AFRAS Gwaradzimba, appointed by the government in September 2004 to assume management of assets deemed to be under the control of Zimbabwean-born S
outh African businessman, Mutumwa Mawere, has admitted the state’s involvement in the acquisition of Shabanie-Mashaba Mines (Pvt) Ltd (SMM).
Gwaradzimba told a court in London last month that the nationalisation of Mawere’s business interests was done through AMG Global Nominees (AMG), a shelf company.
The administrator was a witness on behalf of the government in a case in which Mawere’s company, Africa Resources Ltd (ARL), is a claimant against AMG’s acquisition of its assets.
Gwaradzimba said AMG was a nominee of the government and was funded by the Reserve Bank of Zimbabwe through its quasi-fiscal activities to acquire SMM.
Asked by Mawere’s lawyer Francis Tregear before Justice Evans-Lombe of the Company Court, Chancery Division, to confirm that he and AMG were government nominees, Gwaradzimba initially said he was a nominee of the RBZ, but later admitted that he was representing the government.
According to a transcript of the court proceedings, Gwaradzimba said: “That is correct (I am a nominee of the government). But what I have said as well is correct in that I got it (funds to run SMM Holdings) from the Reserve Bank of Zimbabwe.”
In a related development, Gwaradzimba denied under oath that SMM had received funds remitted by Mawere’s other company based in South Africa, Southern Asbestos Sales (SAS), which forms the basis of foreign currency externalisation allegations against the businessman.
Under cross examination, Gwaradzimba first denied that US$700 000 had been remitted by SAS, only to admit later when confronted with evidence that, indeed, the funds were received.
However, in making the concession, he pointed out that as an accountant he did not think that US$700 000 was a material amount.
This was despite Gwaradzimba’s report to cabinet on SMM affairs that no remittances were made by SAS to SMM since July 2003.
Gwaradzimba was confronted with further evidence showing substantial payments made by SAS to which he denied any receipt by SMM alleging that Mawere diverted the funds.
The administrator further denied that a payment of US$1,763 million had been made by SAS in April 2004.
However, documents produced in court revealed that SAS remitted US$1,763 million to SMM on April 7 2004 through CFX Merchant Bank and the bank confirmed receipt of the funds by the mining concern, contradicting what Gwaradzimba said under oath.
“This undermines the case by the government of Zimbabwe that there was externalisation of funds,” Mawere said. “You have to ask yourself why an administrator appointed by an honest government would deliberately lie under oath. This can only be to assist the state in theft of private assets under disguise. Also, why would a government that purports to be transparent use a nominee company to conduct state affairs? Finally, Gwaradzimba is nothing but a creature of a statute whose sole purpose is to pervert the course of justice and enrich himself and his political masters.”
ARL is challenging the “unlawful expropriation of its Zimbabwean assets” by the government using what the company terms draconian measures.
Gwaradzimba was appointed to run the affairs of Mawere’s business empire made up of seven listed companies on the Zimbabwe Stock Exchange and more than a dozen other companies employing about 20 000 people and with an annual turnover of US$400 million.
Mawere’s nationalised interests were owned through two British-registered investment holding companies and the Zimbabwe government is battling to take charge of the firms.
The decision by the government to place Mawere’s companies under the control of Gwaradzimba was based on allegations that on March 31 2004, SAS was indebted to SMM Holdings pursuant to an asbestos buying agreement concluded between the two companies on November 15 2002.
SAS allegedly owed SMM Holdings US$18 464 595, a Canadian firm $628 071 and R4 515 367.
Mawere allegedly devised a scheme to divert the money owing by SAS to SMM Holdings to Petter Trading Private Ltd (now in liquidation), a company that was controlled by the business tycoon.
Liquidators of Petter, however, communicated to SMM that the allegation about diversion of funds was baseless and unfounded, but the Zimbabwe government applied for Mawere’s extradition from South Africa in May 2004 on allegations that he had stolen the money.
The South African courts dismissed the application, but the government of Zimbabwe specified him in terms of the then Prevention of Corruption Act on the same allegation.
This was followed by the specification of SMM Holdings and related companies deemed to be under Mawere’s control. The final step was then taken to place the company under state administration instead of court administration. The battle between AMG and ARL has been in the UK courts for the past three years and judgement is expected on Tuesday.