Events leading to the rise and fall of SMMH – (What we know so far).

According to Tawanda Madamombe who is the follower and a friend of SMMH, below are the events that led to the rise and fall of SMMH.

Tawanda Madamombe (FOSMM)
Tawanda Madamombe (FOSMM)
  • -1982 Formation of Minerals Marketing Cooperation (MMCZ) by the Zimbabwe govt to oversee mining ventures, buy and export all minerals.
  • -1988-Mawere joins the World Bank under the young professionals programme.1989 joins the private sector of the World Bank “International Finance Cooperation “until 1995 when he relocated to South Africa.
  • – Early 1990s -It became clear that Canadian Turner and Newall (T&N), were going to sell their African Associated Mines,which owned Shabanie Mabhaba Mines.Export of asbestos to Europe was threatened by the impending ban of the mineral and the resulting slump in business.
  • -Early 90s Mawere learns of this development (T&N was selling), secures the London registered SMMH which was wholly owned by Africa Construction Limited and it being a subsidiary of Africa Construction Limited. Mawere was and is the Chairperson of Africa Resource Limited.
  • -Sometime during the same period Mawere is introduced to the president Robert Mugabe by the then finance minister and former ally Emmerson Munangagwa. The president was on an official visit to South Africa, he reassures Mawere of his support for the project.
  • -1995-Mawere makes a bid for the purchase of SMMZ and THZ from T&N whilst still working for the World Bank, the same year T&N agrees to a sale deal. After having failed to secure credit lines for the total purchase, he had finally convinced them to a sale and purchase deal.
  • -Under the agreement, U$60 million was to be paid from export proceeds, whilst on the other hand, working capital for SMM was to be secured from local banks.
  • -Local banks would provide working capital under MODs (Memorandum of Deposits), these were NMB, Trust Merchant Bank, Heritage Investment Bank and Universal Merchant Bank.
  • -The conglomerate of local banks would receive the facility through the Belgian bank KBC
  • 1996-Mawere is the beneficial shareholder of ARL.ARL and T&N reach an agreement in March 1996 on the Sale and Purchase Agreement (SPA)
  • Under the terms of the agreement Shares of SMMH (subsidiary of ARL) were used as security against non-payment of the purchase price of $60 million.
  • -By 1997 more than half of the US$60 million had been paid.
  • -1997-1998-SMMH defaulted payment of the purchase price of T&N interests. An amount $23 million was still pending.
  • Under the terms of the agreement Shares of SMMH (subsidiary of ARL) were used as security against non-payment of the purchase price of $60 million. The whole amount was to be settled in 5 years. Under a Memorandum of Deposit and Charge.
  • -1997 December-All Memorandum of Deposits (MODs) with local banks stopped by the RBZ, the facility was not to be renewed.
  • -1998-SMMH requests KBC to give it lines of credit directly for the same purpose (working capital) in light of the new RBZ measures. KBC agrees, but since Zimbabwe’s economy was on a downward spiral, KBC requests for a guarantee from govt in March.
  • -Under the guarantee, the MMCZ, the RBZ asserted, was to be the conduit through which SMMH received export proceeds as well as the KBC access its $60 million loan facility over 5 years.
  • -The guarantees were then signed by then finance ministers Simba Makoni and Herbet Murerwa on behalf of the Zimbabwean govt.
  • -The loan was fully settled in 2002(the one pertaining to working capital).
  • -2003-Munangagwa and Mawere in Smoothness wrangle, the latter opposes the release of $1 Billion loan from FBC in which he had interests. Munangagwa was sourcing for the funds through the purchase of shares from M&S (Zanu pf co) by Smoothness which was to get the $1Billion for the process, the proceeds were meant to raise funds for the party’s December 2003 congress in Masvingo.
  • -May 2004 Mawere arrested in SA on charges of externalization of foreign currency, extradition applied for by Zim govt and dismissed by SA magistrate on the 29th of June 2004.
  • -July 2004-10 days after the failed extradition attempts by the Zimbabwean govt, Mutumwa Mawere, Francis Zimuto, Julius B T Makoni, James A K Mushore, are specified under the Prevention of Corruption Act (Chapter 9~16) order issued by then Justice, Legal and Parliamentary affairs minister Patrick Chinamasa.
  • -2004-SMMH is specified under the Reconstruction Act..

Outstanding issues..$18 million owed to T&N by SMMH                        

What is your take and your understanding the SMM matter? Do you agree? Send your comments and join in the conversation.

 

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