IN a desperate bid to save his business empire from expropriation by the state, magnate Mutumwa Mawere last year wrote to President Mugabe seeking dialo
gue on his predicament.
“I have written this note in the hope that dialogue can begin so that the real issues of concern to Zimbabwe can be addressed,” he wrote to Mugabe in June last year.
But this attempt apparently failed to mollify the authorities as government has since enacted legislation to take over Mawere’s business empire spanning the whole economy.
In a faxed letter seen by the Zimbabwe Independent, Mawere explained his acquisition of Shabani Mashava Mines (SMM) and the effect of government’s attempt to take over the business.
Mawere said part of his problems emanated from a “misunderstanding” with the “Midlands political leadership”.
This provides useful evidence that his predicament is politically-motivated.
Government sources this week said there was a feeling in Zanu PF that Mawere was not willing to share proceeds from his business empire despite the assistance he received from government.
Mawere in the letter said his Africa Resources Ltd (ARL) acquired the asbestos mines from T&N plc for US$60 million in a deal that was structured offshore in 1996. He said ARL paid an initial US$37 million, leaving a balance of US$23 million. The servicing of the debt was done through facilities with three local banks until 1998 when the Reserve Bank withdrew support to the financing banks.
Mawere said he sought funding from KBC Bank of Belgium with a government guarantee “that you (Mugabe) played a pivotal role in facilitating”. The loan was paid up in 2002. Mawere said through the acquisition, SMM then stopped paying annual dividends of up to US$15 million to T&N plc. But he said since the acquisition, no dividends have accrued to ARL.
Despite servicing the loan, Mawere said SMM shares were still held by T&N and that attempts to transfer them had “been a cause of frustration to me personally”.
He said politicians in the Midlands province believed that he had abandoned plans to localise SMM, which is incorporated in the British Virgin Islands.
“A misunderstanding then occurred with the Midlands political leadership who may be behind my current predicament,” said Mawere in the letter.
“They are of the opinion that ARL has since acquired the shares from T&N plc and my commitment to localise the company in the manner explained to you have been abandoned,” he said.