FOSMM WHATSAPP THREAD ON 4 NOVEMBER 2016

  1. [5:55 AM, 11/4/2016] +263 73 214 5751: I think the issue in Zimbabwe is not about the opposition, it is about the people about the people who always believe that someone has to come from somewhere and deliver the change they want to them. Isn’t it a shame to human kind that we still have people who still compares someone who has brought a great nation to a failed state with someone who when he was in government for just a short while brought the confidence that changed people’s lives. Isn’t it a shame that we still have people who after so many years of economic, social and political deterioration, looks up to the current system to revive the situation.
  2. [5:59 AM, 11/4/2016] MD Mawere: Morning. Yesterday I had a chat with Hon Holder about his motion on SMM. Is there anyone interested in the chat?
  3. [6:00 AM, 11/4/2016] +263 77 230 5960: Please do share
  4. [6:00 AM, 11/4/2016] MD Mawere: [03/11, 20:14] mdmawere1: Hi
  5. [03/11, 20:34] John Holder: How you
  6. [03/11, 20:35] mdmawere1: Fine and you
  7. [03/11, 20:37] John Holder: I am ok can. You organise the documents that we spoke of before the 14th
  8. [03/11, 20:40] mdmawere1: I was trying to get a copy of your motion so that we can prepare the necessary documents that may speak to what you deem appropriate.
  9. What are the key areas that you want to be addressed?
  10. [6:02 AM, 11/4/2016] Shingai Ndoro: MDM check for my msg in your inbox. It’s very urgent.
  11. [6:03 AM, 11/4/2016] MD Mawere: Skype
  12. [6:04 AM, 11/4/2016] MD Mawere: Where is the message?
  13. [6:08 AM, 11/4/2016] MD Mawere: We now have a copy of the motion that was penned and given a voice before Hon Holder knew about FOSMM. He is due to make his submissions on 14 November. I urge you to look at the content and context of the motion and whether it speaks to what you believe are the key and fundamental issues at stake. Please feel to unpack the motion in an orderly and concise manner.
  14. [6:28 AM, 11/4/2016] MD Mawere: Please review and add your comments. My comments follow:
  15. [6:33 AM, 11/4/2016] +263 77 230 5960: The preamble does not adequately point out the genesis of SMM misery. What was the cause of non-payment of salaries and wages, poor service delivery, etc
  16. [6:33 AM, 11/4/2016] MD Mawere: 1. We all can agree that it is not factually correct that 15 years ago or in the year 2011, the asbestos mines were closed. The events of use of state power to bring SMM into the state sphere date back to 2004 and not 2001.
  17. It is clear that the facts informing the frame of the motion are at variance with the correct ones.
  18. We have been debating about the facts and circumstances of the criminalisation of the SMM affair and the use of state power. This narrative is missing and so are broader public policy issues pregnant in the matter.
  19. The focus of the author is on the plight of the workers and remuneration outside the contest of spirited state efforts to undermine the jobs.
  20. [6:34 AM, 11/4/2016] Shingai Ndoro: The motion does not recognize that this was a private company, taken over by the state without due process based on false claims about its 1) acquisition and 2) indebtedness to the state which triggered a false premise of a reconstruction order.

For as long as these these aspects are not mentioned as to the cause of the current state of affairs, the motion won’t be helpful and useful.

The “endgame” of the motion is what you read after the statement “Now therefore…”

That endgame is very statist. It seeks to have the state constitute a board to administer the company.

This makes SMM to be like a parastatal or a state owned enterprise (SOE) where the sole shareholder, the state, can run the affairs of a company.

I therefore call upon the motion to be amended before it’s presented on 14 November.

  1. [6:34 AM, 11/4/2016] MD Mawere: We seem to be thinking alike.
  2. [6:35 AM, 11/4/2016] Shingai Ndoro: 👌🏿
  3. [6:35 AM, 11/4/2016] Shingai Ndoro: 👌🏿
  4. [6:38 AM, 11/4/2016] MD Mawere: You are on point. After 12 years, one would expect that this important organ of government whose role in a constitutional democracy cannot be overstated to debate and deliberate issues underpinned by real issues that serve to promote constitutionalism.

It would appear that the company was some welfare entity yet it was operating in terms of laws in existence of general application.

  1. [6:38 AM, 11/4/2016] +263 77 230 5960: Without addressing the underlying cause i.e. The expropriation of SMM and abuse of the law have to be part of the preamble because it will also address some of the issues raised deeper into the motion.
  2. [6:42 AM, 11/4/2016] Shingai Ndoro: 👌🏿
  3. [6:42 AM, 11/4/2016] Shingai Ndoro: 👌🏿
  4. [6:47 AM, 11/4/2016] MD Mawere: President has assured Zuma that SA investments are safe. Is he aware in making this bold statement that his Minister of Justice has no intention to remove the reconstruction act from the statutes of Zimbabwe.

What role can Hon Holder play in exposing the hypocrisy?

The Reconstruction Act is the law of Zimbabwe that was passed before Hon Holder was elected. It has been alive for 12 years.

Hon Holder has not yet connected the possible link between the actions of Mabunda followed by a series of actions including this law in producing a ghost town and ruining lives.

