Now Mugabe grabs a share of business
President Mugabe’s government, which precipitated an economic crisis in Zimbabwe by grabbing mostly white owned farms and distributing it to blacks, is now intent on grabbing business as well and distributing to his party’s faithful. A law was passed by government allowing it to take equity in cases where companies owed government or government institutions. In a country where government owns many public utility it means a company may lose equity for outstanding electricity bills (Electricity Company is government owned).
A Zimbabwean business man is fighting the Zimbabwe Government in a London High Court following application of the new legislation to remove him from his company. Mr. Mutumwa Mawere who owns Zimbabwe’s largest asbestos producer SMM Holdings fled to South Africa when the government tried to arrest him for flouting exchange regulations.
This was followed by the government stripping him of the shares he owned in SMM Holdings in Zimbabwe and housing them in a state-owned company AMG Nominees. One of the administrators chosen to administer SMM Holdings on behalf of AMG Nominees was then appointed as a director of SMM Holdings in London.
Mr. Mawere is fighting to have this director removed from the company by the London High Court.
Mr. Mawere believes that property rights are under threat in Zimbabwe and warns South African business man who are investing in the mining industry in Zimbabwe to be careful that they may lose their investment through this legislation.
Already three banks (Trust Bank, Barbican Bank and Royal Bank of Zimbabwe) have been confiscated in a similar manner by the government.
Mawere believes that his dispute with the Government of Zimbabwe is test case to re-establish the rule of law in Zimbabwe. He is challenging the two new laws: the reconstruction of State-indebted Insolvent companies Act and the Resolution of State-indebted Financial Institutions Act.