Mawere: on Manikai, First Bank and company seizures

Mawere: on Manikai, First Bank and company seizures

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By Mutumwa Mawere

AS A follow up to the live discussion on the New Zimbabwe.com forum, I think it is important to address the questions raised not only because of their importance but the nature of the questions reflect the lack of understanding about the manner in which I acquired Shabanie and Mashaba Mines (Private) Limited (SMM) and how the companies were managed subsequently. I refer to the question shown below that was raised by one of your readers:

"Mutumwa, you are one of the greatest financial engineers the country has had, and I admire you for spinning an empire out of the rags of Shabanie and Mashaba Mines. However, you have been let down by your former employees because of the unkind manner in which you handled them. You started well by recruiting the best brains the country has...Godfrey Gomwe, Katsande, Mkushi, Manikai, Masvikwa, Gwata but your weakness was to dump them rather than make them equity partners. Do you not see how Munyati, Peter Moyo, Tembo and others have now become you enemies rather than allies?"

I have already dealt with some of the background information regarding the acquisition. Whereas Messrs. Gomwe, Katsande, Mkushi, Munyati, Peter Moyo, Masvikwa, Gwata, and Tembo did work for my group of companies, Mr. Manikai has never been employed by the group and it, is therefore, important for me to deal with Mr. Manikai’s case separately. Mr. Manikai has been at the forefront of the government’s illegal seizure of my companies.

"Because I knew too much about the corrupt deal, I believe that it is one of the reasons among many that I am being targeted"

MUTUMWA MAWERE

I have been associated with Mr. Manikai since 1982. I met him through a mutual friend when we were students at the University of Zimbabwe. We have been friends since then and it is true that there has been confusion regarding my business relationship with him. He has never been my partner in any business transaction but has acted as a legal advisor to a number of companies associated with me. After college, Mr. Manikai joined a firm of attorneys, Gill, Godlonton and Gerrans. We continued to interact as friends and as a personal lawyer. I used his law firm as transaction advisor for the SMM transaction in 1996 specifically for the Zimbabwe leg of the deal. The services rendered by Manikai and his law firm were paid from my personal resources. After the transaction, SMM also continued to use the services of Mr. Manikai’s law firm. This relationship continued over the years.

Your readers are justified in asking why the government would appear to target me and not other businessmen. Although, other businessmen have been targeted and left the country, my case has taken a life of its own for a variety of reasons. Firstly, the breath and depth of the operations that we had built under the umbrella of ARL is quite significant. Secondly, I am the only shareholder to have been targeted without any executive and board responsibilities in the companies that have been taken over. Thirdly, there appears to be a political angle to my case that obviously generates conspiracy theories. Fourthly, both Messrs. Gwaradzimba and Manikai who are private sector individuals are being used by the state in my case. Both gentlemen were closely associated with the SMM group as legal and financial service providers. Finally, what is the connection between both gentlemen and the state that would give credence to the overwhelming feeling that there is an orchestrated campaign that is being waged and the public is not being told everything? I accept that I am not the only victim of the state but I am also aware that the manner in which I have been pursued by people that have been helped professionally and business wise by my companies suggests that there may be a feeling that I was unkind to them.

I have reflected on the questions raised and reviewed my relationship with Manikai to establish the underlying reasons for his bitterness. Although I am not related to Mr. Manikai, over the years there has been a close relationship between us. In addition, he was not a business partner although he may have represented himself as such. As my businesses grew, he was under pressure to also be part of the business but the structure of the acquisition deal could not accommodate him. I appointed him to the board of First Banking Corporation when it was started but he had no shareholding in the business leading to bitterness on his part. My companies used his law firm as legal advisors but the appetite for fee income to support his lifestyle continued to grow resulting in some of my companies using other law firms. When I refused to intervene on his behalf, he felt that it was my responsibility to ensure that he was supported. It is true that without our companies’ support, Mr. Manikai’s law firm would have taken a different profile.

Because of my personal relationship with Mr. Manikai, it became increasingly difficult for executives in the group to resist his constant interference. Even in First Bank, he started forcing executives to recruit his friends and relatives. The conflict between the board and Mr. Masvikwa finally led him to leave the bank that he had helped set up. We finally took the decision to remove him from the board when he was appointed by former Minister July Moyo as the Chairman of NSSA. While at NSSA, he began using his position to demand commissions for investments made by the institution forcing me to complain to his partners about the unethical practices. After the incident, our relationship soured resulting in him collaborating with a number of politicians to set up a rival company. Such a company was then set up and the unfolding developments will help to confirm the politics in my case.

I attach herewith (available on request) a copy of an aide me moiré prepared by one of the Executives of First Bank regarding a transaction in which Mr. Manikai was a beneficiary of funds that came directly from the state. The loan application is also attached (available on request). The deal involved the purchase by a special purpose vehicle in which Mr. Manikai was a 50% shareholder from a loan provided by First Bank on the back of a deposit made by former Minister July Moyo from state funds. When the deal was presented to the Credit Committee by Mr. John Mushayavanhu, Manikai had already been tipped to take over the leadership of the bank. Members of the credit committee were concerned about the deal and its implications. I was then approached by Mr. Herbert Nkala who was close to Mr. L. Gwata, CEO of First Bank, to intervene and talk to Mr. Manikai about the unacceptable deal. I approached Mr. Manikai but he told me that I should not interfere for my own good. The deal was then processed under the pressure of some politicians who have now been identified as the Tsholotsho gang. The funds were deposited in the bank by the Ministry and then a payment of Z$800 billion was then made to M & S Syndicate, a ZANU-PF company, for the shares purchased by Smoothnest Investments. The balance of the money was taken by Mr. Manikai and his political handlers. I was naturally outraged by the transaction and threatened to pull out of the bank.

When the President got to know of it, the proceeds of the sale were then paid to the party. I believe that the matter was investigated and I was also called by the Commissioner of Police and the then Minister of Security to give evidence on the matter. I presented myself to the police contrary to the widely held view that I ran away. However, it turned out that because the beneficiary was the party using Manikai who now sits on the boards of many of the party companies, the powers that be were not interested in pursuing the matter. Because I knew too much about the corrupt deal, I believe that it is one of the reasons among many that I am being targeted. Following this incident, a decision was taken by the party to remove me from the shareholding of the bank. This strategy has already been implemented and as a result Mr. Manikai and his political handlers are now in control of the bank. Mr. Nkala who had briefed me about the deal and Mr. Chitambo, the author of the memo, all turned against me. Mr. Nkala has been rewarded and is currently the Chairman of the bank, as well the Chairman of Zimpapers, the state media that is under instructions to continue to refer to me as a fugitive. Mr. Nkala is also close to the Reserve Bank Governor so is Mr. Manikai.

I believe that the above will provide your readers with a better insight into the forces behind my persecution. Having reflected on this matter, I now believe that this transaction may have a direct bearing on the actions of Mr. Manikai who may feel that I should have not intervened to protect the bank’s integrity. Equally, Mr. Manikai may feel that the transaction was his only chance of getting fame and joining the ranks of entrepreneurs in Zimbabwe since legal fees were not sufficient to cover his growing appetite.
Contact Mutumwa Mawere: mmawere@aol.com
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