  1. [6:50 AM, 11/4/2016] Shingai Ndoro: The reconstruction act was brought into effect using state of emergency presidential powers was preferred over the insolvency act to expropriate a private company.
  2. [6:55 AM, 11/4/2016] MD Mawere: Does Hon Holder have jurisdiction to challenge the Act? Sometimes when we talk of big terms like constitutionalism, we forget where the points of review can emanate from.

Hon Holder may choose to be silent based on career interests and the motion could have taken the form because parliament ceased to be what it promises in a constitutional democracy long before he joined.

  1. [6:57 AM, 11/4/2016] MD Mawere: Do you think the three gentleman are concerned about what we are talking about or how great they look as senior citizens of Zim? Has anyone listened to Chamisa’s widely circulated speech in parliament on corruption?
  2. [7:00 AM, 11/4/2016] Stanley: We haven’t alerted them
  3. [7:00 AM, 11/4/2016] Tinashe Mpasiri: Having gone through the motion, I am quite appalled that the concern highlighted is just that of the workers prejudiced their salaries.

The motion does not state the mischief of the use of the Recon Act to expropriate the company by a public officer bearer.

The same thinking that former vice president Joyce Mujuru has, that of disregard of property rights is portrayed in the motion. By stating that government should appoint a board to administer the affairs of SMM.

  1. [7:00 AM, 11/4/2016] Tinashe Mpasiri: Mliswa is very much aware of FOSMM
  2. [7:01 AM, 11/4/2016] Stanley: But chooses not to be in the square
  3. [7:02 AM, 11/4/2016] Tinashe Mpasiri: Is he a friend of Justice then?
  4. [7:03 AM, 11/4/2016] Stanley: Him choosing to be silent on the issues at hand I would say no?
  5. [7:03 AM, 11/4/2016] Stanley: But then we can’t force him to
  6. [7:03 AM, 11/4/2016] MD Mawere: Why are you not adding them to the boiling point?
  7. [7:04 AM, 11/4/2016] Tinashe Mpasiri: Is he not a public officer?
  8. [7:05 AM, 11/4/2016] Stanley: Now that I’ve been alerted I will
  9. [7:05 AM, 11/4/2016] Stanley: People that alerted him should use their constitutional rights.
  10. [7:05 AM, 11/4/2016] Stanley: *elected
  11. [7:06 AM, 11/4/2016] MD Mawere: How do you know which Mliswa you are speaking on behalf of. The one before or after elections. Be careful to claim knowledge of living and thinking actors.

What if Mliswa got what he wanted and now is harvesting?

  1. Can you engage him at least before speaking on his behalf?
  2. [7:06 AM, 11/4/2016] Tinashe Mpasiri: That noted.
  3. [7:07 AM, 11/4/2016] Stanley: True MDM
  4. [7:08 AM, 11/4/2016] MD Mawere: There are people who when they are admitted to exclusive clubs forget the issues and the people who they interfaced with to get to the destination. This is not unique to Mliswa. Mugabe throws Moyo under the bus – NewsDay ZimbabwePRESIDENT Robert Mugabe has ordered Higher and Tertiary Education minister Jonathan Moyo to co-operate with the Zimbabwe Anti-Corruption Commission (Zacc) as well as have his day in court in order to clear his name, NewsDay has established.www.newsday.co.zw
  5. [7:08 AM, 11/4/2016] Stanley: https://www.newsday.co.zw/2016/11/04/mugabe-throws-moyo-bus/
  6. [7:09 AM, 11/4/2016] Stanley: Reading this newspaper article and looking at the MDM affidavit written by Mabunda, I see a chain of uniform events
  7. [7:11 AM, 11/4/2016] MD Mawere: What is uniform? Please explain
  8. [7:12 AM, 11/4/2016] Tinashe Mpasiri: Are public office bearers fulfilling their role of delivering the promise of a constitutional democracy?
  9. [7:15 AM, 11/4/2016] Stanley: The use of power by PO bearers
  10. [7:22 AM, 11/4/2016] MD Mawere: How do you connect the facts of SMM and ZIMDEF?
  11. [7:29 AM, 11/4/2016] Dr Vusumuzi Sibanda Sibbs: Morning I think this is the long and short of it, the question is to check on the admissibility of an amended motion and as to whether the MP will also be agreeable to make the amends because this is far from what it is to be addressed but it’s a good start indeed it must be capitalised on.
  12. [7:29 AM, 11/4/2016] MD Mawere: 👋🏾👋🏾👋🏾
  13. [7:42 AM, 11/4/2016] Shingai Ndoro: 👌🏿
  14. [8:32 AM, 11/4/2016] Shingai Ndoro: 1. Any objection that the motion needs an amendment?
  15. Is the hon. MP willing to shed light on the process of amending it and if he is willing to have it amended?
  16. [8:46 AM, 11/4/2016] JNS Musara: before its specification was SMM fulfilling its obligations to the state e.g paying taxes and other levies, any due forex remittances to the RBZ, fair wages for workers, corporate social responsibility?
  17. [8:47 AM, 11/4/2016] MD Mawere: Yes
  18. [8:47 AM, 11/4/2016] MD Mawere: Let us hear from the Hon.
  19. [8:49 AM, 11/4/2016] JNS Musara: of lets hear from HH then hopefully come back to that question
  20. [8:49 AM, 11/4/2016] JNS Musara: ok*
  21. [8:49 AM, 11/4/2016] MD Mawere: 👋🏾👋🏾👋🏾
  22. [8:51 AM, 11/4/2016] Shingai Ndoro: Is this enough to have any private company expropriated by the state?
  23. [9:36 AM, 11/4/2016] +263 77 230 5960: 👍🏿even if SMM was not fulfilling its obligations there are other remedies that are available to various responsible depts of government other than expropriation by the state eg Zimra could garnishee accounts, RBZ could proceed in terms of powers granted to it in terms of the laws etc.
  24. [9:44 AM, 11/4/2016] +263 77 735 0451: M
  25. [9:45 AM, 11/4/2016] Shingai Ndoro: African statists don’t respect property rights more so of an African.
  26. [9:48 AM, 11/4/2016] MD Mawere: I am intrigued by the strategy used in trying to dislodge President Zuma. They tried using rape, fraud, Nkhandla etc but this did not achieve the results.

