Govt vows to prosecute black ‘business pawns’

By Michael Chideme recently in MUTOKO

GOVERNMENT has vowed to prosecute local blacks used as "pawns" in defending white interests across the sectors of the economy.

High-ranking Government officials, politicians and indigenous businessmen and farmers across the sectors of the economy are reportedly being used as fronts for the whites. This is seen as a deliberate ploy by some unscrupulous businesspeople to defeat the indigenisation programme.

Addressing traditional leaders, the Zanu-PF leadership in Mutoko, Mutoko Rural District councillors, officials and the business community, Youth Development, Indigenisation and Economic Empowerment Minister Saviour Kasukuwere warned that blacks who front and defend white interests risked losing businesses they fronted.

His remarks come in the wake of massive exploitation of the black granite in Mutoko, which began in 1972.

Since then the Mutoko community has not significantly benefited from the mining that has seen the communal area’s once beautiful mountains, reduced to flat ground.

Some of the black quarry miners are reportedly fronting white interests and are being paid money supposed to benefit the local people.

"Let us stop fronting white interests ahead of our people. Our people must come first. The people of Mutoko cannot allow it anymore. Shape up or ship out," he said to a thunderous applause from the delegates.

He said political independence attained in 1980 would never be complete without economic emancipation.

Minister Kasukuwere said it was disheartening that 30 years after independence 70 percent of the population still lives in abject poverty.

This, he said, was a result of some black people who vigorously resist the empowerment of the local population.

In response to a white quarry operator who had said business was depressed and that the miners were hardly making any profit, Minister Kasukuwere disagreed saying if the business was not viable the operators should quit and leave the local people to benefit.

"Why are you here if our stones are not competitive. Leave our people to benefit. It is time you understood clearly that we want 51 percent control in all business activities," he said.

Government, Minister Kasukuwere said, was looking at the possibility of having locals only to mine the black granite and export it themselves.

Prices of the black granite have been kept a closely guarded secret.

Minister Kasukuwere was in Mutoko to explain to the local leadership the Govern-ment’s Indigenisation and Economic Empo-werment Act.

He told the delegates that section 14B of the Act prescribes Community Share Ownership Schemes or Trusts in businesses, which exploit natural resources.

"10 percent shareholding in qualifying businesses shall be reserved for the community Share Ownership Schemes or Trusts.

"The Community Share Ownership Schemes or Trusts shall have a Deed of Trust registered with the Deeds Office," he said.

The local chief shall chair the Trust with the chairperson of the Rural District Council, as deputy while council chief executive officers would be roped in as secretaries of the Trusts. Funds from the shareholding would be used to maintain and operate schools, provide scholarships, hospitals and clinics.

Minister Kasukuwere said the funds would also go towards community dip tanks, road development and provision of water works and gully reclamation.

Saviour Kasukuwere ‘empowered’ himself

TO many in Zanu PF, Saviour Kasukuwere, the Minister of Youth Development, Indigenisation and Empowerment, is their saviour. Young, rich and successful, Kasukuwere has businesses ranging from oil to transport and banking.
His admirers have nicknamed him Tyson.

But his critics say Kasukuwere is a beneficiary of Zanu PF “gravy train” determined to do whatever it takes to make money for himself and to keep the former ruling party in power despite the economic ramifications.

They claim that he has been building his business empire on the back of political patronage using the Affirmative Action Group (AAG), a black empowerment group where he was once vice-president.

The Indigenisation and Economic Empowerment Act whose regulations Kasukuwere recently pushed through, they claim, is “a looting mechanism” by Zanu PF whose effects would be worse than farm invasions that resulted in the collapse of the economy.

Under the new law, foreign companies have to “cede” 51% of their shareholding to black investors in five years. They have to notify Kasukuwere how they intend to do it within 45 days after the law came into force last Monday.

It is also feared that the new law would scare away potential foreign investors whose money is badly needed to kick-start the economy ruined by over a decade of misrule and corruption.

Sources in Zanu PF last week said the empowerment law came under fire at the party’s politburo meeting last month.

But Kasukuwere, with the support of President Robert Mugabe, somehow managed to push it through.
“The politburo had rejected it but Kasukuwere got Mugabe’s support at the meeting. That is how it survived,” said one source.

