Home » Industry » Telecel Zimbabwe Row and the U.S $50 Million Con [analysis]

THE story about the ongoing Telecel Zimbabwe ownership saga is yet to be told in full. It is based on the killing that a few individuals, led by James Makamba, will make if the proposed $20 million sale of the 40 per cent Empowerment Corporation shares goes ahead.

Basically, Telecel has been a fraud all along. It was granted a licence by the government without winning the tender which had been floated by the Ministry of Information in the first place.

The home-boy connection between then Minister of Information Joyce Mujuru and James Makamba played a major role. Remember how Mujuru went to the extent of insulting Vice President Joshua Nkomo as a senile old man after he simply insisted on due processes being followed in the issuance of the licence.

At the time James Makamba fully exploited the cosy relationship between Leo Mugabe and his uncle, the President of Zimbabwe, HE Robert Mugabe.

But Leo has long since fallen out with his uncle. The new flavour of the First Family is now Patrick Zhuwao, Leo’s younger brother who has wormed his way in through the First Lady and is busy writing articles promoting her and the President in Zimpapers.

Back to Telecel the company was then owned by the late Rwandan billionaire Miko Rwaitare, considered rightly as the father of modern telecoms in Africa. Miko befriended both Makamba and Strive Masiyiwa in his bid to establish himself in Zimbabwe and other southern African countries.

In the end the two Zimbabweans went their separate ways and Telecel and Econet soon got their licences, albeit in totally different ways – the former with the help of Mujuru and the later with the help of the Supreme Court.

But the story is that Makamba and Co never actually paid for their shares. The 40 per cent shares were parcelled out as sweeteners for the licence – Leo, Magamba eChimurenga, IBWO fronted by Jane Mutasa, IBDO fronted by Chiyangwa, Mujuru’s family through Makamba and many others. All these were “issued” shares for protection and to shore up the licence. Makamba originally owned 80 per cent of the EC shares but is believed to have increased the amount over the years.

Throughout the years, whenever any one of the above needed cash Makamba provided, on the very subtle understanding they were selling their shares to him.

Rwaitare soon made more millions by selling his 60 per cent of all global Telecel operations to the Orascom Group of Egypt. The Egyptian family holding later on-sold Orascom Telecom Holding and all its Telecel assets to Holland-based VimpelCom of Russia.

However, on both occasions not a single cent of the millions of dollars in Capital Gains Tax which was due to Zimbabwe was ever paid. Makamba was doing fine as he sat on the main board of the company.

Throughout, as well, Telecel never paid for its licence to the Zimbabwean Government. So, in effect, it operated illegally, a point well made recently by Supa Mandiwanzira. Fast forward. In comes Brainworks Capital Management with a $20m offer for the 40 per cent held by EC.

The question that most people are asking is why Brainworks are not making an offer for the foreign-owned 60 per cent which VimpelCom is known to have put on sale through Barclays Bank International?

The answer is simple. Here’s how some clever chaps are about to skim $53m off the top. Barclays have told potential buyers that Telecel Zimbabwe is worth $200m. That 40 per cent held by EC is worth $73m. They are therefore seeking $127m for the VimpelCom shares.

Among those that have shown real interest in buying is Isabel dos Santos, one of the only two African women billionaires. The Angolan is into diamonds, cement and telecoms, fronting, it is rumoured, her father, the President of Angola and a number of generals. However, Isabel has told the Russians and Barclays she will venture outside Angola for the first time in telecoms only if she is offered 100 per cent of Telecel Zimbabwe.

The Telecoms Act of Zimbabwe forbids this. Even Col Gaddafi tried to wrestle NetOne at the time he was supplying $1m worth of fuel a day to Zimbabwe but Simba Makoni, then Finance Minister, and President Mugabe himself politely told the Libyans they would neither broke the laws of the country nor change them in exchange of the much-needed fuel.

Now in comes Makamba, roping in Zhuwao. Makamba has reportedly promised the Russians and the Angolans that he can use the special relationship between Angola and Zimbabwe could be exploited to ensure that all 100 per cent was sold to Isabel.

He points to the special relationship between the President and the Chief Executive of EC, Patrick Zhuwao whom he says will help ensure the deal goes through. But they have to make lots of money too from the deal. And so in comes Brainworks with a $20m offer for shares that are actually worth $73m!

Now, it doesn’t take too much application of the grey matter to understand that $53m will grease a lot of palms here. Brainworks are just a conduit. Let them buy the 60 per cent. The Russians are actually prepared to discount the price. But No that will not make a long list of people a lot of money from the skimmed $53m.

The question that’s being asked is whether Jane Mutasa got a whiff of what was happening, hence her rise to challenge the deal. Leo Mugabe knows what’s happening and a few others too.

But does Supa Mandiwanzira know? How come his spirited condemnation of Telecel the other day? Was he simply being foolhardy or principled? Does he understand the forces at play the monies, huge monies involved, the intrigues and the corruption going on.

Sadly, throughout this saga, ZIMRA has been found wanting. It never demanded the more than $20m in CGT from the two previous sales of Telecel. Yet it is determined to tax the second hand clothes sellers at Mupedzanhamo.

A lot of people wait with bated breath to see what will happen next crucially, what Supa will do. Is he really the breath of fresh air that most people thought he would be, or will James Makamba do the numbers on him as well? Joyce Mujuru will be watching with keen interest as well. Her investment will rise or fall by the actions of a few people.

Source : New Zimbabwe