Come in Thuli who has so far no equivalent in Zim. The Guptas provided the fire and now we know how potent the arguments used are.

The argument being used is clear that public power is sacred. However, in the case of SMM we can see that the same power was borrowed and the perpetrators don’t even know the mischief because we have failed to locate the dispute in constitutional terms.

  1. [9:52 AM, 11/4/2016] +263 77 728 7847: Special Presidential powers only last six months according to law
  2. [9:55 AM, 11/4/2016] +263 77 728 7847: Also the reconstruction bill was only applying to parastatiles and smm was not a government institution
  3. [9:56 AM, 11/4/2016] Lovemore Chukucha: True
  4. [9:58 AM, 11/4/2016] +263 77 728 7847: So there was a over sight RECONSTRUCTION OF STATE-INDEBTED INSOLVENT COMPANIES ACT.pdf30 pagesPDF320 kB
  5. [9:59 AM, 11/4/2016] +263 77 728 7847: And parliament need to know that it was a violation of the constution the right to properties
  6. [10:00 AM, 11/4/2016] Lovemore Chukucha: Chinamasa and his crew must be exposed
  7. [10:01 AM, 11/4/2016] +263 77 728 7847: Yes
  8. [10:02 AM, 11/4/2016] Stanley: How do we expose them
  9. [10:02 AM, 11/4/2016] Shingai Ndoro: Hon. there is a question on the table.
  10. Is it possible to have the motion amended and are you willing to cause it if it’s possible?
  11. [10:03 AM, 11/4/2016] Lovemore Chukucha: There is enough evidence that was provided here on this platform that proves abuse of power for personal interests
  12. [10:04 AM, 11/4/2016] +263 77 728 7847: Its fine as is or it will be watered down we will say everything on that day
  13. [10:05 AM, 11/4/2016] +263 77 728 7847: With out fear or faver
  14. [10:05 AM, 11/4/2016] Shingai Ndoro: The motion has factual errors and it’s recommending that SMM remains expropriated.
  15. [10:05 AM, 11/4/2016] Lovemore Chukucha: Characters of true leadership
  16. [10:09 AM, 11/4/2016] MD Mawere: Are you aware that regulations were promulgated by President and there was no provision for the court to be involved at all?
  17. [10:12 AM, 11/4/2016] MD Mawere: The reconstruction regulations were promulgated on 3 September 2004 which happened to be a Friday and on Monday 6 September 2004 an order was issued in respect of SMM?
  18. [10:14 AM, 11/4/2016] MD Mawere: We need to summarize the journey from 6 May 2004 through 3 September 2004
  19. [10:15 AM, 11/4/2016] Tapuwa Chitambo: ✋🏿
  20. [10:15 AM, 11/4/2016] Tapuwa Chitambo: Hon Holden do u believe that u captured all the facts in that motion?
  21. [10:21 AM, 11/4/2016] +263 77 728 7847: Sort of
  22. [10:23 AM, 11/4/2016] +263 77 587 5828: Where did you get the figure 2000? l believe it is less than half the actual figure
  23. [10:50 AM, 11/4/2016] Shingai Ndoro: The motion has factual errors and it’s recommending that SMM remains expropriated
  24. [11:02 AM, 11/4/2016] Shingai Ndoro: Parliamentary procedures can require a mover of a motion to amend a motion if he/she deems fit.

Without that, the motion will be moved and passed as it is with a consequence of keeping SMM as an expropriated company turning into a state owned enterprise.

