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Chamisa's MDC claims Fidelity 'parcelled out' to Tagwirei

by Staff reporter
03 Aug 2021 at 13:45hrs | Views
The MDC Alliance is mulling a legal challenge to the disposal of the government's majority stake in Fidelity Printers and Refiners (FPR), which the party says has been "parcelled out" to controversial businessman Kudakwashe Tagwirei.

Finance minister Mthuli Ncube said last Thursday that 10 companies have agreed to pay US$49 million to take 60 percent of the country's sole gold refiner and exporter, currently owned by the central bank.

Ncube did not name the 10 companies but the central bank has previously said firms would take shares based on the average quantity of gold delivered to FPR over the previous three years, as part of an unbundling exercise to separate the gold refining and printing units.

Among the country's biggest gold producers are Kuvimba Mining House, which the government unveiled last year and owns several mines, Caledonia Mining and locally-listed RioZim.

Kuvimba, a company built on mining assets owned by Tagwirei but which purportedly is majority owned by the government, is expected to control a sizeable stake in FPR.

The MDC Alliance claims the government is stripping state assets and handing them to Tagwirei – and is weighing legal challenges.

"The disposal of state gold mines like the disposal of Fidelity is illegal and unconstitutional," former finance minister and MDC Alliance vice president Tendai Biti said. "Only parliament has authority to approve and sanction any disposal of state assets held in entities created by parliament itself. At a time when there is a commodity boom, it is foolish and naked corruption to dispose of any commodities let alone a refinery."

Charging that the sale of FPR was "an act of treason and sabotage," Biti added: "It is common cause that that the refinery has been parcelled out to interests controlled by Kuda Tagwirei and his associates in high offices."

Under a plan announced by the central bank in January, the government would retain a 40 percent stake in FPR's gold refining arm, large scale miners 50 percent, small scale producers seven percent while three percent would go to gold buying agents.

The lack of transparency by the government over who has taken the 60 percent stake will only add to the public's apprehension over what the MDC Alliance claims is part of ongoing "state capture" by Tagwirei, a politically-connected and wealthy businessman who has made a fortune from state contracts through his company, Sakunda Holdings.

"It is plunder and greed of such depth that Cecil Rhodes and the rest of his Pioneer Column are turning green with envy," Biti charged.

"By the time this regime is through with Zimbabwe, there will be nothing left to plunder. They have asset-stripped state shares in banks, mines, land, pipelines, parastatals, hospitals, roads, communal lands, mineral deposits, sacred shrines and even grave yards. It's primitive accumulation on steroids."

Zimbabwe's January-June gold output was 9.95 tonnes and it was projected to reach 32 tonnes by the end of December, after tumbling by nearly a third last year.

FPR, which started operations in 1988, has an installed capacity to refine 50 tonnes of gold annually.

Kuvimba, now on course to be Zimbabwe's biggest mining company, has among its assets mines that the government previously sold to Tagwirei's companies in their various guises including Sotic and Landela.

The government says it owns 65 percent of the company, the stake split between the sovereign wealth fund, the National Venture Capital Fund, the Insurance and Pensions Commission, the War Veterans Fund and the National Youth Fund.

The other 35 percent is owned by locally-registered company, Ziwa Investments, which is in turn owned by a Mauritius-registered investment fund called Quorus which are both linked to Tagwirei.

Why is Kuvimba so controversial?

In December last year, President Emmerson Mnangagwa toured Shamva Mine, a gold mine recently sold by Mzi Khumalo's Metallon Corporation.

David Brown, who was CEO of Kuvimba then but recently quit, handed over share certificates to finance minister Ncube, and it was announced that the government owned 65 percent of Kuvimba.

When Shamva was sold by Khumalo, the buyer was announced as Sotic International, a Mauritius-based company backed by Almas Global Opportunity Fund, a firm registered in the Cayman Islands.

In 2019, Sotic bought 74.73 percent of Bindura Nickel Corporation (BNC), the country's sole nickel miner, as well as Freda Rebecca gold mine, from Asa Resources.

Soon after, BNC announced in a Zimbabwe Stock Exchange filing that Sotic would place the 74.74 percent BNC shares in the hands of a local company, Kuvimba.

Brown is a former CEO of Sotic.

In June last year, the ministry of finance announced that Landela Mining was the winning bidder for "ZMDC gold assets and Sandawana Mine".

These ZMDC mines include Jena, Golden Kopje, Elvington and Sandawana. In total, currently, these gold mines are yielding around 300kg of gold per month.

Curiously, all these mines the government said it sold to Tagwirei-linked companies are now part of Kuvimba, which the government says it majority owns.

In October 2019, Great Dyke Investments, which is developing what would be Zimbabwe's largest platinum mine near Darwendale, announced Landela Mining as its local 50 percent partner. In December, GDI sold a 4.4 percent stake to Fossil Mining, led by GDI board member Owen Chimuka, in order to raise US$30 million to develop the mine.

That left Russian company Vi Holding, run by Vitaliy Machitski, and Landela, each with a 47.8 percent stake.

Just like all the other assets previously said to have been bought by either Landela or Sotic, the GDI stake is now being listed by government officials as part of Kuvimba's portfolio of assets.

The government has desperately tried to put distance between Kuvimba and Tagwirei, who is on United States and British sanctions.

"Tagwirei is not involved at all; we did our due diligence," according to finance minister Ncube. "All the entities in the 65 percent are state-owned."

The links with Tagwirei could complicate international financial transactions for Kuvimba, which runs the risk of having payments held-up or frozen by the United States.

(Additional reporting Reuters and NewzWire)

Source - zimlive