Mawere Warns UK Companies Over Business Risks In Zimbabwe
In a letter dated December 7, 2011 to British Ambassador in Zimbabwe Deborah Bronnert, Mawere said the Zimbabwean government has seized his empire overlooking the fact that the companies are owned by two UK registered firms, SMMH and THZH. SMMH owns SMM which owns through its division two asbestos mines in Zvishavane and Mashava.
THZH holds the issued share capital of Endurite Properties with interest in banking insurance and financial services sectors.
These assets were seized when government said they were indebted to the state by virtue of owing parastatals money.
“These matters are brought to your attention because of the fact that the companies whose interests and rights are directly affected are registered in the United Kingdom,” Mawere’s lawyers, Kyle Attorneys wrote to Ambassador Bronnert.
“You will note that in the submission to the Speaker that the effect of the Reconstruction legislation is to place companies registered and governed under UK laws under the control of an administrator appointed in terms of the Zimbabwean law and in so doing give the Zimbabwean legislation extra-territorial application.”
The lawyers said the legislation threatens foreign interests in Zimbabwe and the British Embassy is free to circulate the “correspondence to other embassies and interested parties so that they are informed about the risks of doing business in Zimbabwe”.
“If it can happen to two English companies then surely no one is safe,” the lawyers said.
In June a parliamentary portfolio committee recommended a review of the Reconstruction laws used to seize the companies saying such legislation exposes citizens to the risk of losing assets to the state without meaningful judicial oversight.
With interests across virtually all the sectors of the economy, SMM was deemed to be indebted to the State by virtue of owing money to the central bank (Z$30 billion), a Z$252 million debt to the National Social Security Authority (NSSA), Minerals Marketing Corporation of Zimbabwe (Z$396 million), Zimbank (Z$20 billion), Zesa (Z$8,2 billion) and owing the tax collector, Zimbabwe Revenue Authority (Zimra) of Z$49 billion.
“A law that arbitrarily converts claims of state-owned institutions to state obligations governed under the reconstruction laws has to be carefully examined and interrogated by the House,” said a report by the parliamentary portfolio committee on Mines and Energy.