HomeBusiness DigestTread carefully, Dorrestein

Tread carefully, Dorrestein

Letter to Mr Bart Dorrestein, Legacy Hotels and Resorts International (Pty) Limited chairman.

Dear Mr Dorrestein:

I am writing this letter to you in your capacity as the chairman and CEO of the Legacy Hotels and Resorts International (Pty) Limited (“Legacy”), the company that recently came to the rescue of African Sun (Private) Limited (“African Sun”), a company whose Zimbabwean heritage is well-known and established.

As a person I have personally known for a long time, I feel compelled to write this open letter to you because of my business and personal experiences that may be of value to you and your company as you deal with some of the characters involved in the affairs of African Sun.

We have discussed on several occasions about the African condition, problems and prospects to uplift the continent that we all purport to love, and the general questions of the link between economic freedom and justice, equality and prosperity.

You have always wanted to keep a low profile but when you conclude a deal in Zimbabwe with a private company and manage to get Finance minister Patrick Chinamasa, whose role in undermining the rule of law is well-known and established, as one of your business mentors, then one is compelled to pause and reflect on what is going on behind the headlines. The characters you have chosen to align yourself with are not only lethal but lack the understanding of what is required from state actors in order to deliver the promise of a safe and happy life for all.

Your company’s entry in Zimbabwe and, in turn, into the affairs of African Sun has been generally welcomed, especially by the very people who are accused of a myriad of activities that undermine investment and confidence.

When your celebration of a deal, albeit private, attracts the attention of the editor of the state media http://www.herald.co.zw/editorial-comment-business-opportunities-vast-within-africa/, then it must tell you about the true context and content of the proposed business engagement.

The occasion that you participated in Harare last week was to mark the change in the business model of African Sun. You will be aware that African Sun was established in 1968 as a subsidiary of SABMiller’s the then Rhodesian beer and beverage company now trading as Delta Corporation.

The then Zimbabwe Sun was spun out of the Delta Group in part to comply with the aspiration to open the space for indigenous economic actors to enter the mainstream economy. Delta disposed its shareholding to a group of Zimbabwean entrepreneurs in the hope that this would usher a new and irreversible trend towards democratized economic freedom.

The failure of the business model and the subsequent entry of Brainworks as a controlling shareholder goes a long way towards exposing the complexities and viability of humanly engineered empowerment schemes. Shingi Munyeza is no longer at African Sun, yet the true lessons of his leadership have yet to be properly understood and digested.

The controversial role of Brainworks in the abortive indigenisation of certain mining companies confirms that the principals of this company subscribe to the idea of indigenisation which your company’s entry into Zimbabwe seems to undermine.
Your entry into Zimbabwe, if anything, confirms the failure of indigenous persons to take advantage of the promise to build enduring multinational corporations in the hospitality industry.

The dream of President Robert Mugabe to unleash black management talent has been effectively tainted and the fact that you occupy the positions of chairman and CEO confirms that in your company, you are still to be convinced that a diverse board adds value in African enterprise.

After 35 years of an ideology that, on paper, pushes for the corporate hegemony of indigenous persons in the economy, one must accept when the idea has failed to deliver the promise.

As you are aware, Mugabe, the only elephant in the room, has not yet accepted that his idea of the supremacy of blacks in all spheres of Zimbabwean life is not only impractical, but his ardent followers like Chinamasa, who presided over the death of the same idea at African Sun, are unable to convey this bad news to him.

It is easy to blame sanctions for everything that has happened in the life of African Sun, a name that Zimbabwe Sun was changed to in 2008 to reflect a pan-African strategy that was believed to assist in mitigating the Zimbabwean risk, but in reality the choices and decisions made in the post-colonial era have combined to limit and not expand opportunities.
With respect to the Zimbabwean risk, it is often convenient to look at enterprise failure ignoring the extra-enterprise factors that have been at play to make Zimbabwe a difficult market to operate in.

Notwithstanding, it would appear that your company has the appetite for Zimbabwean risk and that our experiences are irrelevant to the task of building a new order in which all investors are treated equally.

Indeed, you were quoted as having said: “Zimbabwe has the potential to become one of the world’s tourist destinations.”
You were also reported to have remarked that months of negotiations with government convinced your group that Zimbabwe was on the road to recovery.