Kasukuwere went on to defy Prime Minister Morgan Tsvangirai who had declared the gazetting of the regulations “null and void” because he had not been consulted.

Of concern to most Zimbabweans is that Kasukuwere, who enforces the policy as the minister, is a businessman in his own right, with vast business interests in many sectors of the economy.

It is feared that he might be tempted not only to enrich himself but also his Zanu PF colleagues further as was the case with the farm invasions.

Already accusations have been made that Kasukuwere plans to acquire substantial shareholding in foreign-owned oil companies in the country to boost his existing enterprise.

Some of the foreign-owned oil companies currently operating in the country and could be targeted are Total Zimbabwe (Pvt) Ltd, BP Zimbabwe (Pvt) Ltd, Chevron and Engen (Pvt) Ltd.

The 39-year-old minister owns ComOil (Pvt) Ltd, an oil procurement company, United Touring Company (UTc), Concorpia Farm, and a substantial shareholding in Genesis Bank as well as Interfresh (Pvt) Ltd.

Last year, Kasukuwere was accused of blocking fresh investment in the energy industry and of trying to force BP and Shell to sell its assets to his oil company, ComOil.

There have also been reports that the Act targets Old Mutual, the country’s largest life insurer.
Sources said senior Zanu PF officials were positioning themselves to take over the listed company with the support of some foreigners.

In return, the foreigners would get protection for their other investments in the country.

However, Kasukuwere denies planning a takeover of BP, Old Mutual or any other foreign owned-company. “What people are saying is all nonsensical,” he said. “Honestly, I am trying to promote the interests of the majority of Zimbabweans by empowering them.”

The minister said the allegations were being peddled by his enemies who want to distract him from a national cause.

“I will stand my ground and will not be distracted,” he vowed. “I will stand for the national good; that is promoting the empowerment of indigenous people.”

But ordinary Zimbabweans say the government’s indigenisation programme has never benefited them but a few in Zanu PF and those politically well connected.

The AAG last year attacked Chevron Caltex for allegedly trying to exclude black fuel dealers from getting a stake in the company, a clear indication that hawks are waiting in the wings to snatch a stake in the firm.

AAG, once led by Kasukuwere and business mogul Phillip Chiyangwa among others, is a black empowerment group closely linked to Zanu PF.

Last year Kasukuwere’s ministry irregularly recruited into the civil service Border Gezi graduates as youth officers without seeking approval for the establishment of the posts, prejudicing government of millions of dollars in salaries.

The MDC said the youths were rewarded with jobs for violently supporting Mugabe in the March and June 2008 elections, where over 200 of its activists were killed.

Starting as a low-ranking member of the feared Central Intelligence Organisation in the late 1980s, very little is known about how Kasukuwere built his vast business empire.

Political analyst John Makumbe says it was difficult to establish how Kasukuwere built his business. “His wealth is very difficult to explain,” said Makumbe. “It’s all cloudy and nothing is clear about how he acquired it.”

But Kasukuwere insisted his wealth was legitimately acquired. “When I joined politics I had already built my business empire. I can tell you my other businesses which you did not even mention,” he quipped.
“So I am in politics not to make money but to empower Zimbabweans. I have already made my money.”

BY CAIPHAS CHIMHETE

Zimbabwe to take over foreign firms

First came the government sanctioned invasion of white owned farms. Now foreign companies in Zimbabwe are being taken over.
All firms valued at more than $500,000 will be required over the next five years to sell a controlling 51% stake of their companies to black Zimbabweans.
Among the many internationals in the line of fire are Barclays, British and American Tobacco, BP, Nestle and Unilever.
The government says the aim of the move is to empower the black majority population and right the wrongs of colonialism.
Zimbabwe's Minister for Indigenisation, Saviour Kasukuwere, told me that he is not going "to allow this same cartel to continue plundering this country's wealth and resources at the expense of the majority."
"This is a continuation in the struggle for freedom," he added.
The minister insists that companies will be paid the market rate for the controlling share of their firms. Though he added, rather ominously for some, that this price must not be "exploitative".
Mining firms, however, will not be able to include minerals they have rights to mine as part of their assets.
"Everything that is underground belongs to the people of Zimbabwe and their values must go to the people of Zimbabwe," he said.
Disinvestment fears
Mr Kasukuwere, who has amassed significant business interests here in recent years, did not rule out the possibility of buying assets in foreign firms himself.
Critics fear that many other senior members of President Robert Mugabe's Zanu PF party, along with some military leaders, may do likewise.

