News / Local
Corrupt US$400m deal morphs into political fix
14 Apr 2023 at 14:46hrs | Views
The controversial deal to get state-run Zimbabwe Consolidated Diamond Corporation (ZCDC) to acquire a 33% shareholding in Great Dyke Investment (GDI) for US$400 million has taken a political turn, with authorities worried about its implications on President Emmerson Mnangagwa's re-election bid.
Under the deal, officials representing GDI, a private company under the free-spending Kuvimba Mining House (KMH) approached ZCDC to splurge US$400 million for the stake.
GDI's Darwendale project was billed as Zimbabwe's biggest platinum mine when it was launched, but faced problems in raising funding while sanctions imposed by the West after Russia invaded Ukraine last year, forced Vi Holdings, a Russian firm, to withdraw from the project.
It ceded its 47,8% stake to the local partners, Kuvimba and Fossil.
The US$400 million would help it fund the development of the US$3 billion project.
The proposal is seen as a brainchild of GDI's chief operating officer, Munashe Shava, who is also ZCDC chairperson.
It immediately attracted brickbats from the Chiadzwa Community Share Ownership Trust (CCSOT), led by Chief Marange, who is vehemently opposed to the deal.
In a string on petitions, the CCSOT cautioned that Shava was being used to transfer public assets to GDI shareholders.
The CCSOT also queried how ZCDC would transfer substantial funding to GDI before fulfilling crucial undertakings to the community, which were made when the trust was launched.
Chiadzwa is one of the ruling Zanu-PF party's strongholds and community leaders have already hinted to Mnangagwa that he stands to lose their vote in elections later this year if the deal goes ahead.
Mnangagwa has already made several trips to the area, canvassing for support.
The Zimbabwe Independent was told that a team involving the Central Intelligence Organisation (CIO)'s counter intelligence and economic research branches was set up to probe the deal.
Sources said the team submitted a report to Mnangagwa this week.
"The ZCDC/GDI deal was escalated to (having a probe team set up) to investigate how it will impact on the President's fortunes at the forthcoming polls," a source told the Independent.
The source said the team also tried to understand how ZCDC chief executive officer (CEO) Mark Mabhudhu was suspended.
"The team of six officers was dispatched to do a thorough investigation into what is going on. Three officers from counter intelligence and an additional three officers from the economic research department were conducting the investigation, which entailed gathering evidence from the Chiadzwa community. The team is in possession of various letters written by the CCSOT," the source added.
Mabhudhu was suspended in February after he was accused of holding up the transaction.
Prior to the suspension, Mabhudhu has raised questions to the ZCDC board over the deal, including the high consultancy fees charged by a local commercial bank.
The Independent was told that as the probe was carried out, the CCSOT pressed hard to meet Mnangagwa.
Its latest petition dated March 20, 2023, seen by this publication, was one of several dispatched to several State agencies demanding that the deal be dropped.
"Pending your investigations into issues being raised by the community, we call for closure of diamond mining operations in Chiadzwa till these matters have been resolved since they are a liability to our community and the nation at large," the letter read.
"We wish to advise Your Excellency that adverse developments associated with the referenced transaction will negatively affect our targeted five million votes in the 2023 harmonised elections.
"Before seeking an audience with Your Excellence, we exhausted steps whose results we are yet to realise and we are afraid it is getting too late."
The letter, signed by its chief executive Hardwork Mukwada and Newman Chiadzwa was referenced: "Request for an Audience With Your Excellency Over Developments Associated With the ZCDC-GDI Share Purchase Transaction".
Mnangagwa, who is seeking a second term in office, is expected to square off against firebrand Citizens Coalition for Change leader Nelson Chamisa.
In several other petitions seen by the Independent, the CCSOT also wrote to parliament, the Zimbabwe Anti-Corruption Commission (Zacc), Kimberley Process and the World Diamond Council campaigning for the deal to be scrapped.
In another letter addressed to Shava on March 5, the CSOT warned the diamond miner that the planned acquisition of the GDI shareholding would anger the electorate, as it demanded the reinstatement of Mabhudhu.
"Through his pro-community approach, Mabhudhu raised the community's allegiance to the legitimate government of the Republic of Zimbabwe. Mid-air, halting Mabhudhu's pro-community approaches through introducing another CEO has adverse effects on the community's perception of the ruling government whose cause had so much been promoted by Mabhudhu more so since the country is on the verge of harmonised national elections," the letter reads.
