Anti-graft body to probe Nieebgate
HARARE – As the Nieebgate scandal intensifies, the Zimbabwe Anti-Corruption Commission (Zacc) says it has opened investigations into what is turning out to be one of the biggest scams in post-independent Zimbabwe.
Zacc spokesperson Goodwills Shana confirmed yesterday that the anti-corruption body was probing the Nieebgate scandal after noting the Daily News’ exclusive exposés on the matter, as well as concerns from stakeholders countrywide.
“When power and wealth converge, these should be handled delicately and any deals conducted must be above board,” Shana told the Daily News yesterday.
Early this month, the Daily News exposed apparent flaws in the $971 million Zimplats deal — touted as the biggest empowerment deal since independence in 1980.
Other indigenisation deals for top-earning companies have also since been questioned, with Zacc also expected to investigate them.
Shana declined to elaborate on how far the investigations had gone thus far.
“We have taken note of that but as far as whether we are investigating, and the progress thereof, we do not normally comment on such issues,” he said.
“That is as far as I can go for now and as and when there are developments that we think the public should be made aware of, we will communicate accordingly.”
The anti-corruption commission is wading into the issue as questions are emerging that some pension funds, who are shareholders in Brainworks Capital, are under probe over how they became part of the private equity firm.
One of the top names among the pension funds involved with Brainworks is Comarton Investments, which has administered Reserve Bank of Zimbabwe (RBZ) pension funds since 1994.
The Daily News has reliably learnt that the RBZ, together with other pension funds, has already instituted its own investigations into areas of potential prejudice or impropriety on the part of their pension administrators, as well as the investment of their funds into a private equity firm — and whether this is in line with permissible avenues prescribed by the Registrar of Insurance and the ministry of Finance.
At issue is the requirement that any transaction worth more than $300 000 must be put to tender. But State Procurement Board chairperson Charles Kuwaza has said that there was no tender process giving Brainworks the greenlight to handle the transactions in which it was entitled to up to two percent commission of the value of every deal.
Brainworks, which says it will pocket only $15 million in fees, says Zimplats, a public-listed company, is responsible for payment of the advisory fees. It also contends that the deal was not subject to the tender laws of Zimbabwe, despite the fact that it was appointed to work on this deal by Nieeb.
An economist who was canvassed for his opinion by the Daily News yesterday questioned this whole arrangement.
“Actually this assertion (that the deal was not subject to tender laws) deepens the saga in that it raises the question of what kind of a relationship existed then between Zimplats and Brainworks if Zimplats is the one paying the advisor to Nieeb and the ministry of Youth.
“Isn’t he who pays the piper supposed to call the tune? If this old adage holds true, then to what extent was Brainworks impartial or working in favour of Nieeb’s or the ministry’s interests and not Zimplats?
Is this normal for deal makers to be paid by their adversaries?” the economist who requested anonymity asked.
A clause in the Brainworks mandate letter reads: “For advisory work on the acquisition of the sovereign assets — a fee of up to 2,0% on the value accruing to Nieef from the acquired sovereign assets is to be paid by the company being indigenised. In the event that the company being indigenised does not agree to paying the fee, Nieef shall pay Brainworks Capital for its services, a time-based fee based on a charge out rate of $500 per hour.”
But Brainworks insists that it did no wrong although it duly signed a mandate letter with Nieeb on June 8, 2012 dealing with the Zimplats deal and six other empowerment deals.
Vice President Joice Mujuru has also since waded into the storm, saying: “Empowerment and indigenisation are not exclusive. We need to hold dear our God-given resources so that they can benefit all of us not a few individuals.”
Prime Minister Morgan Tsvangirai has also demanded a parliamentary investigation into the empowerment scam after the Daily News exposed how the National Indigenisation and Economic Empowerment Board (Nieeb) facilitated deals running close to $2 billion for private equity investment firm Brainworks Capital without going to tender.
Tsvangirai wants Indigenisation minister Saviour Kasukuwere to appear before Parliament to explain how these deals were awarded to Brainworks without consultation with relevant government departments such as the Reserve Bank of Zimbabwe, and the ministries of Finance, Mines and Industry and Commerce.
“As Prime Minister, I am concerned about the possibility of a few individuals benefitting from a programme purportedly meant for the majority of Zimbabweans,” Tsvangirai said.
“I am equally concerned with reports that some relevant government organs were kept in the dark about the full nature of some of these transactions,” he added.
Finance minister Tendai Biti has also confirmed that he was not consulted on the deals.
“If people get into nocturnal deals without consulting the Finance minister or other government arms thinking that they can accrue debt on behalf of Zimbabweans they are joking. We will have to review such deals in future,” Biti told the Daily News last week. – Gift Phiri and Richard Chidza