It is the above approach to investment that worries me and perhaps many more. The idea that government actors are relevant in making commercial decisions for your company to enter into a management agreement with a sovereign and independent company as African Sun purports to be and its listing on the Stock Exchange confirms; should be offensive to anyone who correctly understands what any country should do to attract investors.

It is now self-evident that although we have shared many ideas, insights and experiences, you have not taken the time to appreciate the facts and circumstances leading to the financial demise of SMM and related companies and the specific role played by Chinamasa and his crew.

Among his crew, is a man that would be familiar to you, Herbert Nkala, the current chairman of African Sun and a director of many companies, including First Bank Corporation, Turnall, and others.

We have tended to blame Mugabe for his personal role in creating the chaos and confusion leading to lower foreign direct investment inflows, but in reality it is the role of persons like Nkala, Chinamasa and many more who have played active roles in shaping and defining the wrong character and personality of Zimbabwe.

As you celebrate your historic role with your newly found Zimbabwean friends, you must take a moment to ask Nkala about his relationship with First Bank, how it became and what his story is since inception. I have no doubt that he will tell you the truth that he played no financial part in its establishment, but was invited to sit on the board like he has been in the case of African Sun.

He was a director of First Bank — a private bank, and when Chinamasa, encouraged by people like him to use the state to alter relations and position him to pick up the spoils, he saw no danger in the actions and there can be no doubt that he privately boasts of his rise to fame as a consequence of natural justice.

If you have the guts to ask him, how it became possible to be the chairman of FBC and related companies, I have no doubt that he would venture to give you his self-serving spin but facts will always take you to the correct destination.

A country whose purported business leaders lack morals also poses a danger to new friends like you.
Your conclusion that Zimbabwe is on the road to recovery would appear to be anecdotal based presumably on the views gathered from praise-singers like Nkala who, evidently, have perfected the art of singing for their supper without recognising the toxic impact of their consent, actions, silence and acquiescence.

On the surface, it is easy to believe that your new partners are men and women of integrity but I believe it is necessary that before you trust you seek to independently verify. If Chinamasa and Nkala can do what they have done to a black person, what more can they do with impunity to white person like you?

It is my belief that economic freedom and justice can best be won by free men and women through a market system. Clearly, it is self-evident that your deal, whatever its terms, was considered and approved by political actors.

It is also self-evident that the facts and circumstances of your peculiar deal places you on a different and superior pedestal than an ordinary investor who may have more beneficial solutions to the problem facing African Sun. There is no doubt that you have been given assurances that you are a different white man.

In South Africa, your country of birth, the issue of black economic empowerment is on the radar screen yet many South African entities have little to show in the direction of giving life to the idea that sharing can overcome the ills of apartheid.

On the contrary, many unrepentant persons on the question of inclusive growth and prosperity are more acceptable in countries like Zimbabwe that have isolated themselves from the world through the self-serving actions of people like Nkala.

I recall that you attended an investment promotion conference in South Africa where Chinamasa was a keynote speaker and your comments betrayed the direction you had chosen to take and your present deal.

Your deal may make sense and, more importantly, may be timely but Zimbabwe needs more to cure the challenges of injustice, inequality, unemployment and poverty.

Regrettably, you have chosen to align your cause with elements that have and continue to profit from using the state for personal and preferential deals. Zimbabwe badly needs average investors who are clothed with values that inspire progress. It is not accidental that Zimbabwe finds itself where many of its citizens do not want it to be.

You are not the first one to receive temporary preferential treatment by people who are yet to grasp their purpose in the matrix of things.

Surely, you will agree that the practices of apartheid were not sustainable and it was obvious then as it is now that the arc of the long arm of the moral universe always bends towards justice and fairness to allow you to delude yourself that you are assisting Zimbabwe to get to the desired destination.

In conclusion, I would urge you to share the response, if any, from Nkala to the questions raised above. When you get another opportunity to break bread with Chinamasa, please ask him about the decree he caused to be issued termed: “(Presidential Powers Temporary Measures — Reconstruction of State Indebted Insolvent Companies Regulations) 2000.

Please take your time and be gentle with him. It is important that you understand the kind of people you are now calling friends. The decree was subsequently enacted into law and the law exists to create this kind of absurdity.

You may recall that I asked your lawyers to review the law but clearly when greed creeps in, anything is possible. A copy of the Act in question can be found on this link: http://www.veritaszim.net/node/177. — New Zimbabwe
Mawere is a Zimbabwean investor based in South Africa.

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