THE Zanu PF politburo committee investigating the party’s business empire has learnt that its companies, supervised by administration secretary Emmerson Mnangagwa, are a shambles due to gross
Zanu PF’s Report of the Committee on Party Investments, debated by the politburo last week and this Wednesday, reveals the companies are riddled with managerial corruption and incompetence which could have prejudiced the ruling party of billions of dollars and assets.
The report said some of the companies had virtually collapsed, while others had not been audited for years and their financial accounts were a complete mess.
A $650 million Tregers Holdings cheque for dividend declared on February 18 2003 for the year ended December 31 2002 cannot be accounted for.
The report said it was “inconceivable” that Tregers, in which Zanu PF has a 41,96% shareholding, managed to declare a $1,2 billion dividend in four years when its annual turnover was about $150 billion.
There are further queries over the murky investment of $120 million in the portfolio investment company M&S Investments by Zanu PF’s wholly owned investment arm, M&S Syndicate (Pvt) Ltd.
Zanu PF has interests in public and private companies held through M&S Syndicate (Pvt) Ltd. The ruling party has invested in Treger Holdings, Mike Appel, Catercraft, Fibrolite, closed last December, Zidlee, which failed to take over Delta in 1989 and now runs duty-free shops, Southern African Re-Insurance Company (Sare), Zidco Holdings and First Bank, whose Congo investment has now collapsed.
Another company, NamZim, was “closed due to mismanagement and the property was looted by unknown people”, the report says. Zanu PF also had interests in National Blankets, Woolworths and Ottawa Building, which were disposed of in unclear circumstances.
Furthermore, Zanu PF separately owns Jongwe Printing & Publishing Company, as well as Jongwe and Nyadzonya farms. Some companies’ books, for instance those of Catercraft, have not been audited for at least four years and there have been no board meetings for two years.
Mnangagwa, who was interviewed twice by the probe committee because he holds sway over the party’s network of companies, confirmed the chaos in the businesses by admitting most of the companies have no records.
“He (Mnangagwa) said that in most of these arrangements there were no written agreements on the formation of the companies and most of these agreements were done verbally between parties,” the report says.
“Neither was there an agreement for payment of management fees to the Joshi brothers as these companies were operating as one.”
Mnangagwa, who sits on nearly all companies’ boards, supervised M&S Syndicate with Manharlal Chiunilal and Jayant Chiunilal Joshi. The two were linked to Zanu PF by the party’s external secretary Didymus Mutasa and former secretary-general Edgar Tekere in 1979.
However, the Joshi brothers and Dipak Pandya fled the country in April shortly after the probe began. Several Zanu PF officials were quizzed about their escape. Mutasa said the three ran way from being arrested and were in regular contact with him. He said Jayant was believed to be in Dubai, while Manharlal was in Manchester, England.
Some of the Zanu PF investments such as in Bindura Nickel Mine were also unclear. Zanu PF has a 23% equity in Bindura through the Reserve Bank of Zimbabwe. Further inquiries into this investment have been recommended.
There are also fears that companies like Tregers could have externalised funds.
As a result the report recommends that “police/law enforcements agents should go into further investigations in order establish any prejudice in terms of revenue to the party on its investments”.
More investigations were required into the shady M&S $120 million investment, Fibrolite and Catercraft operations, the unaccounted for $650 million Tregers dividend and other dividends declared without audited accounts, as well as Mike Appel’s dividend declarations.
The report says it is surprising Mike Appel declared a $31 million dividend in 2003 but $250 million this year. Sare and shelf companies like M&S Investments, Segmented Investments through which Zanu PF has a 27% interest in First Bank, and Smoothnest Investments, Hutsonville and Amelia Properties, the report says, should also be further investigated.
There were also calls for the committee to find out if Zanu PF has interests in Africa Resources, Banco Nationale of Mozambique, DRC Bank in the Democratic Republic of Congo, and Shabanie and Mashaba Mines.