  1. [11:04 AM, 11/4/2016] Shingai Ndoro: Alternatively, if it’s too much to ask for, FOSMM can do a formal citizen petition.
  2. [11:07 AM, 11/4/2016] MD Mawere: Anyone who knows the rules and procedures of parliament?
  3. [11:07 AM, 11/4/2016] Shingai Ndoro: For the citizen petition?
  4. [11:08 AM, 11/4/2016] +263 77 230 5960: Maybe Hon Holder can answer the following questions?
  5. does he understand the challenges that we have with the motion in its current form
  6. Is he willing and able to incorporate changes to the motion.
  7. [11:09 AM, 11/4/2016] Shingai Ndoro: If we are to take the citizen petition route, we will still need the Hon. MP to present it as a motion.
  8. [11:09 AM, 11/4/2016] Shingai Ndoro: Section 149 of the constitution
  9. [11:13 AM, 11/4/2016] MD Mawere: I think we can also help to show the faultlines?
  10. [11:13 AM, 11/4/2016] Shingai Ndoro: A CITIZEN PETITION IN TERMS OF SECTION 149 OF THE CONSTITUTION OF ZIMBABWE

The CITIZEN PETITION should not be contrary section 4(1)(c) of Part 1 of the Fifth Schedule of the Constitution of Zimbabwe.

This is because it’s a NOT petition to Parliament to enact, amend or repeal any legislation that will result in financial implications or conferring fiscal obligations on the Executive.

Therefore, a CITIZEN PETITION’s proposed solutions:

  1. Should not be considered to be a Money Bill;
  2. Is not imposing, increasing or reducing a tax for the benefit of the State;
  3. Is not appropriating money from, or imposing or increasing any charge on, the Consolidated Revenue Fund (CRF) or any other fund vested in or controlled by the Government;
  4. Is not compounding or remitting a debt due to the State;
  5. Is not condoning a failure to collect a tax due to the State; and
  6. Is not condoning unauthorised expenditure by the Government,

in terms of 4(1)(c) of Part 1 of the Fifth Schedule of the Constitution.

  1. [11:22 AM, 11/4/2016] +263 77 230 5960: Ok the first issue has been raised on have an accurate background in the preamble outlining how the unlawful expropriation is the underlying cause for the challenges SMM found itself in
  2. [11:28 AM, 11/4/2016] MD Mawere: Thanks i am learning. So it would appear that there is space to amend motions?
  3. [11:30 AM, 11/4/2016] +263 77 230 5960: On able I meant is he able to raise this issue the way we wish it raised seeing as the architects of SMM’s misery are also from his party and it might be a political career threatening move?
  4. [11:36 AM, 11/4/2016] Shingai Ndoro: The amendment will deal with that.
  5. [11:37 AM, 11/4/2016] MD Mawere: I think courage cannot be outsourced.
  6. [12:07 PM, 11/4/2016] Tapuwa Chitambo: True Hon but we need to know what he thinks on the idea of amending that motion? Also what are the shortfalls and recommendations?
  7. [12:12 PM, 11/4/2016] MD Mawere: We can suggest and propose but we cant do it in general terms hence the request for all of to put our hands on the deck and also invite other MPs to do the same.
  8. [12:20 PM, 11/4/2016] Shingai Ndoro: I thought the discussions so far on the motion indicated that the background to the motion has factual errors and that the decision that has to be taken by the National Assembly confirms SMM’s expropriation.
  9. [12:26 PM, 11/4/2016] +263 77 504 8705: Can we point out the errors and maybe help the honourable with the facts he can use in parliament.
  10. [12:45 PM, 11/4/2016] MD Mawere: You are already part of the WE. Let us lead from the intellectual front
  11. [1:18 PM, 11/4/2016] Tawanda Madamombe: Events leading to the rise and fall of SMMH

So many narratives have been given pertaining to the 1996 acquisition of Shabanie Mashava Mines SMM from Turnal&Newall N&T by SMMH and its parent companies Africa Construction Limited (ACL)and Africa Resource Limited (ARL).Speculation after speculation has been raised in various circles in an attempt to make sense of the subsequent specification of SMMH by government in 2004 .

The issue with regards to the the 1996 acquisition of the company and the subsequent issue of the 1998 government guarantee is however fully documented.

It is the purpose of this chronology to outline the issues surrounding the government position on SMMH.Inorder to achieve this goal ,this piece deals with claims raised by government officials against SMMH and this it does inline with the company profile and formation.

In 2005,the then finance minister Patrick Chinamasa made the following  ramarks in parliament.

“Mawere did not use any savings but he used government guarantees to purchase the company”.  Patrick Chinamasa -20 June2005

In order to reverify this claim(that government guarantees were used to purchase the company),a chronology of events leading to the acquisition of SMMH is hereby given.

EVENTS

1-1982 Formation of Minerals Marketing Cooperation (MMCZ )by the Zimbabwe govt to oversee mining ventures, buy and export all minerals.

2 -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.

3-  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 (SMM).Export of asbestos to Europe was threatened by the impending ban of the mineral and the resulting slump in business.

4-Mutumwa Mawere learns of this development (T&N was selling),1995 Mawere founded Africa Resource Limited (ARL) a company registered in the tax haven of British Virgin Islands (BVI) .He was the sole beneficial shareholder of the company.Mawere proceeds to secure the London registered SMMH which was wholly owned by Africa Construction Limited (ACL) and it  being a subsidiary of Africa Resource Limited (ARL). Mawere was and is the Chairperson of Africa Resource Limited.

