Minister ‘lied’ to scuttle deal

Source: Minister ‘lied’ to scuttle deal | The Standard (Local News)

bY Staff Reporter

Transport minister Joel Biggie Matiza has been accused of deliberately misleading cabinet in a bid to scuttle the US$400 million National Railways of Zimbabwe (NRZ) recapitalisation project.

The Diaspora Infrastructure Development Group (DIDG), which won a 2017 tender to recapitalise the ailing national rail service, made the claims in a withering statement Friday after Matiza was quoted by the state-owned Herald newspaper saying government was forced to cancel the tender after the company failed to provide proof of funds.

DIDG, which led the winning consortium that includes South Africa’s rail service Transnet and a syndicate of banks counting Absa and Nedbank among others, is accusing Matiza of lying to cabinet in a bid to push the project to a proxy.

Company chairman Donovan Chimhandamba told The Standard they had instructed Atherstone and Cook Legal Practitioners to take legal action against Matiza in his personal capacity.

“His actions are unlawful and cannot go unchallenged, we intend to pursue this to the end.

“We are going to take legal action against Matiza in his personal capacity for abuse of government office as we can demonstrate that he employed malicious falsehoods to advance a personal agenda,” Chimhandamba said.

“It is shamefully dishonest for him to claim that we did not provide proof of funding when NRZ has already acknowledged, in writing, that it received the proof of funding and sent the same to Treasury for verification.

“The question is why Matiza is so desperate to scuttle this project that he went to the extent of lying to cabinet and the people of Zimbabwe?”

NRZ is reportedly yet to formally communicate with DIDG on the cancellation, amid claims executives are divided over the issue with some accusing Matiza of suppressing NRZ board resolutions and recommendations in his presentation to cabinet.

“The situation is quite sensitive because on one hand you have the minister saying DIDG has not provided the proof of funds and requiring us to communicate the cancellation to the consortium, while on the other hand we had already written to the consortium acknowledging the proof of funds, which has since gone to Treasury for verification,” a source inside the NRZ said, requesting anonymity for fear of victimisation.

“Nobody wants to put their signature to the letter because you expose yourself professionally and legally if you generate two contradictory letters, it’s an administrative stalemate.”

The NRZ deal has exposed fissures in government with the Herald Friday uncharacteristically allowing DIDG a right to respond carte blanche directly to Matiza’s claim.

“Proof of funding was provided timeously. The Herald has been provided with the proof of funds that includes funds from Absa, Nedbank and other banks, with Afreximbank as the lead arranger.

“This a matter of fact, not speculation … No cancellation has been communicated by the authorised legal body (NRZ) dealing with this matter.

“It is unprofessional to purport to cancel commercial agreements through newspapers,” the company said in a nearly 400-word statement..

A source said the publication of the statement was done under the threat of legal action.

“They received the proof of funding and a letter threatening legal action if the paper did not retract the article.

“The paper could not retract the article because the statements attacking DIDG were issued by a competent authority, so the only option was to give them a right to respond,” the source said.

“It was a difficult situation because the usual government channels have not commented in support of Matiza. So nobody is clear if the attack on DIDG was sponsored by government or if it is a personal project that could come back to haunt the paper.”
Meanwhile, NRZ advisors Deloitte have been sucked into the scandal after they allegedly started reporting directly to Matiza despite having been contracted by NRZ.
DIDG is advised by Atherstone and Cook, Webber Wentzel, EY, Sandama Legal and Costa Madzonga Attorneys.

“The accusation that we avoided the Transport ministry and Deloitte are without merit for the simple reason that the contracting party is NRZ.

“Deloitte is an advisor to NRZ and the there is no basis for us to engage them or the Ministry of Transport,” Chimhandamba said.

“We communicate directly with NRZ and we made it clear to Deloitte after they attempted to communicate directly with us that there was no legal basis for such communication.

“Matiza appears to be dealing directly with Deloitte which is something of a curiosity as their fiduciary responsibility is to NRZ.”

NRZ faces liabilities emanating from the transaction after Transnet delivered 13 locomotives and 200 wagons in 2018 as an interim solution.

At least US$5 million in unpaid lease fees would become due if the transaction falls through. DIDG has reportedly incurred transaction costs in the region of US$8 million in structuring the deal.
Efforts to secure comment from the mandated lead arranger, Afreximbank, were unsuccessful.

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