Mugabe in new Telecel wrangle

Vincent Kahiya

MAKONDE MP and President Robert Mugabe’s nephew, Leo Mugabe, is involved in a multi-billion-dollar bid to force a company hired by cellphone network operator Telecel to cancel its contract and

cede it to his engineering firm, IEG, documents reveal.


The company, FM Eiving, which has been building base-station containers for Telecel, was two months ago forced to pay a company called Rigger Holdings about $5 billion as “compensation” for allegedly stealing its designs.

Documents to hand show that Mugabe has been pushing Telecel to cancel a contract awarded to FM Eiving and give it to his IEG or to a friendly company, Rigger Holdings.


FM Eiving has since instructed its lawyer Irikidzai Mapulala of Mapulala & Motsi to recover the “compensation” money paid to Rigger. The company has also refused to surrender its contract and is building more base-stations for Telecel. Mapulala yesterday confirmed moves to recover the money but could not give details on the amount of the claim saying that was confidential.


Mugabe yesterday denied any involvement in the alleged arm-twisting, saying his role as a technical partner and director of Telecel was to make sure the two parties did not end up in court as this would delay the network’s roll-out programme. Asked if any money was paid to him, Mugabe said: “There is nothing like that. We did not want Rigger to sue FM Eiving as this would have delayed the roll-out plan.”


There appears to be a close relationship between Rigger and IEG as Mugabe has written to Telecel raising questions as to why Rigger was not awarded the contract. The documents also show that one Cosmas Gwede is listed as vice chairman of IEG while he is also a director of Rigger.


Officials at FM Eiving yesterday confirmed that they had paid “about” $5 billion to Rigger after the company in August demanded $8 billion as compensation for what it alleged was “loss of profit and plagiarisation (sic) of our intellectual property”. The money was withdrawn from Premier Bank, Samora Machel branch.


Rigger Holdings contends that FM Eiving stole its designs and used them to execute the Telecel contract. Officials at FM Eiving yesterday said that was the pretext used to scare them into surrendering money to Rigger. They said there was no way they could have stolen designs as they built base-stations as per specifications stipulated by the network operator.


“We have been doing this job since 1998. How can we be accused of stealing designs this year?” an official said.


But Mugabe in letters to Telecel acting managing director Rex Chibesa last month did not hide his interest in the project. In a letter dated October 4, Mugabe said as a local technical partner of Telecel, he must be involved in technical evaluation and “execution of such project works which can be carried out in-house by IEG as well as in selection, appointment and supervision of other specialist local contractors for outsourced project works”.


He insisted on Telecel availing to IEG, through its representative Gwede, all information on historical and future technical work.


“We are particularly disturbed by the unprofessional manner in which the Telecel Zimbabwe January 2004 tender for supply and installation of civil works for new base-stations was awarded to FM Eiving at the expense of Rigger Holdings,” said Mugabe.


Mugabe in an interview yesterday denied that IEG wanted to take over the FM Eiving contract. However, minutes of a meeting held on September 30, attended by Gwede, Chibesa and Telecel technical director Samuel Duncan, show that Mugabe had intervened in the FM Eiving/Rigger conflict and that FM Eiving had agreed to “cede the outstanding works” (on base-stations) to IEG.


Gwede is quoted in the minutes as having said Telecel would issue a variation order to the FM Eiving contract to effect the changes. Duncan said FM Eiving had not indicated to Telecel that they had reached such an understanding with IEG as they had procured material to execute the contract, according to the minutes.


Contacted to comment on his involvement in both IEG and Rigger and whether FM Eiving had been paid the “compensation”, Gwede at first professed ignorance of the whole issue. When told of a letter bearing his signature, he could only say: “Those are confidential documents you are holding. Where did you get those letters from? I have no comment to make.”


Chibesa refused to comment on the issue.

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