5-1995-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.Having failed to secure credit lines for the total purchase,he had finally convinced them to a Sale and Purchase Agreement (SPA).

6-(1)Under the agreement,$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.

(11) The shares of SMMH (subsidiary of ARL)were used as security against non-payment of the purchase price of $60 million.At the time of the agreement,the shares of ARL were worth $250 million.The whole amount was to be settled in 5 years signed in a Memorandum of Deposit and Charge (Documents supplied).

7-For the working capital,local banks would provide working capital under MODs(Memorandum Of Deposits),these were NMB,Trust Merchant Bank,Heritage Investment Bank and  Universal Merchant Bank.This was made necessary by the unwillingness of international lenders to lend directly to Zimbabwean companies and more importantly into  asbestos mining ventures.The conglomerate of local banks would receive the facility through the Belgian bank KBC.

8-SMM was the country’s sole asbestos producer and at its peak accounted for 10% of the Zimbaweas revenues.95% of its products were exported whilst the remainder were sold on the local market.

*At this point,it is important to note that the acquisition of SMM was financed by a foreign company( ARL)which pledged its shares for the SPA to proceed.The issue of 1998 government guarantee to Belgian Bank KBC that follows is separate from the 1996 SMM acquisition process altogether!

While there were dificulties,just as in any other business ,T&N was being paid and “they are not complaining”.Mutumwa Mawere@The Herald 13 Nov 1997.

9-By 1997 more than half of the US$60 million had been paid to T&N.

-1997-1998-SMMH defaulted payment of the purchase price of T&N interests.An amount $23 million was still pending.

10-1997 December-All Memorandum Of Deposits (MODs)with local banks stopped by the RBZ,the facility was not to be renewed.

11-1998-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 government in March.

12-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.

13-The guarantees were then signed by then finance ministers Simba Makoni and Herbet Murerwa on behalf of the Zimbabwean government.

14-The loan was fully settled in 2002(the one pertaining to working capital).

*The government of Zimbabwe was only a guarantor to KBC which was lending finance to SMMH,and the loans were fully paid in time.

Political Storms

It is alleged,in some circles,that Mutumwa Mawere ,the sole beneficial shareholder of ARL was actively involved in politics to gain business priviledges.Nonetheless,his alleged involvement goes without proof as evidenced by a speech made by one of the senior Zanu pf officials.

“One such speculative political enterprenuer emerged in the 1990s and was able to secure a government guarantee to buy a mining house,he was even offered a very senior  position within one of Zanu PFs provincial executive committees and he declined” Patrick Zhuwau

2003-4 SMOOTHNEST  SCANDAL–In a politically calculated  move owners of a briefcase company SMOOTNEST, apply for a zw$1billion loan from the local  FBC bank.

According to the application,the loan was  meant to acquire shares in SARE.At the time,SARE  was owned by ZIMRE,NSSA and M&S (a ZANU PF owned  company ).The loan is financed by the Ministry of Labour through the RBZ which is directed to deposit the amount into FBC bank   specifically designated to be a loan to Smoothfest.The minister who authorized the transaction was the then Minister of Labour July Moyo.In their application for the loan,Smoothfest specifically mentions the zw$1billion as the amount they,re applying for.Mawere through ARL owned  23% shares in FBC whilst ZANU pf owned 26%.

Mawere expressed  reservations against the high profile corrupt transaction but since he was not involved in the day to day running of the bank he could only do little and the application sailed through.Smoothnest,,it is then discovered,was a briefcase company and had no security to back up the loan but nonetheless, succeed in its application since the funds were not coming directly from FBC but were RBZ money being formally transacted out through them hence the bank could claim no loss.The amount was used to raise money through the purchase of shares in M&S,a ZANU PF company which owns shares in SARE alongside  ZIMRE and NASSA

The funds raised are then diverted for Emmerson Munangagwas campaign for the VP post.An earlier version of the story is that the funds were meant to fund raise for the party’s congress in Masvingo December 2003 ZANU PF congress ,but this was proven to be untrue.A year later,in 2004 after the appointment of Gono as RBZ governor,a probe is launched into the scandal,Mawere is called in to offer a statement through an affidavit.Mawere confirms his innocence and exposes the real culprits in the matter. As is with most corruption cases,the matter is wrapped under the rags.The amount was never repaid to the Ministry of Labour either.

Cession cour order

2003- Gono appointed RBZ new governor..introduces new measures in which exporting companies were supposed to recieve their export proceeds in local currency.

-Due to the complex nurture of smmh business profile,it was  given a special dispensation to retain 75% of its export proceeds as before in order to remain viable business wize.

The special dispensation is revoked forcing the company to apply for foreign currency from the central bank.

– The effect of the withdrawal of the exemption was the  removal of  SMM from the export value chain.

– SMM under the circumstances could no longer secure goods from SA suppliers such as Petter as it could not get foreign exchange to pay for the goods.

-As a result Petter,one of SMMH suppliers, could not pay to SAS(a marketing company for MMCZ ) affecting the arranging which had worked for years.