Zacc spokesperson Thandiwe Mlobane recently told the Independent that the transaction was now subject of an investigation by the anti-graft body.
Under the deal, officials representing GDI, a private company under the free-spending Kuvimba Mining House (KMH) approached ZCDC to splurge US$400 million for the stake.
GDI's Darwendale project was billed as Zimbabwe's biggest platinum mine when it was launched, but faced problems in raising funding while sanctions imposed by the West after Russia invaded Ukraine last year, forced Vi Holdings, a Russian firm, to withdraw from the project.
It ceded its 47,8% stake to the local partners, Kuvimba and Fossil.
The US$400 million would help it fund the development of the US$3 billion project.
The proposal is seen as a brainchild of GDI's chief operating officer, Munashe Shava, who is also ZCDC chairperson.
It immediately attracted brickbats from the Chiadzwa Community Share Ownership Trust (CCSOT), led by Chief Marange, who is vehemently opposed to the deal.
In a string on petitions, the CCSOT cautioned that Shava was being used to transfer public assets to GDI shareholders.
The CCSOT also queried how ZCDC would transfer substantial funding to GDI before fulfilling crucial undertakings to the community, which were made when the trust was launched.
Chiadzwa is one of the ruling Zanu-PF party's strongholds and community leaders have already hinted to Mnangagwa that he stands to lose their vote in elections later this year if the deal goes ahead.
Mnangagwa has already made several trips to the area, canvassing for support.
The Zimbabwe Independent was told that a team involving the Central Intelligence Organisation (CIO)'s counter intelligence and economic research branches was set up to probe the deal.
Sources said the team submitted a report to Mnangagwa this week.
"The ZCDC/GDI deal was escalated to (having a probe team set up) to investigate how it will impact on the President's fortunes at the forthcoming polls," a source told the Independent.
"The team of six officers was dispatched to do a thorough investigation into what is going on. Three officers from counter intelligence and an additional three officers from the economic research department were conducting the investigation, which entailed gathering evidence from the Chiadzwa community. The team is in possession of various letters written by the CCSOT," the source added.
Mabhudhu was suspended in February after he was accused of holding up the transaction.
Prior to the suspension, Mabhudhu has raised questions to the ZCDC board over the deal, including the high consultancy fees charged by a local commercial bank.
The Independent was told that as the probe was carried out, the CCSOT pressed hard to meet Mnangagwa.
Its latest petition dated March 20, 2023, seen by this publication, was one of several dispatched to several State agencies demanding that the deal be dropped.
"Pending your investigations into issues being raised by the community, we call for closure of diamond mining operations in Chiadzwa till these matters have been resolved since they are a liability to our community and the nation at large," the letter read.
"We wish to advise Your Excellency that adverse developments associated with the referenced transaction will negatively affect our targeted five million votes in the 2023 harmonised elections.
"Before seeking an audience with Your Excellence, we exhausted steps whose results we are yet to realise and we are afraid it is getting too late."
The letter, signed by its chief executive Hardwork Mukwada and Newman Chiadzwa was referenced: "Request for an Audience With Your Excellency Over Developments Associated With the ZCDC-GDI Share Purchase Transaction".
Mnangagwa, who is seeking a second term in office, is expected to square off against firebrand Citizens Coalition for Change leader Nelson Chamisa.
In several other petitions seen by the Independent, the CCSOT also wrote to parliament, the Zimbabwe Anti-Corruption Commission (Zacc), Kimberley Process and the World Diamond Council campaigning for the deal to be scrapped.
In another letter addressed to Shava on March 5, the CSOT warned the diamond miner that the planned acquisition of the GDI shareholding would anger the electorate, as it demanded the reinstatement of Mabhudhu.
"Through his pro-community approach, Mabhudhu raised the community's allegiance to the legitimate government of the Republic of Zimbabwe. Mid-air, halting Mabhudhu's pro-community approaches through introducing another CEO has adverse effects on the community's perception of the ruling government whose cause had so much been promoted by Mabhudhu more so since the country is on the verge of harmonised national elections," the letter reads.
Zacc spokesperson Thandiwe Mlobane recently told the Independent that the transaction was now subject of an investigation by the anti-graft body.
Source - the independent
