Capital flight hits SUF Holdings

Godfrey Marawanyika

THE specification of companies belonging to business mogul Mutumwa Mawere has had serious effects on Southern Union Financial Holdings, formerly Zimre Holdings Ltd, as the firm has been h

ard-hit by capital flight.


In July government specified firms owned by or where Mawere had interests.

William Mudekunye, a close associate and relative of Mawere, chaired Zimre.


Ben Khumalo now chairs the company in an acting capacity.


Chief operating officer of the life assurance company Solomon Tembo this week said it was still too early to determine if the firm was experiencing any flight or poor investor relations.


“I have not yet heard anything on that but it is possible, but perceptions might be wrong. The appointed investigations would help to clear the air because these are shareholder problems,” he said.


The problems that have dogged Mawere have now indirectly affected the life assurance company, something which could result in policyholders shifting to other competitors.


Analysts, however, this week said problems affecting Mawere could eventually spill into Southern Union Financial Holdings because of the link between the businessman and the then chairman.


Mudekunye has since fled the country and his whereabouts are unknown.

In July, government specified SMM Holdings, FSI Agricom, CFI Holdings and Endurite Properties and in the process appointed Reggie Saruchera as the investigator.


Government specified Mawere in July following his refusal to return home and answer charges of abusing $300 billion.


He is also accused of undercharging and undervaluing the asbestos his company had exported from the country and at the same time did not declare foreign currency to the central bank.


Mawere was chairman of Africa Resources Ltd (ARL), the holding company of numerous subsidiaries such as General Beltings, Turnall Holdings, Shabani Mashaba Mines (SMM), Steelnet, Cernol Chemicals, Tube and Pipe and Pigott and Maskew.


This week government took over the running of SMM to prevent the collapse of the continent’s fifth largest chrysotile asbestos also known as white asbestos.


By taking over and specifying the firms, government intends to preserve the firms’ operations and in the process ensure continuity of operations.


The government expects Saru-chera’s investigations to focus on funding of acquisitions and dealings resulting in the ownership structures, extent of liabilities and borrowings of the companies as well as use of borrowed funds.

Saruchera is also expected to investigate inter-group flow of funds, diversion and foreign currency deals that were conducted and relationships with foreign organisations and players as well as transactions between shareholders and the company.

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