-A meeting is convened  between all the interested parties in April 2004

– Petter then approached the High Court of South Africa with the knowledge and consent of SMM Executives and Chairman for an order on an urgent basis under case Number 04/10496 in terms of which SAS was ordered to make payment to Petter in the sum of ZAR74,872,468.49 plus interest of 15.5%.

– SMM was the First Respondent in the matter.

– The cause of action of Petter was a Cession of Rights and Consent Agreement whose validity and date then became a major issue involving the government of Zimbabwe.

-The position of the RBZ was that the cession agreement was void as SMM could never consent to cede to Petter in South Africa its rights and interests to all the payments in respect of exports that it was entitled to receive without the prior consent of the RBZ in terms of the exchange control regulations.

– When the existence of the cession court order of 6 May 2004 was made known to the government of Zimbabwe, SMM executives were summoned to the RBZ and ordered to rescind the court order or face arrest.

– In addition, the board of SMM was instructed to meet and formally repudiate the consent granted by SMM in order to obtain the order.

– The government took an active interest in the matter alleging that the master mind of the cession whose alleged intention was to divert funds due to SMM from SAS to Petter, a company controlled by Mr. Mawere was for his personal gain.

– Accordingly, a decision was taken to charge Mr. Mawere in terms of Zimbabwean law for allegedly orchestrating the cession court order and scheme whose intention purported to be fraud.

– In support of this allegation, it was determined that the cession agreement was a false document on the basis that it was signed on 28 April although it was dated in March 2003.

– The cession agreement was signed by Mr. Obed Manyika Dube on behalf of SMM’s mining division, AAM.  Mr. Dube was the Managing Director of AAM.

– Mr. Dube under threat of being arrested testified that he signed the cession on the instructions of Mr. Mawere.

– Notwithstanding the fact that the cession court order was intended to assure SMM’s South African creditors that they would be paid, it was deemed that its true purpose was to unjustly enrich Mr. Mawere in South Africa at the expense of his Zimbabwean companies.

– The position taken by the government of Zimbabwe is that the alleged diversion of funds deprived SMM of the needed operational funds and this necessitated the intervention of the government.

EXTRADITION APPLICATION

– On 17 May 2004, a Warrant of Apprehension was issued in terms of Section 33(1) of the Criminal Procedure & Evidence Act (CAP) 9:07

– The grounds are that –during the period commencing January 200 to June 2003 a crime of fraud and externalization of foreign currency had been committed by Mr. Mawere,facts surrounding the SA cession order are used as premise.

-On Saturday, 22 May 2004, an application for obtaining of evidence and securing the arrest of Mr. Mawere in South Africa was made to the Director of Public Prosecutions of South Africa the Chief Law Officer of the Attorney General of Zimbabwe.

– According to the said application, the intention was to bring Mr. Mawere in the jurisdiction of Zimbabwe for the purposes of:

#Gaining access to the records of South African companies in which Mr. Mawere was a        director.

#Obtaining affidavit statements from relevant persons in management of the South African companies under Mr. Mawere’s control.

Obtaining and seizing relevant exhibits.

#Obtaining bank statements of account and vouchers including foreign accounts of Mawere and his companies, from the time of their opening to date, relating to all payments in and out of the accounts and also any other South African bank accounts which have done business with Mawere’s companies or in his personal capacity.

#Obtaining and seizing documentary exhibits from any other company within South Africa        which has  directly or indirectly done business with Mawere’s South African companies or with him personally.

#Arresting and extraditing Mawere.

With the  warrant given, Mr. Mawere was arrested on 25 May 2004.  Mr. Mawere was granted bail on 27 May 2004.  On 29 June 2004, the matter was dismissed and Mr. Mawere was dismissed from bail.

SPECIFICATION OF MAWERE

9 July 2004-10 Days after the failed extradition  attempt Mawere was declared a person specified by the then minister of finance Patric Chinamasa.

-Section 6 of the Prevention of Corruption Act [Chapter 9:16] published in the Government Gazette of  9 July 2004 a copy of which is marked Annexure ARL11 was cited in the order.

– Mr. Mawere was specified on allegations that his South African companies had failed for a long time to remit to AAM, a division of SMM, its export proceeds thereby prejudicing the mines of the necessary working capital and in addition failing to meet its obligations.

– It was alleged that Mr. Mawere had externalized foreign currency from Zimbabwe using SMM and that is the basis that the specification in Zimbabwe for facts and circumstances that could only have taken place in South Africa came about.

– The causal link between the cession agreement and the South African cession court order is exposed by paragraph 3-4 of Assistant Commissioner Mangoma in his supporting affidavit in Mawere’s application before the High Court of Zimbabwe under case Number 11951/04 to review and set aside the specification order in which he stated as follows:

(3)              “”I am the leader of a team investigating a case of externalisation of foreign currency in which the specified person and his former Chairman of SMM Holdings, Mr. William Hamadziripi Mudekunye are being jointly charged.

(4)              Allegations are that the accused persons acted in connivance and externalised US$18.5 million, Canadian $628,071.84 and South African Rand 4,151,367.48, the money realised through the export proceeds of asbestos fibre from Shabani and Gaths Mines.  The money was supposed to have been remitted to the Reserve Bank of Zimbabwe.”