Mugabe: "It has always been our aim to have control of our resources"
Ordinary people, they claim, who are supposed to be empowered by this policy, are unlikely to have the money to invest in anything.
Prime Minister Morgan Tsvangirai is among those within the country's unity government who fear that the move could damage economic recovery and dissuade foreign companies from coming to Zimbabwe, a company that is still on its knees economically.
But it is thought foreign firms may be able to retain control of their businesses by agreeing to invest in local infrastructure projects like schools, hospitals and roads.
President Robert Mugabe remains bullish. In an interview with Reuters last week he repeated his intention to press ahead with the policy which was first announced in 2008.
As for foreign firms fleeing in droves because of the move, he said "it has always been our aim to have control of our resources and I don't think the private sectors of the Western countries would, in total, decide to stay away."

India eyes Zim diamonds

Indian firm Surat Rough Diamond Sourcing (SRDSIL) has signed a US$1.2-billion rough diamond supply deal with a group of local entrepreneurs trading as Zimbabwe Diamond Consortium.
RELATED ARTICLES

Marange directors held for fraud in Zim


Under the arrangement, SRDSIL will buy a minimum of US$100-million worth of rough diamonds a month.

SRDSIL is a consortium of 1 500 Indian diamond companies based in Surat, which is considered the commercial capital of the state of Gujarat.

The deal was signed by SRDSIL chairman Ashit Mehta and his ZDC counterpart, Supa Mandiwanzira.

Empowerment Minister Saviour Kasukuwere, Mines Deputy Minister Gift Chimanikire, India's ambassador to Zimbabwe and other government officials attended the event.

A 24-member delegation of Indian diamond industry players, all members of SRDSIL, was in Harare to seal the deal.

In exchange for guaranteed sales of US$1.2-billion a year, the Indians have promised to train 1000 young Zimbabweans in designing, cutting and polishing diamonds.

The youths will be sent to India on conclusion of the first sale worth US$100-million.

The Indian company will also assist Zimbabweans in developing a strong diamond beneficiation industry.

The Indian diamond manufacturing industry accounts for 14 out of every 15 rough diamond stones cut and polished in the world.

Surat is the world centre for diamond beneficiation and is the fastest-growing city in India and second fastest in the globe, thanks to diamonds and textiles.

Experts say Zimbabwe could account for between 25 and 35% of world diamond production. Rio Tinto and a Saudi company were already mining diamonds in Zimbabwe before two other mining companies were licensed to mine alluvial fields in Marange.

Three more companies have recently been licensed and will also start mining soon, according to Mines and Mining Development Minister Obert Mpofu.

SRDSIL chairman Ashitbhai Mehta said that his organisation would lobby for Zimbabwe to be able to trade in diamonds.

Mehta pointed out that Zimbabwe's rich diamond reserves made it a steady source of rough stones. "We are confident that Zimbabwe will be able to sell its diamonds," he said.

At the recently concluded Mines to Market diamond trade conference held in Mumbai, Mpofu attracted considerable attention with his statements, calling the West "hypocritical" for its position against Zimbabwe diamonds in light of continued reports of human rights abuses in the country's diamond fields.

Mpofu called the international embargo against Zimbabwe diamonds a human rights violation and said that his country had complied with all Kimberley Process demands, adding that Zimbabwe had "nothing to fear" from the KP plenum.

The Kimberley Process (KP) approved the sale of a portion of Marange goods in August and September, much of which went to Indian buyers.

However, further sales have been withheld pending a KP review mission report to be discussed at the organisation's plenary in Jerusalem in November.

A number of KP members, in particular the US, Australia and Canada, along with the civil society component of the KP, remain opposed to sales of Marange diamonds because of concerns over human rights at the mines.

Two major European banks recently announced they would not finance any transactions involving gems from the Southern African country.

