SENIOR politicians are making clandestine efforts to buy publicly-owned Zisco’s Botswana subsidiaries, Ramotswa/Tswana Steel & Iron Co (Pvt) Lt
d in a shady US$3 million deal.
The move comes at a time when Zisco is embroiled in a major corruption scandal that has drawn in ministers and top managers of the company. Government is trying to keep a lid on the boiling pot.
Sources said top politicians working with Ramotswa/Tswana MD James Chininga and his business manager Shelton Chivhere were trying to acquire the companies that have proved to be critical to Zisco’ operations. The two subsidiaries are owed money by Zisco and have made a lot of payments on behalf of their parent company.
It is said National Economic Conduct Inspectorate (NECI) investigators who went to Botswana to investigate the Zisco corruption discovered plans were already underway to sell the two subsidiaries for US$3 million by repaying their parent firm funds that were used to purchase them in 2001.
Zisco was said to have overpaid by more than US$500 000 to purchase Ramotswa. It was suspected to have been a way of transferring money to Botswana on the pretext of acquiring the company by Zisco officials.
Chininga and Chivhere told NECI that it was their initiative but did not say why they thought it was necessary to take it. Sources said politicians were behind the move.
A letter written by Chininga to former Zisco MD Gabriel Masanga on June 13 last year confirms plans to prise the Botswana subsidiaries from their parent company.
“We hereby confirm that we have paid Ziscosteel US$62 500 being loan repayment towards the US$3 million used on the acquisition of Tswana/Ramotswa Steel & Iron companies,” Chininga said.
“We envisage that, depending on raw material availability, these payments will continue on a monthly basis until the loan is retired.”
Sources said government would lose the two steel-making companies, located 30km outside Gaborone, which are actually viable. Ramotswa was involved in the payment of R1,7 million to South Africa’s Macsteel in 2004.
“Chininga and Chivhere claim it’s their own initiative but one wonders what is the ulterior motive for this kind of decision,” the sources said. “Who is behind this? We hear there are senior politicians behind-the-scenes.”
Zisco, the largest public enterprise and only integrated steelworks north of the Limpopo, is registered as a private company which is owned 91% by the government. The other 9% is owned by six different shareholders.
Its group of companies include Zisco Distribution Centre which sells its products, Lancashire Steel, that produces items like brick force, gates and galvanised wire, Zisco Mines dealing in iron ore, Ramotswa/Tswana Steel which manufactures steel products and the Ziscosteel Agricultural Manufacturing company that makes ox-drawn ploughs, scotchcarts and hoes.
The steel giant also has subsidiaries in South Africa, Namibia and Zambia. Zisco owns these entities 100%.