Fred Mtanda to take over DHL Zimbabwe

BUSINESSMAN Fred Mtanda is set to acquire a controlling stake in DHL Zimbabwe as it emerged this week the company’s parent company, DHL International, intends to exit the local operation amid indigenisation concerns and tax liabilities stemming from off-shore remunerations of key executives, businessdigest has established.
Chris Muronzi/ Clive Mphambela /Wongai Zhangazha

Well-placed sources said Mtanda was widely tipped to take over DHL Zimbabwe given he has a prior business relationship with the company dating back to 1994.

“Mtanda has been doing business with DHL for years and he owns all the premises used by DHL,” a source said.

Mtanda also owns the Western Union franchise in the country, which is mostly housed under the same roof as DHL Zimbabwe.

This comes after it emerged this week DHL Zimbabwe wanted to comply with indigenisation laws in the country.

“It looks like Mtanda will get DHL Zimbabwe,” said the source.
It also emerged this week Asteway Zemedagegnehu, who had been DHL country general manager for the past year, left the country in a huff on Monday this week and has reportedly been assigned to head DHL operations in Uganda.

Sources said the departure of the expatriate country manager was linked to the huge fines DHL was facing from Zimbabwe Revenue Authority (Zimra) as well as the unfavourable terms under which DHL was supposed to comply with indigenisation laws.

However, a senior official in the Indigenisation ministry said he had not seen the proposal.

Under the country’s laws, 51% ownership of all companies operating in Zimbabwe must be in the hands of indigenous shareholders.
“The company will now operate as an agent of DHL International, but will no longer be owned by the multinational company. This means it will be wholly owned by Zimbabweans,” another source said.

The sources said more than 50% of the local company’s employees could face retrenchment under the deal. They added the company’ decision to leave the country had heavily been influenced by the Zimra lawsuit, the political situation in the country and indigenisation concerns.

DHL fell out with Zimra earlier this year over allegations of tax evasion emanating from the payment of executive salaries offshore. DHL was accused by the tax authorities of not remitting requisite taxes on the amounts paid, resulting in the company facing penalties of up to US$2 million dollars.

Acting General Manager for DHL Joe Nyamutumbu confirmed the latest developments surrounding the departure of Zemedagegnehu.

“She has been re-assigned to head DHL Uganda as country manager,” he said.

He, however, denied the company evaded tax but said there was a misunderstanding with Zimra on “how certain things were done and worked” in the company.

“We have since clarified issues with Zimra and there is no longer an issue,” he said.

“Asteway will be having meetings in Cape Town after which she will give me a handover brief. I will be able to give you more details then,” he said.

Another source said the initial proposal was rejected because, it did not include the employees’ contribution, which was not in line with the requirements since current DHL employees were supposed to get shares in the company. Mtanda has interests in the pharmaceutical, automotive and financial services industries in the country.

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