves are at the door; nothing to lose sleep over. We forge ahead with our empowerment”
Meanwhile, Biti told a business meeting in Victoria Falls that agreements reached with Implats, Aquarius and Amplats would be scrutinised to ensure they do not “cost the country money”.
According to Bloomberg, Biti said some of the agreements may have to be referred to Parliament for approval.
Zimbabwe’s indigenisation laws require foreign companies to transfer at least 51 percent of their Zimbabwe operations to locals.
In addition to the equity handovers, the companies have also been compelled to donate up to US$20 million to so-called community share schemes.
The programme has however, divided the country’s coalition government with President Robert Mugabe and his Zanu PF party insisting it was necessary to economically empower historically marginalised blacks.
The MDC-T says while economic empowerment was needed, the approach taken by Zanu PF benefits the wealthy elite and does little to solve the country’s employment crisis in addition to scaring away much-needed foreign investment.
Bickering over the policy has escalated lately as parties campaign for elections later this year and, with some analysts suggesting the programme is a potential vote-winner for Mugabe and Zanu PF, the MDC-T has sharpened its attacks.
Biti recently claimed that the community share ownership schemes were potentially illegal adding the foreign firms were, in fact, using them to bribe their way out of compliance with the law.
“There is nowhere in the Indigenisation act that compels companies to donate money to a community share scheme or to any farm or to anything so what you are actually seeing is coercion; companies being forced to part up with US$10 or US$15 million,” the MDC-T secretary general said last month.
“(And) to the extent that there is no company in Zimbabwe that I know of which has actually parted with 51% of its shareholding , you are having the anomalous situation where companies are bribing themselves out of compliance with the act by paying a mere US$ 10 million, US$5 million, whatever is the amount of the community share scheme.”
The claim was however, rejected by Kasukuwere advisor and Zanu PF spokesperson Psychology Maziwisa who accused Biti of “stupid politicking” ahead of the new elections.
He charged: “Just because the law is silent about community share ownership trusts doesn’t per se render the schemes unlawful.
“The Indigenisation Act contemplates broad-based empowerment and community share ownership schemes are a means of achieving that. In ordinary life, one would expect a person of (Finance Minister, Tendai) Biti’s background to understand this very simple legal fact but quite evidently, he doesn’t.
“The programme has helped take the poorest of our people out of abject poverty and given them a once-in-a-lifetime opportunity to make something out of their lives. In the process, thousands of jobs have been created.
"We need jobs in this country and community share schemes have gone a long way in addressing this situation.”