ABN Amro and the Antwerp Diamond Bank (ADB) said "reputational issues" would prevent them from funding any of their clients involved in diamond deals with Zimbabwe.

Chairman of the ADB executive committee Pierre de Bosscher said at the Mines to Market conference that the ban on Zimbabwe transactions would remain until the country is no longer blacklisted.

Old Mutual to sell Zim unit

OLD Mutual will sell 51 percent of its Zimbabwe unit to local investors, to meet rules on black ownership in the southern African nation, state media said on Friday.

Indigenisation and Empowerment Minister Savior Kasukuwere told the state-owned Herald newspaper that Old Mutual Zimbabwe had submitted proposals to sell the stake over the next five years.

The company will sell 27 percent of its shares to its own employees, 17 percent to local pension funds and 7 percent to an empowerment trust, the newspaper said.

"We are quite happy with the Old Mutual plan on how they intend to achieve indigenisation," Kasukuwere told the newspaper.

Old Mutual Zimbabwe, one of Zimbabwe's largest listed firms, declined to say what kind of proposal it had made to the government.

"We have not received any formal response to our proposals," Luke Ngwerume, the managing director of the local unit, said in an e-mailed response to Reuters questions.

"Naturally our proposals would seek to protect the interests of our various stakeholders including the shareholders, staffers and our clients."

Under empowerment rules published this year, foreign-owned firms, including banks and mines, are required to submit plans to sell 51 percent of their shares to locals within five years.

Some of the foreign-owned companies that will be affected by the law include the world's top two platinum producers, Anglo Platinum and Impala Platinum, and Rio Tinto, which operates a diamond mine in Zimbabwe.

Analysts have warned the empowerment drive pursued by President Robert Mugabe's ZANU-PF party would hurt investment in an economy recovering from a decade of decline.

Zimbabwe to unveil local ownership rules this month

JOHANNESBURG (Reuters) - Zimbabwe will publish guidelines this month on local ownership of various types of companies, ending months of uncertainty that has weighed on the stock market, a government minister said on Thursday.

The southern African nation introduced a law early this year saying 51 percent of firms worth over $500,000 should be owned by black Zimbabweans but accepted that most sectors, especially the capital-intensive mining industry, will take time to get there.

Fourteen committees set up to determine minimum initial local ownership thresholds for various sectors had now finished their work, Saviour Kasukuwere, Minister of Youth Development, Indigenisation and Empowerment said.

"We will review them and publish them before the end of the month," he told Reuters on the sidelines of an investment conference in South Africa's commercial capital.

"We are moving. We need to bring about certainty. We can't keep people hanging there."

This year, Zimbabwe's stock market has failed to build on the strong gains it posted immediately after the government scrapped the worthless Zimbabwean dollar in favour of U.S. dollars in February 2009.

The lacklustre performance -- in contrast to other frontier African equity markets -- has been widely blamed on concerns the indigenisation act was an attempt by cronies of President Robert Mugabe to get their hands on foreign-owned assets.

The uncertainty has also deterred the billions of dollars of foreign investment required to rebuild the economy after a decade of disastrous mismanagement under Mugabe's ZANU-PF administration.

Mugabe told Reuters in an interview in September that he would press ahead with plans to transfer control of foreign firms -- including mines and banks -- to local blacks.

Kasukuwere sought to allay those external fears, saying the bill was simply addressing the unresolved economic imbalances left by decades of white minority rule, and would ultimately create a stable and fair economy and society.

"This is not about nationalisation or expropriation of businesses. This act is to bring our people on board the economy," he said.

"We accept foreign direct investment is critical in getting our economy to work. But it is necessary to balance foreign interests and the aspirations of our people."

Meet Minister Hon Saviour Kasukuwere

Savior Kasukuwere is a member of the Pan-African Parliament, beginning in 2004. He is also a Zimbabwean Minister of Economic Empowerment.TO many in Zanu PF, Saviour Kasukuwere, the Minister of Youth Development, Indigenisation and Empowerment, is their saviour. Young, rich and successful, Kasukuwere has businesses ranging from oil to transport and banking.

His admirers have nicknamed him Tyson.

But his critics say Kasukuwere is a beneficiary of Zanu PF "gravy train" determined to do whatever it takes to make money for himself and to keep the former ruling party in power despite the economic ramifications.

