Zim: Plot thickens in Zanu PF companies probe

Original Post Date: 2004-05-14 Time: 14:17:54  Posted By: Jan

Investigations to unravel the veil of secrecy covering a swathe of Zanu PF companies, whose mystique had seemingly gained acceptance, has opened a Pandora’s box that could reveal how senior party politicians became voracious acquirers of wealth. Impeccable ruling party insiders yesterday said as the crack team tasked to lift the lid off Zanu PF companies pounced on the Bulawayo-headquartered Treger Group of Industries this week, it also emerged that there has been a new twist to the probe. They said that former Zimbabwe African People’s Union (PF-Zapu) cadres now want the investigations to cover the companies owned by their now defunct party before the Unity Accord of 1987 that merged PF-Zapu and Zanu PF. The sources said pressure has been rising inexorably on the government to investigate how former senior PF-Zapu politicians ended up owning companies that belonged to the party then led by the late Vice President Dr Joshua Nkomo. They named three senior former PF-Zapu officials who are now also senior Zanu PF members, and some of whom are still serving in government, as the major culprits who used their political muscle to fraudulently take over companies owned by PF-Zapu. The former PF-Zapu cadres, comprising mainly the ex-fighters, wanted the companies to be returned to their “rightful owners”. Although the sources could not disclose details on the disputed companies, they indicated that plans were underway to soon dispatch a delegation from Bulawayo to “have an audience with President Robert Mugabe on the issue”. Although there had been misgivings about the government’s sincerity and commitment to deal with graft, which implicated mostly Zanu PF’s top echelons, the former ZIPRA (PF-Zapu’s armed wing) soldiers, who had lost hope of recovering the companies they claim belong to them, were encouraged by President Mugabe’s pledge that everyone would be in the firing line under the anti-corruption crusade, the sources said.

Initially, sceptics had expressed doubts on whether the government would take the anti-corruption drive to its full expression. They claimed that there was a much more complex story behind the crusade. According to the critics, the anti-graft drive masked a simmering internal succession struggle that had not yet broken out into the open. But President Mugabe has repeatedly said no one would be immune to the government’s efforts to deal with corruption. And the arrest of the beleaguered Finance and Economic Development Minister Christopher Kuruneri last month is the clearest sign yet that the government could be serious about curbing graft. The sources expressed fears that this new turn of events could however set the stage for acrimonious in-fighting, with cracks emerging within the ruling party. They said of particular interest was that what at first appeared like a politically motivated deft move to appease a restive populace ahead of the crucial 2005 parliamentary election was increasingly turning out to be a tactical mistake. This was because the demands by the former PF-Zapu cadres could see the net closing in on two (names supplied) of President Mugabe’s key lieutenants. The two are still serving in government and the third left in 2000 after he lost his parliamentary seat to the Movement for Democratic Change. Meanwhile, the five-member probe team assembled by the Politburo – Zanu PF’s supreme decision-making body – in March this year departed for the city of kings on Sunday and before anyone could suspect its presence, it swooped on Tregers on Monday morning. Highly placed sources told The Financial Gazette this week that the unit, led by Zanu PF finance chief David Karimanzira, targeted three of the six Treger Group subsidiaries suspected to be the hub of murky deals involving the ruling party heavyweights. The Zanu PF committee spent almost the whole of Monday looking into the affairs of Monarch Steel, which manufactures steel window frames, door frames and kitchen units. It shifted its attention to Kango Products on Tuesday, which is into electrical goods, gas stoves and aluminum cookware.

While the managing director of Treger, Berek Davies, could not be contacted for comment as he was said to be away on leave, the group’s operations director, Gerald Keyer, confirmed the presence of the team, which departed yesterday. Keyer said the swoop on the group, which has been fined heavily for violating sections of the Exchange Control Act for illegally dealing in foreign currency, was part of a wider probe targeting other Zanu PF investments. “They have been here since Monday as part of their investigations, but I am not aware of any purported disturbances they have caused,” he said, dispelling allegations made by some employees to this paper that the team was disrupting production. Since the investigations started a month-and-a-half ago, there has been pandemonium and a dark cloud of uncertainty within the Zanu PF companies and among the party’s bigwigs linked to the directors of the companies. The investigations are however, seen as targeted at the Speaker of Parliament, Emmerson Mnangagwa, who is the former Zanu PF finance chief. Mnangagwa has twice been called before the committee to explain his involvement in the companies. There is however, apprehension within the rank and file of the ruling party that the outcome could split the party right through the middle. Zanu PF has built a multi-billion dollar empire out of two investment vehicles – M & S Syndicate, which was set up before independence in 1980 and Zidco Holdings, whose board comprises Jayant Joshi, his brother Manharlal, Dipak Padya, Mnangagwa and Defence Minister Sidney Sekeremayi. The two investment vehicles, whose operations have been highly secretive even to some top members of the ruling party, acquired significant stakes in companies quoted on the Zimbabwe Stock Exchange. These included First Banking Corporation and the Southern African Reinsurance (SARE). Other investments include Tregers, Zidlee and Catercraft. Padya, the finance chief of Zidco, and the Joshi brothers, skipped the country when the net started closing in on them and have since sought refuge in the United Kingdom.

It also emerged this week that the investigating team, which also includes retired army chief Solomon Mujuru, former Finance Minister Simba Makoni and Matabeleland North Governor Obert Mpofu, had failed to locate documents relating to Smoothnest Investments. Smoothnest Investments, which acquired a significant number of shares from S & M under unclear circumstances, is among a number of other companies that would be looked at by the Zanu PF committee. Smoothnest is now a significant shareholder in SARE after it bought shares from M & S, a Zanu PF investment vehicle. Investigations by this paper revealed that indeed the documents pertaining to the company were nowhere to be found at the Registrar of Companies. The file (File Number 17104/03) detailing the directorship of Smoothnest, said sources, might have been plucked out to tighten the secrecy on the actual owners of the company. Commercial lawyer Edwin Manikai, who could not be reached for comment yesterday, is one of the known partners in Smoothnest. Manikai, of Dube, Manikai and Hwacha legal practitioners, chairs the National Social Security Authority board, among other corporate entities. Speculation has been swirling in the market that some powerful ZANU PF politicians could be behind Smoothnest. The investment vehicle, which sparked controversy when it borrowed $1 billion from First Bank to finance the deal, now owns a controlling 18.92 percent in SARE, which represents 2 350 000 issued shares. M & S Syndicate is the third largest shareholder with 18.43 percent or 23 040 000 shares. Other shareholders include NDH Nominees (11.89 percent) and Barnfords Securities Nominees (8.04 percent).

Source: ZWNEWS.COM

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