HomeBusiness DigestRioZim saga takes new twist

RioZim saga takes new twist

THE ONGOING dispute between Tourism minister Walter Mzembi and RioZim’s Renco Mine has taken a new twist amid indications the matter is more than just a case of alleged unlawful entry and occupation of the mine’s premises by the government official and his associates.

Report by Taurai Mangudhla

A High Court ruling, which Mzembi is appealing against in the Supreme Court, ordered him and his colleagues Chivi South MP Irvine Dzingirai and special assistant Obediah Mazombwe off Renco Mine premises.

Information gathered by businessdigest indicates top Zanu PF officials have written to Vice- President Joice Mujuru seeking an extensive probe on RioZim’s ownership and control soon after the company had made a public statement alleging Mzembi had invaded its Renco Mine, but Mujuru did not take any action.

Allegations against Mzembi came two weeks after the Masvingo South legislator is said to have been summoned by President Robert Mugabe on the ongoing labour disputes, which had seen workers going for years with no salary increment and months without full pay.

Mzembi is believed to have sought to instigate a probe by Mugabe on whether or not RioZim’s majority shareholder GEM Raintree Investments Limited (Gril) was indigenous and had really paid the US$12 million for its 24% stake in RioZim, stepping on the toes of some political heavyweights who are said to be backing RioZim at all cost.

Details of the February 4, 2013 letter to Mujuru by the Zanu PF officials indicate RioZim had duped government on its indigenisation compliance plan and was using the alleged invasion by Mzembi as a smokescreen.

According to the letter, gleened by businessdigest, Gril is run by Nigel Earl, who is fronted by Redan MD Tafadzwa Chikumbu and KW Blasting fronted by current RioZim CEO Ashton Ndlovu.

Early last month, Indigenisation minister Saviour Kasukuwere also raised concern that Gril had not fulfilled the indigenisation requirements after investing into the struggling local miner without an indigenous partner, contrary to a widely held view that they had partnered Zimbabwean company, Raintree Mining.

Gril is a 100% subsidiary of The GEM group, which is owned by foreigners and chaired by Harpal Randhawa. The investment company acquired a 24,97% shareholding in RioZim after its US$11,6 million rights issue.

A circular said GEM was in partnership with a Zimbabwean company Raintree.

However, the letter to Mujuru alleges there is no evidence of funding to improve the company’s liquidity position, making it clear it was an internal transaction meant to cover each other’s backs and keep assets with no regard to the economy.

The officials allege RioZim is “a company that bought itself” and planned to use Renco Mine’s stocks and production to pay for the rights issue at the expense of labour concerns which are at the centre of the dispute.

“The supposed investor, Gem, has not put money and banks have accepted terms because they own RioZim. (Elisha) Mushayakarara has been made chairman to protect the ZB Bank loan and protect the company. It is alleged that Kingdom Bank agreed to the terms on the backdrop of getting an investor from Mauritius (and) they are cooperating now,” reads part of the letter.

The shareholder’s operational plan, according to the letter, was to use Renco Mine’s gold piles and to sell the mine to a South African company only referred to as DRD.

Recent Posts

Stories you will enjoy

Recommended reading