Transport minister Obert Mpofu distances self from Brainworks, indigenisation deals

Transport minister Obert Mpofu distances self from Brainworks, indigenisation deals

By Kuda Chideme, HARARE, July 30 (The Source) – Zimbabwe’s transport minister Obert Mpofu has distanced himself from indigenisation deals involving private equity and advisory firm Brainworks and said he was also not involved in soliciting pledges towards the $50 million Zimuto/Marange community ownership trust (CSOT), as details on the transactions emerge.

Indigenization transactions have recently come under scrutiny from parliament after it emerged that Brainworks, which was contracted by government through the National Indigenisation and Economic Empowerment Board (NIEEB) had been soliciting for payments from mining firms for advisory services.

Brainworks worked as the government’s consultants in several major but eventually abortive transactions under Zimbabwe’s Indigenization Act — enacted in 2008 — which requires foreign owned companies valued at over $500,000 to cede 51 percent to black locals. By its own admission and that of NIEEB, Brainworks was hired without going to tender, in violation of the law.

Former indigenisation minister, Saviour Kasukuwere, who now heads the local government portfolio, maintained before the parliamentary committee on indigenisation on July 9 that five diamond mining companies in Marange had pledged $50 million to community trusts but were failing to meet their pledges due to lack of finances.

The firms — Marange Resources, Mbada Diamonds, Diamond Mining Company, Anjin and Jinan — denied pledging $10 million each when they appeared before the committee last year, saying they had instead offered seed money of $1,5 million when the CSOT was launched in mid-2012.

Kasukuwere said the decision to ask the miners to each pay $10 million was “a policy decision” reached by government.

Mpofu, who is now minister of transport on Thursday told the committee that his former ministry had no involvement in the transactions.

“We fully subscribed to the policy of indigenisation but the actual operationalisation and implementation has never been under my jurisdiction then and now, it was a preserve of a sister line ministry,” he said.

“If any pledges were made they were made to the ministry that asked for them not us, as a ministry we had not asked for any we had nothing to do with it.”

Asked whether he was given a directive by cabinet to engage the mining firms Mpofu said he did not recollect receiving any such directive, emphasising that he had not interacted with any of the companies to discuss the pledges.

Appearing before the same committee, Mimosa Mine managing director Winston Chitando said Brainworks had requested $1,8 million from the mining firm for ‘advisory services’ in 2013 before revising the figure to $9,4 million in a letter dated  January 15, 2014.

Zimplats chief executive Alex Mhembere told the committee that Brainworks had also billed the company and had written requesting payment.

“We had no direct relationship with Brainworks. They sent us an invoice of $16,4 million but we did not pay them any money and we do not owe them,” he said.