They claim that he has been building his business empire on the back of political patronage using the Affirmative Action Group (AAG), a black empowerment group where he was once vice-president.

The Indigenisation and Economic Empowerment Act whose regulations Kasukuwere recently pushed through, they claim, is "a looting mechanism" by Zanu PF whose effects would be worse than farm invasions that resulted in the collapse of the economy.

Under the new law, foreign companies have to "cede" 51% of their shareholding to black investors in five years. They have to notify Kasukuwere how they intend to do it within 45 days after the law came into force last Monday.

It is also feared that the new law would scare away potential foreign investors whose money is badly needed to kick-start the economy ruined by over a decade of misrule and corruption.

Sources in Zanu PF last week said the empowerment law came under fire at the party's politburo meeting last month.

But Kasukuwere, with the support of President Robert Mugabe, somehow managed to push it through.

"The politburo had rejected it but Kasukuwere got Mugabe's support at the meeting. That is how it survived," said one source.

Kasukuwere went on to defy Prime Minister Morgan Tsvangirai who had declared the gazetting of the regulations "null and void" because he had not been consulted.

Of concern to most Zimbabweans is that Kasukuwere, who enforces the policy as the minister, is a businessman in his own right, with vast business interests in many sectors of the economy.

It is feared that he might be tempted not only to enrich himself but also his Zanu PF colleagues further as was the case with the farm invasions.

Already accusations have been made that Kasukuwere plans to acquire substantial shareholding in foreign-owned oil companies in the country to boost his existing enterprise.

Some of the foreign-owned oil companies currently operating in the country and could be targeted are Total Zimbabwe (Pvt) Ltd, BP Zimbabwe (Pvt) Ltd, Chevron and Engen (Pvt) Ltd.

The 39-year-old minister owns ComOil (Pvt) Ltd, an oil procurement company, United Touring Company (UTc), Concorpia Farm, and a substantial shareholding in Genesis Bank as well as Interfresh (Pvt) Ltd.

Last year, Kasukuwere was accused of blocking fresh investment in the energy industry and of trying to force BP and Shell to sell its assets to his oil company, ComOil.

There have also been reports that the Act targets Old Mutual, the country's largest life insurer.

Sources said senior Zanu PF officials were positioning themselves to take over the listed company with the support of some foreigners.

In return, the foreigners would get protection for their other investments in the country.

However, Kasukuwere denies planning a takeover of BP, Old Mutual or any other foreign owned-company. "What people are saying is all nonsensical," he said. "Honestly, I am trying to promote the interests of the majority of Zimbabweans by empowering them."

The minister said the allegations were being peddled by his enemies who want to distract him from a national cause.

"I will stand my ground and will not be distracted," he vowed. "I will stand for the national good; that is promoting the empowerment of indigenous people."

But ordinary Zimbabweans say the government's indigenisation programme has never benefited them but a few in Zanu PF and those politically well connected.

The AAG last year attacked Chevron Caltex for allegedly trying to exclude black fuel dealers from getting a stake in the company, a clear indication that hawks are waiting in the wings to snatch a stake in the firm.

AAG, once led by Kasukuwere and business mogul Phillip Chiyangwa among others, is a black empowerment group closely linked to Zanu PF.

Last year Kasukuwere's ministry irregularly recruited into the civil service Border Gezi graduates as youth officers without seeking approval for the establishment of the posts, prejudicing government of millions of dollars in salaries.

The MDC said the youths were rewarded with jobs for violently supporting Mugabe in the March and June 2008 elections, where over 200 of its activists were killed.

Starting as a low-ranking member of the feared Central Intelligence Organisation in the late 1980s, very little is known about how Kasukuwere built his vast business empire.

Political analyst John Makumbe says it was difficult to establish how Kasukuwere built his business. "His wealth is very difficult to explain," said Makumbe. "It's all cloudy and nothing is clear about how he acquired it."

But Kasukuwere insisted his wealth was legitimately acquired. "When I joined politics I had already built my business empire. I can tell you my other businesses which you did not even mention," he quipped.

"So I am in politics not to make money but to empower Zimbabweans. I have already made my money."