Is it safe to invest in Zimbabwe?
The Africa Heritage Human Rights Forum (AHHRF) members are very disturbed by the continuous harassment of investors in Zimbabwe.
The Zimbabwean government has continued to blame the Western imposed sanctions for the collapse of the economy, and yet they are destroying the economy themselves by continuing to list as specified privately owned companies up to this day.
The Zimbabwean Government on Friday, 11 September 2009, in terms of an Extraordinary Government Gazette, listed Kingdom Meikles Limited, Tanganda Tea Company (Pvt) Ltd, Thomas Meikles Centre (Pvt) Ltd, and Murlis Investment (Pvt) Ltd, all companies beneficially owned and controlled by Mr Moxon, as specified companies.
Mr Moxon has been involved in a battle for control of Kingdom Meikles Africa Limited (KMAL), a company that was established to consolidate the interests of Mr Moxon and Mr Chanakira under one umbrella, that for a short while was positioned as a black controlled entity in line with the indigenization and black economic empowerment policies of Zimbabwe.
He controlled 43% of the issued share capital of KMAL prior to the decision by the shareholders to demerge the listed entity into two separate groups controlled by the two contesting parties.
Mr Moxon is also a specified person in terms of the Prevention of Corruption Act (Chapter 9:16), on allegations of externalization of foreign currency. The facts of the matter, as we understand it, is that shares held in South African entities were sold for cash but that cash has yet to be remitted to Zimbabwe.
The framing of the externalization allegations which have been bolstered by Mr Chanakira’s complaint to the Zimbabwean authorities is that the proceeds from the asset disposal ought to have been remitted to Zimbabwe.
However, it is not clear how such alleged conduct can attract the attention of State agents when the assets in question are situated in a foreign state where Zimbabwe has no jurisdiction. Be that as it may, an absurd situation has been created in which the state feels it is the injured party.
These alleged externalization charges also bring to mind names like James Makamba, Gilbert Muponda, Chris Kuruneri, Mutumwa Mawere and William Nyemba, among others, who have had their assets placed under “State administration”.
We note with concern the intrusion of the State in corporate battles, and more significantly the use of state power to tilt the bargaining/negotiating power of private parties. The business interests of Mr Moxon are listed on the ZSE and the suspension of trading of the shares in the affected companies is a welcome development.
We applaud the ZSE for taking this decisive step at a time when potential foreign investors are in the country attending a mining investment conference.
Being a forum established to promote and protect human rights, we believe that this case is one such where we must register our continuing concern that Zimbabwe needs a new beginning free from State interference. No national interest is served by abuse of State power in adjudicating on commercial disputes that courts are competent to deal with.
Based on the above, we unreservedly condemn the manner in which the State is being manipulated to undermine the rights of innocent shareholders who evidently can no longer look to the State for any protection. We also call on the Inclusive Government to take seriously the issues of reform if any success is to be registered in the economic recovery agenda.
When other business persons were subjected to similar action starting with the appointment of Dr Gono as Governor of the Reserve Bank of Zimbabwe, we never paused to think about the implications on investment.
The mere fact that the specification order was signed by two Ministers representing change and status quo ante under the framework of an inclusive government should be a cause for concern and serious reflection.
Date: 17 September 2009
Issued by: AHHRF Communication Department
