THE Minister of State for Indigenisation and Empowerment, Paul Mangwana, is angling for Hippo Valley Estates Ltd once the Indigenisation and Empowerment
Bill which has passed through parliament becomes law.
The controversial Bill sailed through the Senate on Tuesday and is now awaiting President Robert Mugabe’s assent to become law.
The law will force foreign-owned companies to sell 51% stake to local people. Businessdigest can however reveal that while Mangwana has been vigorously pushing the Bill, he has been secretly making contingent plans to become one of the first beneficiaries of the law.
Mangwana is understood to have been pushing to take over Zimbabwe Stock Exchange-listed Hippo Valley since May this year through a consortium made up of people mostly from Masvingo.
This could explain why Mangwana has been so eager to fast-track the Bill through parliament.
Sources at Hippo Valley said Mangwana recently approached senior central bank officials to help him find ways to put his plan into action. Mangwana has also approached a local commercial bank to assist with funds and advisory services to set up the consortium.
“He has been pushing this project since May this year. He is now only waiting for the Bill to become law and make the official move,” said a source close to the issue.
“Mangwana’s reasoning has been that Hippo Valley is too big and should either be reduced in size or at least give a stake to locals.”
Hippo Valley’s core business is growing and milling of sugar cane.
Mangwana is also understood to have made plans to acquire Cold Storage Company-Masvingo using the same consortium.
“Mangwana said he was aware that government will soon sell part of its stake in CSC. He said the plan was to sell some of CSC’s abattoirs.
“He wanted advice on how best his consortium could benefit from such developments ,” the source said.
Mangwana denied that he was making plans to take over Hippo Valley. “Your sources are mad. You have been publishing a lot of rubbish of late. You can publish that story at your own peril. If you want to make me rich go ahead,” said Mangwana to businessdigest when contacted for comment on Wednesday.
“I said your sources are mad. It’s rubbish!”
News of Mangwana’s manoeuvres came as other ministers and senior government officials are understood to have started positioning themselves to take over companies in key sectors of the economy.
The banking sector is already under siege from ministers who have already put in their bids to buy majority stakes in foreign-owned banks like Stanbic, Standard Chartered and MBCA as soon as the empowerment Bill becomes law.
Other senior government officials are angling for stakes in the mining sector.
“It’s going to be a looting spree like the land reform,” another source said. “As we speak guys have already distributed some foreign-owned mines amongst themselves.”
The pending scramble for foreign banks could have prompted central bank governor Gideon Gono’s scathing comments in his monetary policy this week.
Gono said those who were interested in the banking sector should apply to the central bank for licences to start their own banks. “…I urge those who are advocating for what seems to be unguided interference with the ownership structures in this industry to consult widely and take heed of the advice of experts in this sector before rushing to push through what could end up being viewed as counter-productive legislation likely to yield worse unintended consequences than what we saw with the recent price controls,” Gono said.
“Some of the careless and mostly uninformed comments we have been hearing of late from certain quarters risk destabilising an otherwise stable industry which has successfully indigenised since the early 90s and has gone through a major shake-up since 2004.”
Gono’s comments could have been targeted at Mangwana who last week said foreign companies including banks that were not happy with the law can leave the country.
“If Standard Chartered Bank feels they cannot continue (operations in Zimbabwe) they can simply go and CBZ can take over. Metropolitan Bank can take over, and FBC can do the same,” said Mangwana. “The 51% is only a minimum; we even want 90%. “When you are carrying out a revolution you do not do it in half steps. Zimbabwe cannot be half independent.”