-The amounts referred to are exactly the same as the alleged indebtedness of SAS to SMM.

– If Mr. Mawere had not chosen to acquire the citizenship of South Africa and more significantly to remain a resident of South Africa, then in all probability he would not have lost his companies.

-By acquiring the citizenship of South Africa and choosing to establish South African companies, Mr. Mawere exposed himself to the risk of expropriation.

#The facts of this matter show that no judicial proceedings were invoked before the lid was lifted by Hon. Chinamasa.

#The specification of Mr. Mawere was revoked in terms of a letter dated 19 May 2010, a copy of which is attached hereto as Annexure ARL12.

#In terms of section 6 of the Prevention of Corruption Act [Chapter 9:16] by General Notice 345A of 2004, Mr. Mawere, Messrs. Francies Zimuto, James Andrew Kufakunesu Mushore and Julius Bright Tawona Makoni , investigators were appointed by Hon. Chinamasa to investigate the affairs of the specified persons.  With respect to Mr. Mawere, Chief Superintendent Mangoma was appointed as Investigator with effect from 13 August 2004.  A copy of the Notice is marked ARL13.

* SPECIFICATION OF SMM***

#The Minister of Justice, Legal & Parliamentary Affairs declared the following companies deemed to be under the control of Mawere specified persons in terms subsection (1) of section 6 of the Prevention of Corruption Act [Chapter 9:16]:

  • Endurite Properties (Private) Limited
  • Ukubambana-Kubatana Investments Limited (“UKI”)
  • FSI Agricom Private Limited
  • SMM Holdings (Private) Limited
  • CFI Holdings Limited

The specification was done by General Notice 434B 0f 2004 a copy of which is marked ARL14.

In terms of Section 7 of the Prevention of Corruption Act, Mr. Reggie Francies Saruchera of Camelsa Chartered Accountants (Zimbabwe) was appointed by means of General Notice 434C of 2004 a copy of which is marked ARL15 as the Investigator of the above-mentioned companies.

RECONSTRUCTION OF SMM

On 3 September 2004, the Minister of Justice, Legal & Parliamentary Affairs of the republic of Zimbabwe, Hon. Chinamasa, published Statutory Instrument 187 of 2004 in the Government Gazette Extraordinary.

A reconstruction order in respect of SMM was published on 6 September in GN 450/2004 a copy of which is marked ARL16.  The order was issued in terms of Section 4 of the Presidential Powers (Temporary Measures)(Reconstruction of State-Indebted Insolvent Companies) regulations, 2004 in relation to SMM Holdings (Private) Limited.

In terms of the same order, the Minister appointed Mr. Afaras Gwaradzimba to be the administrator of the company under reconstruction assisted by two others.

The Minister and not the Court directed that, from the date of publication of the order:

The company under reconstruction shall be under the control and management of the Administrator;

The Board of the company under reconstruction shall be divested of the control and management of the company’s affairs;

Any person managing or controlling the company’s affairs in any capacity other than simply a member of the board referred to above shall continue in office subject to the control and direction of, and be, answerable to the Administrator.

  1. [1:25 PM, 11/4/2016] MD Mawere: Thanks Tawanda. Perhaps we can also set out the points of departure as far as FOSMM is concerned.
  2. [1:26 PM, 11/4/2016] Shingai Ndoro: #4. Needs factual correction as it has errors
  3. [1:27 PM, 11/4/2016] Tawanda Madamombe: Yes Thats correct
  4. [1:27 PM, 11/4/2016] Tawanda Madamombe: Sure,which aspects
  5. [1:27 PM, 11/4/2016] Shingai Ndoro: Wasn’t that SMMH already existed?
  6. [1:28 PM, 11/4/2016] Tawanda Madamombe: I thought what existed wa smm
  7. [1:28 PM, 11/4/2016] Shingai Ndoro: Both
  8. [1:30 PM, 11/4/2016] MD Mawere: You see the factual challenges. SMM was owned by SMMH. This never changed although Chinamasa tried to argue that T&N was the true owner.
  9. [1:30 PM, 11/4/2016] Tawanda Madamombe: Smm the mine and smmh the company,,saw it as smm was also the pre existing company name
  10. [1:31 PM, 11/4/2016] Shingai Ndoro: MDM, this is a draft.

Kindly copy and paste in word and edit it accordingly.

