Old Mutual defends Zimbabwe diamonds investments

OLD Mutual prides itself on being a paragon of good corporate governance and business ethics. Now the insurer is being haunted by its continued investment in two Zimbabwean companies that are at the centre of a crusade by an opposition politician who wants it to disinvest from them.
One of these companies is Zimbabwe Newspapers (Zimpapers), a publishing group that used to support the colonial government, but is now majority owned by the government through a trust established through seed money from the Nigerian government.
Roy Bennett, the exiled secretary- general of the main Movement for Democratic Change (MDC)-T party, is accusing some titles owned by Zimpapers of promoting hate speech against opposition parties.
The insurer - one of the largest investors in the country - is also facing an ethical and business dilemma over whether it should remain invested in a diamond mine in eastern Zimbabwe.
The mine, in which it has a minor stake of less than 2%, has split world opinion on whether Zimbabwe should be allowed to trade in the precious mineral.
This is because of alleged human rights abuses of villagers around the mine and reports ' denied by the Zimbabwe government ' that some of the proceeds from diamond sales cannot be accounted for.
Insiders at Old Mutual say its executives are squirming under the intensifying public glare of the crusade by Mr Bennett, who says if proper due diligence had been done on Mbada Diamonds, the insurer would have "never spent a cent" of policyholders' money on it.
"You need to delegitimise that investment," Mr Bennett says from his base in London, which is also the global headquarters of Old Mutual.
"It is extremely crucial because Old Mutual is a respected company and wherever it is seen to be investing it props up the legitimacy of those companies," says Mr Bennett. "In the interests of good corporate governance, it should carry out due diligence on these investments and do the right thing and cut its losses and get out of it."
The Institute for Accountability in Southern Africa supports Mr Bennett's views. Its director, Paul Hoffman, says that Old Mutual should always focus on ethical investments.
"Tenets of corporate accountability dictate that Old Mutual disinvest from any crooked or improper ventures in which they may be involved, whether inadvertently or otherwise," he says.
Old Mutual says its investments in Zimbabwe, in particular in Mbada Diamonds, are above board and ultimately benefit shareholders and policyholders.
The group says it got involved in the diamond venture long after any reported wrongdoing in the mining area.
"As a result, Old Mutual is most certainly not associated with alleged activities which contravened the human rights of citizens."
But Mr Bennett says the company is conveniently sidestepping the issue. "I have nothing personal against Old Mutual. (But) I have a problem when reputable firms are getting involved in dodgy investments, propping up the investment and other people buy shares, meanwhile they don't know the true story behind these diamonds," he says.
"If the diamond claims were obtained completely transparently and cleanly and the Kimberley Process was fully operational, as it should be, and there were no questions about the diamond sales, what is there to say than endorse it and shout from the highest parapets of what a good investment it is. But that is not the case," he says.
Old Mutual says it is engaging with Mr Bennett and the MDC in Zimbabwe in order to get a clearer understanding of their views on the matter.
But Mr Bennett says so far he has spoken only once to representatives of the group, and is still waiting for them to contact him. He insists that he will not let up on the pressure, and wants to involve international celebrities to highlight his case.
MDC-T spokesman Nelson Chamisa, who is also a government minister in Zimbabwe, says Mr Bennett is on his own in his crusade against Old Mutual.
Mr Bennett, however, says he is not worried, pointing out that Mr Chamisa knows the party's position on the issue. "I can't understand where (Mr) Chamisa is coming from, maybe because he is in government, but as a party we had a strong view against the diamond project," he says.