Mugabe, Ministers Fight in Mawere Saga

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A FIERCE battle drawing in President Robert Mugabe and his ministers has erupted between Reserve Bank governor Gideon Gono and SMM Holdings (Pvt) Ltd administrator Arafas Gwaradzimba over the return of business tycoon Mutumwa Mawere’s seized companies.

This comes amid a growing political conflict over the controversial issue connected to current power struggles.

The fight pits Mugabe, Gono, and Mawere on the one side apparently against Gwaradzimba, Justice minister Patrick Chinamasa and Defence minister Emmerson Mnangagwa on the other. Chinamasa this week said court cases against Mawere must be intensified.

It forms part of wider corporate and political power struggles which threaten to expose a hidden nexus between politics and business. The veiled interface between corporate moguls and politicians is partly at the heart of the country’s poisoned political environment and the ongoing scramble for wealth and power.

The current clash is dominated by heated exchanges between Gono and Gwaradzimba. Gono accuses Gwaradzimba of creaming off Mawere’s  companies by collecting  6% of gross proceeds of the sprawling empire and selling off its assets.  This has triggered accusations and counter-accusations of “looting of primitive accumulation proportions” and a resultant “wreck and ruin” of the SMM empire under the rubric of “reconstruction”.

Informed sources said there has of late been a flurry of meetings, telephone calls, emails, faxes and other forms of communication, as well as court battles in a bid to resolve the problem which started in 2004.

After recent consultations with Mugabe, Gono has argued Mawere must get back his companies, which Gwaradzimba has dismissed as “interference and ill-advised”. Gwaradzimba has said it would be “inappropriate” for Mugabe to  rescue Mawere who has already been “nailed” in the fight. He said by trying to hand  SMM assets back, Gono  was attempting to “laundry” Mawere’s illegal deeds.”

This has sparked heated exchanges between Gono and Gwaradzimba, roping in Mugabe, Mnangagwa and Chinamasa, among other political heavyweights.  

   
Mugabe met Mnangagwa, Chinamasa and Gono on June 2 to discuss the escalating dispute. The same group again met on Monday to find a way forward.

This latest round of drama started after Mugabe met with Mawere twice during South African President Jacob Zuma’s inauguration in May to tackle the issue which hitherto made them bitter enemies.

Informed sources said Mawere made his case before Mugabe and produced a “pile of documents”. Mugabe is said to have taken the documents with him to Harare to consider the case which has been fought in courts in South Africa, the United Kingdom, Zambia and Zimbabwe.  Sources said Mugabe tasked Gono to assess the documents and recommend a way forward.

Gono then wrote an advisory note to Mugabe on May 14, urging him and government to return Mawere’s assets in the “spirit of the inclusive government and reconciliation”. Gono has also been pushing for the de-specification of a number of exiled businessmen whom he was accused of squeezing out at the height of corporate battles during the 2004 banking crisis and their return home. A number of them were despecified this week.

In his letter to Mugabe dated May 14, Gono said charges against Mawere must be dropped and his companies returned because government had acted improperly during their seizure. He said although he was aware the issues were before the courts, a negotiated settlement could be a better way to resolve the dispute.

“Your Excellency, this advisory brief seeks to highlight pertinent review points on the SMM case that are recommended to form the basis for a resolute way forward on this long outstanding matter,” Gono wrote to Mugabe.

“It is recommended that Your Excellency approve the despecification of Mr Mawere and his companies so as to pave way for a new beginning, particularly in the context of investment promotion and empowerment in Zimbabwe.”

Gono advised Mugabe the central bank was ready to drop exchange control-related and externalisation charges against Mawere. He said allegations that Mawere’s companies were indebted to the state were handled badly as it “violated the law of contracts” between SMM and state entities concerned. SMM was taken over by the government over allegations that it was failing to pay its debts to parastatals and other state entities and that Mawere had externalised millions in hard currency.

Gono said allegations of insolvency against SMM were pursued without fulfilling “minimum procedures of notifying shareholders, creditors, debtors and other related parties” and there were no “judicial hearings” to facilitate the process.

He said Gwaradzimba’s pursuit of “culpability” on Mawere’s part and attempts to bankrupt him were “self-serving”. Gono suggested that the reason Gwaradzimba was doing all this and refusing to allow Mawere to get his companies back was because he was getting an enormous return out of it. He also said there were unconfirmed reports that Gwaradzimba wanted to secure equity in SMM entities.

“Gwaradzimba, the SMM administrator, is getting payments set at 6% of gross proceeds of all SMM companies which is even more lucrative than shareholders themselves, let alone revenues to government,” Gono said. “The administrator’s activities also seem to have entrenched interests of needlessly permanently dispossessing Mawere of all his assets.”

Gono said Gwaradzimba had a conflict of interest in SMM as a former auditor of the company.  
However, Gwaradzimba hit back at Gono, saying his remuneration as administrator was a “contractual matter that was transparently and lawfully determined”.

“The governor was the prime mover and instigator of the SMM reconstruction process, yet he embraces Mawere’s allegations and advances them against the original case,” Gwaradzimba said. “It boggles the mind how the chief complainant in this matter can turn around to become the chief defender…it is too late for the governor to change course.”

Gwaradzimba also said some of Gono’s arguments were misleading “false claims” and were “naïve and mischievous”. He insisted Mawere must not get back his companies because he has “lost 100% of cases in Zimbabwe and South Africa”. (See pages 4 and 5 of the print).

BY DUMISANI MULEYA

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