Mphoko's dodgy suspicious $350 million loan deal blocked by Mugabe

President Robert Mugabe blocked a suspicious $350 million loan deal engineered by Vice-President Phelekezela Mphoko.

The loan deal was between the Zimbabwe Electricity Supply Authority (Zesa) and Botswana's Capital Management Africa (CMA) where his son is a shareholder, the Zimbabwe Independent reported.

Zesa senior managers told the publication Mphoko, using his son Siqokoqela's links with CMA, wanted the power company to access a US$350 million loan at a usurious 20% per annum interest rate.

Siqokoqela worked as the head of business development at CMA from January 2008 to August 2013, starting when his father was still Zimbabwe's ambassador to Botswana.

He holds a 5% stake at the financial services company.

Questions are still been raised as to whether Mphoko abused his position as ambassador in Botswana moonlighting to cut deals for himself and his family as he emerged as a partner in that country's biggest supermarket chain Choppies.

As part of its expansion drive, Choppies moved into Zimbabwe in 2013 where most of its stores were acquired from the Spar network. In 2014 Choppies opened a distribution centre in Zimbabwe.

Siqokoqela's duties included, among many others, "establishing investment opportunities for our group in the form of development projects, infrastructural projects, and finance financial institutions such as banks".

"CMA had Pula 2,6 billion assets under its management and it was my job to find good investments for our group. I became a 5% shareholder of the company. CMA was the number one leading asset management company in Botswana and the only company that had the skills and expertise to manage annuity portfolios in the whole of Botswana," Siqokoqela states on his account.

Zesa is seeking US$350 million in order to secure a US$1,2 billion loan facility offered by China Exim Bank to refurbish Hwange Thermal Power Station.

The power utility is in a serious financial crisis as it is owed close to US$1 billion. It is also struggling due to mismanagement and corruption.

Official sources said Mphoko tried to help secure the loan facility apparently driven by his son's interest and thus self-interest. However, government officials said Mugabe rejected deal, saying it was self-seeking.

He reportedly grilled Mphoko over it on Monday last week.

"Mugabe rejected the loan deal and even questioned Mphoko over it during their Monday briefings last week. He warned him not to be involved in Zesa affairs, effectively blocking the arrangement," a senior government official said.

The government official said Zesa two months ago secured cabinet authority to send four people to Botswana to negotiate the deal. "Four people travelled to Botswana from April 11 to April 15 to meet CMA officials for discussions," the official said.

The source also said the repayment of the loan was supposed to be done through Siqokoqela's offshore Mauritius account, which raised suspicions about the whole deal.

Zesa group chief executive officer Josh Chifamba, however, denied this, saying his company did not hold loan negotiations with CMA.

"I am in Gaborone right now," he said yesterday. "No negotiations for a loan have been held with CMA, but instead talks for possible power exports to Botswana."

Upon being pressed to explain the involvement of CMA, Chifamba said: "They are facilitating for Botswana Power Company. We obtained cabinet authority to send the (Zesa) team to negotiate for power exports."

However, an Energy ministry official said the process raised questions.

"Government does not send negotiators to where they want to supply something, electricity in this case, but instead the Botswana Power Company would have sent a delegation here if that was the case," the official said. "The real matter here is a loan arrangement, not power exports."