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 Mawereâ€™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 countryâ€™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 Mawereâ€™sÂ companies by collectingÂ 6% of gross proceeds of the sprawling empire and selling off its assets.Â This has triggered accusations and counter-accusations of â€œlooting of primitive accumulation proportionsâ€ and a resultant â€œwreck and ruinâ€ of the SMM empire under the rubric of â€œreconstructionâ€.
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 â€œinterference and ill-advisedâ€. Gwaradzimba has said it would be â€œinappropriateâ€ for Mugabe toÂ rescue Mawere who has already been â€œnailedâ€ in the fight. He said by trying to handÂ SMM assets back, GonoÂ was attempting to â€œlaundryâ€ Mawereâ€™s illegal deeds.â€
This has sparked heated exchanges between Gono and Gwaradzimba, roping in Mugabe, Mnangagwa and Chinamasa, among other political heavyweights.Â Â
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 Zumaâ€™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 â€œpile of documentsâ€. 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.Â 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 Mawereâ€™s assets in the â€œspirit of the inclusive government and reconciliationâ€. 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.
â€œYour 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,â€ Gono wrote to Mugabe.
â€œIt 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.â€
Gono advised Mugabe the central bank was ready to drop exchange control-related and externalisation charges against Mawere. He said allegations that Mawereâ€™s companies were indebted to the state were handled badly as it â€œviolated the law of contractsâ€ 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 â€œminimum procedures of notifying shareholders, creditors, debtors and other related partiesâ€ and there were no â€œjudicial hearingsâ€ to facilitate the process.
He said Gwaradzimbaâ€™s pursuit of â€œculpabilityâ€ on Mawereâ€™s part and attempts to bankrupt him were â€œself-servingâ€. 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.
â€œGwaradzimba, 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,â€ Gono said. â€œThe administratorâ€™s activities also seem to have entrenched interests of needlessly permanently dispossessing Mawere of all his assets.â€
Gono said Gwaradzimba had a conflict of interest in SMM as a former auditor of the company. Â
However, Gwaradzimba hit back at Gono, saying his remuneration as administrator was a â€œcontractual matter that was transparently and lawfully determinedâ€.
â€œThe governor was the prime mover and instigator of the SMM reconstruction process, yet he embraces Mawereâ€™s allegations and advances them against the original case,â€ Gwaradzimba said. â€œIt boggles the mind how the chief complainant in this matter can turn around to become the chief defenderâ€¦it is too late for the governor to change course.â€
Gwaradzimba also said some of Gonoâ€™s arguments were misleading â€œfalse claimsâ€ and were â€œnaÃ¯ve and mischievousâ€. He insisted Mawere must not get back his companies because he has â€œlost 100% of cases in Zimbabwe and South Africaâ€. (See pages 4 and 5 of the print).
BY DUMISANI MULEYA