Mawere: A response to Professor Mufuka

via Mawere: A response to Professor Mufuka – New Zimbabwe 01/05/2015

THE recent xenophobic attacks against so-called foreigners has rightly or wrongly provided fodder for analysts to add their voices to the myriad of issues that typically arise from any rational discourse on such a complex and controversial matter.

Indeed, Professor Ken Mufuka, in an article entitled: “Xenophobia – Barking at the wrong tree” sought to borrow Brilliant Mhlanga’s argument that Zimbabweans are probably looking at xenophobia with a jaundiced eye by asserting that before Zimbabweans condemn South Africa they ought to look at their own history and apportion blame where it belongs.

However, Professor Mufuka instead of directing his focus on the issue of xenophobia and why, in his opinion, he believes that by Zimbabweans, however defined, reacting to the re-manifestation of a peculiar but not a new kind of black-on-black hatred, a conclusion can be legitimately drawn that they are barking at a wrong tree.

By its very nature, xenophobia, is an extremely complex issue that requires sober and rational minds to appreciate its true causes.  South Africa is a melting pot but no shared view has been established as to who should be in or out of the pot.

Although God created the earth, he deliberately did not venture to complete the task by introducing a mechanism to constitute nation-states. This job was left to human beings and not animals. Human beings are self-centred and, if God was human, there is no doubt that the exclusionary approach to nation-state building that the white settlers sought to institutionalise would have been the universal norm.

Ordinarily, I would have been tempted to ignore Professor Mufuka’s input but when one’s name is mentioned recklessly and in a defamatory and injurious manner, one is compelled to respond to the issues as they are revealed in the interests of not only good scholarship but to assist future generations who may be unfairly confronted with untested opinions clothed as facts. Indeed, one would naturally be tempted to accept that opinions coming from learned persons like Professor Mufuka have passed the litmus test of “facts.”

Business model

Professor Mufuka states in the article that: “The affairs of Zimbabwe are run by a mafia-type monopolistic fee-collecting cabal,” without providing credible facts regarding the context and content of the alleged “mafia-type monopolistic fee-collecting cabal”. He proceeds to state as fact that: “Its genius lies in its simplicity,” suggesting that the existence of the so-called cabal is common cause.

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Based on the above self-serving and intellectually dishonest hypothesis, Professor Mufuka proceeds to contextualise the problem statement by asserting that he spent five years studying what he described as the Mutumwa Mawere saga yet at no stage has he sought to verify any of the facts that may have been revealed to him.

Professor Mufuka, a renowned scholar and scribe, clearly has created a laboratory in which I am a subject but has to-date never sought to engage me before putting pen to paper but chose to believe as fact a so-called mafia boss’ interpretation of events and facts pertaining to experiences that he was not a party to as proper, instead of having the decency to allow both sides of any dispute to be heard.

Professor Mufuka makes the point that his source intervened after being tired of reading his wrongful interpretations regarding a subject matter that he had been studying presumably in camera for five years. He then makes the point that I bought the mining rights to Zvishavane-Mashaba Mines, an asbestos conglomerate with a potential foreign exchange revenue totalling 15 percent of the entire intake when in truth and fact, I never purchased any mining rights.

On the contrary, the truth is that in 1996, Africa Resources Limited (“ARL”), a company duly registered in the British Virgin Island (“BVI”), acquired the entire issued share capital of SMM Holdings Limited (“SMMH”), a company incorporated in United Kingdom and not Zimbabwe. It was SMMH that was and is the sole shareholder of SMM Holdings Private Limited (“SMM”) and not me in my personal capacity.

One would expect Professor Mufuka to state the facts as they are especially when regard is had that the mineral rights were granted to SMM when it commenced operations over 100 years ago and, therefore, the acquisition of SMMH in the UK did not in any way involve any mineral rights but share certificates.

He concludes that: “In order to achieve such a feat, the Mafioso explained to me, one needed the support of the mafia and one of those persons is a Mukuru-mukuru,” without any regard of the fact that the Sale and Purchase of Shares of a UK company by two competent contracting parties did not require the support alleged in as much as the purchase of a property by Professor Mufuka that involves an exchange of value does not need the support of third parties.

If Professor Mufuka lived in a communist state, one would understand but for a person living in America to miss the idea behind America which idea must have occupied its founding fathers as they sought to create the foundations of a nation-state founded on the rule of law and respect for the rights of persons and their property; is unconscionable and irresponsible.

Accordingly, notwithstanding any intellectual witchcraft coming from a so-called Mafioso, Professor Mufuka as an objective person would have known that prior to the acquisition by ARL, SMMH was a property of someone and the choice of the UK jurisdiction in respect of the acquisition was not accidental as Zimbabwe and its state-actors had no conceivable jurisdiction on property situated outside the borders of the country.

It was, therefore, within the power of the relevant owner to dispose of its property as it saw fit without any assistance of the unnamed “mukuru-mukuru” whose identity has already been disclosed as Vice President Mnangagwa, by Mr. Patrick Zhuwao. If indeed, it is true that VP Mnangagwa induced the seller of the shares held in SMMH to sell to ARL, then one must explain how a Zimbabwean Minister’s influence could cross borders to the UK in a manner that would have convinced the lawful holder of rights to give up such rights for no value to the holder.

It is not explained by Professor Mufuka how this absurd construction could be given life to especially taking into account the fact that the owner of the subject property was domiciled in a jurisdiction that respects the rule of law. The version that is now peddled by Professor Mufuka as a consequence of both research and a nameless and faceless Mafioso is not supported by any statement from VP Mnangagwa whose name is clearly implicated in what would constitute an abuse of state office.