The narrative needs to be perfected

  1. [1:31 PM, 11/4/2016] Tawanda Madamombe: Thanks for the correction
  2. [1:33 PM, 11/4/2016] Shingai Ndoro: @27848270061 thanks for the first draft. Job well done.
  3. [1:33 PM, 11/4/2016] Tawanda Madamombe: Sure,im tawanda
  4. [1:35 PM, 11/4/2016] Shingai Ndoro: #5. Of 1995 needs a relook. The narrative isn’t well written.
  5. [1:37 PM, 11/4/2016] Tawanda Madamombe: How so
  6. [1:38 PM, 11/4/2016] Shingai Ndoro: #11. Is the source of a big problem if it’s not well explained.
  7. [1:39 PM, 11/4/2016] Shingai Ndoro: Gvt guarantee was for whose benefit?
  8. Who was the borrower?
  9. Who was the lender?
  10. [1:41 PM, 11/4/2016] Tawanda Madamombe: The guarantee was for kbc benefit
  11. [1:42 PM, 11/4/2016] Tawanda Madamombe: Which was lending,,since this is a timeline,the emphasis ought to ve been short and precise
  12. [1:44 PM, 11/4/2016] Shingai Ndoro: Provide answers to the three questions.
  13. [1:48 PM, 11/4/2016] Tawanda Madamombe: 1Kbc,2smmh,3kbc
  14. [1:49 PM, 11/4/2016] Shingai Ndoro: Is this correct MDM?
  15. [1:52 PM, 11/4/2016] Tawanda Madamombe: I dont think its necessary to ask MDM if you already have an alternative answer
  16. [1:53 PM, 11/4/2016] Shingai Ndoro: This is an open discussion.
  17. [1:54 PM, 11/4/2016] MD Mawere: What do you think?
  18. [1:55 PM, 11/4/2016] Tawanda Madamombe: 1 Who is requesting for the guarantee,,,if we,re agreed that its KBC t hen its benefiting the bank

2-Smmh surely is borrowing from kbc directly at this point

3The lender again is KBC

  1. [2:09 PM, 11/4/2016] MD Mawere: This was a restructuring of short term loans that were granted by commercial banks to SMM in the ordinary course of business.

The RBZ had instructed the local banks to offload the revolving loans and therefore SMM’s banks were the beneficiaries of the funds. What then happened is the the short term loans were were paid off to the banks from a Z $equivalent facility granted to MMCZ by KBC as the borrower of record and then on lent to SMM.

The new loan was to be amortised from export proceeds by SMM.

The lender was KBC Bank.

The loan was arranged by FMB.

The repayment was 5 years but the loan was repaid in full before maturity.

It was repaid in 2001.

  1. [2:11 PM, 11/4/2016] Shingai Ndoro: This is the major and major highlight that was used by Chinamasa!

So this section on the timeline needs a concise narration.

  1. [2:12 PM, 11/4/2016] Tawanda Madamombe: I see now
  2. [2:12 PM, 11/4/2016] Tawanda Madamombe: This is the most crucial aspect of the timeline
  3. [2:13 PM, 11/4/2016] Shingai Ndoro: Yes
  4. [2:15 PM, 11/4/2016] Tawanda Madamombe: Were these loans extending to the time of t&n
  5. [2:17 PM, 11/4/2016] MD Mawere: The loans had nothing to do with the acquisition but were to be paid out to the banks that were already creditors to the company.
  6. [2:17 PM, 11/4/2016] Tawanda Madamombe: Ok thanks for your precise answer
  7. [2:23 PM, 11/4/2016] Shingai Ndoro: This is the part that was used by both Charamba and Zhuwao to attack MDM.
  8. [2:23 PM, 11/4/2016] Shingai Ndoro: It has to be detailed enough with supporting documents.
  9. [2:27 PM, 11/4/2016] +27 60 418 0115: apologies for that
  10. [2:28 PM, 11/4/2016] MD Mawere: What was the nature of the attack? What details would be required from the one alleging? Do we shift the onus to the accused to prove his innocence?

What are rule of law prescripts? Should the accused lead evidence in his own defence before establishing the test he has to meet.

Is it not for FOSMM to use this issue to start exposing the deceit that characterised the extrajudicial the reconstruction?

  1. [2:31 PM, 11/4/2016] Shingai Ndoro: It’s all because the finer details of what happened was lacking in the public sphere and those of ill motive pretended to know better and more and then deceitfully attacked you.

Remember the default of a statist is that an individual can’t be innocent until proven.

  1. [2:32 PM, 11/4/2016] MD Mawere: We have shared the documents and I believe a video exists dealing with the acquisition matters
  2. [2:33 PM, 11/4/2016] Shingai Ndoro: That’s good
  3. [2:33 PM, 11/4/2016] MD Mawere: https://www.google.co.za/url?sa=t&source=web&rct=j&url=http://m.youtube.com/watch%3Fv%3D_cCujkV1rok&ved=0ahUKEwjM5r2Gjo_QAhXKKMAKHUO0AX0QtwIIHDAB&usg=AFQjCNGo510V7Q00GodCDGI771mJPbHUwQ&sig2=VMEctl_ePi2v_x_Ge2ZesQ
  4. [2:35 PM, 11/4/2016] Shingai Ndoro: Lumumba!
  5. [2:36 PM, 11/4/2016] Shingai Ndoro: I have nothing more to say
  6. [2:46 PM, 11/4/2016] MD Mawere: Can you help explain?
  7. [2:48 PM, 11/4/2016] Shingai Ndoro: I don’t take him seriously.
  8. [3:01 PM, 11/4/2016] +27 83 282 5190: How can he give them assurance when he can’t do the same for the Citizens
  9. [4:15 PM, 11/4/2016] MD Mawere: What do you think Mugabe’s state of mind is? Do you really think that he knows what we now know? Having chatted with Ms Matibenga, I am pleased by what she had to say about this group.

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