(MISA/IFEX) – Zimbabwe’s leading independent daily newspaper “The Daily News” faces immediate closure as the state run Zimbabwe Investment Center (Z.I.C.) moots allegations of fraudulent activities at the Associated Newspapers Company (ANZ), and the holding company that owns the daily newspaper. In a 2 November 2001 letter, Director of Z.I.C. Richard Mbaiwa wrote to ANZ […]
(MISA/IFEX) – Zimbabwe’s leading independent daily newspaper “The Daily News” faces
immediate closure as the state run Zimbabwe Investment Center (Z.I.C.) moots allegations of fraudulent activities at the Associated Newspapers Company (ANZ), and the holding company that owns the daily newspaper.
In a 2 November 2001 letter, Director of Z.I.C. Richard Mbaiwa wrote to ANZ lawyers, Stumble and Rowe, stating that the investment licence had been cancelled. “Clearly there are a number of criminal violations that we need to refer to appropriate authorities for action. Please advise your clients to surrender the original certificate to our offices by no later than the close of business on Monday November 5,” said Mbaiwa.
The Z.I.C. claims that ANZ falsified information when they sought a licence from the centre. The Z.I.C. says that the publishing group violated the Zimbabwe Investment Act and exchange control regulations by selling shares to Renaissance Asset Management early this year without authorisation from the Z.I.C. The Z.I.C. declared the Renaissance investment null and void.
“As you are aware, under section 30 (2) of the Zimbabwe Investment Centre Act, every person shall without delay inform the centre of any alteration from the information or particulars
furnished by him in applying for approval of a project,” wrote Mbaiwa. “Any change to the shareholding structure of a project must be approved by the Exchange Control Department of the Reserve Bank of Zimbabwe as indicated in my letter of 10 May 2001,” Mbaiwa added.
Editor-in-chief of “The Daily News” Geoff Nyarota has said, however, that the Z.I.C. only deals with foreign investors and has no business with where Zimbabweans (such as Renaissance) make investments. The Z.I.C. also claims that a number of criminal violations through the falsification of information were committed during ANZ’s formation. The centre alleges that the Motley Company, partner shareholders in ANZ, is not a registered company. Nyarota and Wilf Mbanga owned Motley.
However, the Z.I.C. argues that before any registration of a shareholding company is approved, the documentation of all partners must be made available. MISA-Zimbabwe understands that there is no way the ANZ could have been registered without the Z.I.C. having been satisfied that such a company (Motley) does exist. Z.I.C. contradicts itself in a 6 November story that appeared in the government controlled “The Herald”, where it is quoted as saying that without the shareholders’ particulars the certificate would not have been issued, as section 27 of the Z.I.C. Act requires the certificate to be issued in the prescribed form. The Z.I.C. did not explain why it issued the certificate without satisfying itself that Motley was a registered company. “Section 32 (1) (a) of the Act empowers Z.I.C. to suspend or cancel a certificate obtained on the basis of fraud or negligent representation or any false or misleading statements.”
The Z.I.C. also alleges that ANZ’s application stated that the publishing company would be involved in the production of weekly newspapers in Chitungwiza, Gweru and Bulawayo, subsequently expanding to other areas. However, the Z.I.C. claims that the ANZ is a Harare-based company that is producing a daily newspaper in violation of the approval. MISA-Zimbabwe takes note of the fact that the Z.I.C. is not taking into account that “expanding to other areas” does not exclude Harare and that a company has the right to have its headquarters where it sees fit in terms of implementing its business strategy.
The Z.I.C. alleges that ANZ said that only Z$40 million (approx. US$721,370) would be invested in the project, yet over Z$137 million (approx. US$2,471,694) was later invested. The Z.I.C. failed again to consider the fact that the ANZ investment was determined not by the budgeted Z$40 million in a rigid sense, but by ANZ’s business demands. In other words, the Z.I.C. fails to be cognizant of the devaluation of the Zimbabwe dollar and indeed the escalation of inputs at the time the publishing house was launched. The government-controlled Z.I.C. also claims that it was not informed when the foreign shareholding of ANZ shifted to 60 per cent Zimbabwean share equity and 40 per cent Africa Media Investment Zimbabwe (AMIZ) shareholding. AMIZ is a British media company that is a shareholding partner in ANZ.
The Z.I.C. claims that its cancellation of the licence comes in the wake of complaints lodged with it by Diamond Insurance Company, a 2 per cent minority shareholder in ANZ. Diamond was against the January investment by Renaissance. The investment was made after the bombing of “The Daily News” printing press (see IFEX alerts of 22, 16, 13, 6 and 1 February, 31, 30 and 29 January 2001 and others).
Diamond took the matter to the High Court to have the investment declared null and void. Justice Ben Hlatshwayo dismissed the Diamond case on the grounds that he had been satisfied that the increase in the shareholding of Zimbabweans in ANZ to a majority 60 per cent was something desirable. “If anything, such a move must be lauded not ruled,” said Justice Hlatshwayo.
Diamond not only wanted to access all ANZ corporate records, but also have the company liquidated. It is the position of MISA-Zimbabwe that the move by Z.I.C., therefore, goes against the judge’s ruling that the investment by Renaissance remains.
On 25 October, the Zimbabwe Republic Police fraud squad picked up four ANZ directors for questioning over the Diamond case. The four are Judith Todd, Burgit Mohamud, Ndaba Mpofu and Stuart Mattison. They were accused of perjuring in sworn affidavits, which they submitted to the High Court against the case brought by Diamond.
The political intrigue in the whole saga has left many believing that the government is determined to use “all tricks in the book to do away with ‘The Daily News’.”. Mutumwa Mawere and John Mkushi, who are the complainants on behalf of Diamond Insurance in the case, are known ruling party functionaries. Furthermore, Mawere is director of many companies with links to the ruling party, Zimbabwe African National Union-Patriotic Front (ZANU-PF). “They tried the bombs and failed and now they have come up with something else,” were the words of Nyarota.
Efforts to get a comment from Mbaiwa proved fruitless as he was said to be away. The Z.I.C. Public Relations office refused to comment, referring all questions to Mbaiwa.
Recommended Action
Send appeals to the Z.I.C. director:
– expressing dissatisfaction with the manner in which he is handling the ANZ (“The Daily News”) matter
– noting that the move by the Z.I.C. is against the High Court judgement by Justice Hlatshwayo
– stating that were “The Daily News” to face closure, this would be a major blow to freedom of expression values espoused in the Zimbabwe constitution and in international conventions that Zimbabwe is signatory to
– reminding the Z.I.C. that it operates under the dictates of the Zimbabwe constitution and that no law can be made by a government agency that can supercede the supreme law of the land
– further reminding the Z.I.C. that its actions damage the very basis of its existence, which is to promote and not discourage investment in Zimbabwe
– stating that ANZ’s closure would throw hundreds of people into the streets and thousands of families into hunger and destitution
Appeals To
Richard Mbaiwa
Director
Zimbabwe Investment Center
109 Rotten Row
Investment House
Harare, Zimbabwe
Tel: +263 4 7599-4 / 757 931-6 / 786 140-6
Fax: +263 4 759 917
cc: Professor Jonathan Moyo
The Minister of state for Information and Publicity
The Office of the President
P.O. Box 7700
Harare, Zimbabwe
Tel: +263 4 707 098 / 707 091/ 703 891-4
Fax: +263 4 706 38
Please copy appeals to the source if possible.