At all material times, VP Mnangagwa was a state actor and, therefore, to the extent that a valid allegation is made that he improperly used his office to advance personal interests, any rational person would not end with making baseless allegations but call for some accountability and transparency regarding the basis on which SMMH was acquired.

What is astounding is that Professor Mufuka has in his possession a copy of the Portfolio Committee on Mines and Energy’s report that deals with the very question of SMMH’s ownership and acquisition yet he recklessly continues choose to believe uncorroborated versions from the nameless character wrongly described as a Mafioso?  This approach to scholarship is unfortunate.

FBC Bank

A lot has been written about the Mafia and how the enterprise operates yet Professor Mufuka chooses to elevate and use pedestrians to confirm that which is ridiculous only to prove a baseless point. Professor Mufuka then makes the point that: “Soon after the SMM deal was sealed, he was involved in forming the FBC Bank which was supposed to be headed by banker Durajadi Simba,” without explaining my role and that of Mr. Simba as it actually unfolded.

History will record that it is not uncommon to have dreamers in our midst but establishing a bank that has been in operation for the past 19 years can hardly be regarded as a consequence of any hallucination. It would appear to Professor Mufuka that Mr. Simba was the head of an idea of a bank but in truth and fact, Mr. Simba was at the time unemployed following his fallout with his previous employer, First Merchant Bank of Zimbabwe Limited “FMB”), and I knew him in the context of my official dealings with FMB and certainly not from any political context.

I approached him to assist in undertaking a feasibility study and preparing a business case on the establishment of a bank under Mr. Gomwe and my supervision fully alive to the fact that the bank would be funded by third parties and also that he would not be guaranteed of the CEO position. He had no financial capacity to establish a bank and this was and remains common cause.

When the study was completed, a decision was made by ARL to set up a bank.  At the time, Dr. Great Makaya was also working on a similar project with Zanu PF as his partners.  Dr. Makaya indicated at the time that his consortium had the funding as well as the licence including an option to lease the Old Reserve Bank building. I then met with Dr. Makaya to discuss whether it was at all possible to join forces and we agreed to explore the option.

Dr. Makaya was working closely with the late Hon. Mahachi who was acting for Zanu PF in the consortium. We only learned later that there was no funding available.  It is worth mentioning that, at the time, the regulations limited the amount of shares a single shareholder could hold in a bank to 25% and, therefore, it was imperative to find partners.

The discussions did not go far with Dr. Makaya. However, Hon. Mnangagwa was appointed as the Secretary of Finance of Zanu PF and took over the responsibility of handling the project from Hon. Mahachi.  It was then proposed that the project should be promoted by ZIDCO on behalf of Zanu PF. Mr. J.C. Joshi was nominated to represent ZIDCO.  Mr. Godfrey Gomwe was nominated to represent ARL.  It was agreed that the ARL consortium would own 50% of the proposed bank and the remainder would be owned by the ZIDCO consortium.

The funding required to establish the bank was Z$50 million. It was agreed that the two principal parties would each contribute Z$25 million. However, when the money was called, the ZIDCO consortium did not have the Z$25 million to make good on the promise. It was the ARL consortium that financed the entire required capital. The ZIDCO consortium promised to repay the ARL consortium.

Before a license could be granted, the Reserve Bank of Zimbabwe wanted confirmation that the funds were in place and in addition had to approve the key staff of the bank as well as its directors. Directors were appointed and the board was chaired by Mr. Gomwe.  With respect to Mr. Simba, the board took the decision that due to his unresolved issues with FMB involving allegations of sexual misconduct, it was prudent to identify another person to lead the Bank.

The ZIDCO consortium proposed a former employee of the Bank of Credit and Commerce International who had previously worked for the Commercial Bank of Zimbabwe (“CBZ”) who was based in Canada at the time. Mr. Gomwe recommended Mr. Masvikwa.  A decision was made by the board to appoint Mr. Masvikwa, a diasporan Zimbabwean, who was introduced to me by Mr. Gomwe.

Professor Mufuka presumably speaking on behalf of a nameless and faceless former First Bank employee stated: “I was involved in setting up that institution, being the youngest member and was recruited by Simba,” without probing how a bank could be licensed without capitalisation and a board acceptable to the RBZ.

This nameless person was reported to have also stated that: “However, after the bank was registered, I and almost the entire team that worked on the project were booted out as a new boss, Webster Masvikwa was appointed by Mutumwa and then his cronies took over,” exposing the ignorance of the author of these words especially having regard to the fact that a CEO of a registered financial services provider had to be approved by the RBZ yet in this case no suggestion is made that Mr. Simba’s name was ever submitted to the RBZ and his possible appointment was so approved. Mr. Masvikwa’s name was the one submitted to the RBZ by the Board of the proposed bank and the name was approved allowing for the bank to be opened.

Professor Mufuka then stated that: “The issue here is not legal but loyalty to the Mafioso who expected to benefit from the brilliant young entrepreneur whom they had sponsored,” without any regard of the factual and legal matrix involved. It is self-evident that the so-called brilliant young entrepreneur is me and a suggestion is made that VP Mnangagwa sponsored me. It is this kind of thinking that has helped destroy Zimbabwe’s history and narrative of placing political actors at the centre of everything that works yet cognisant of the systemic failure of state-actors to deliver the promise.

I am characterised by Professor Mufuka and like-minded people as a mere stooge of the choices and actions of third parties simply in order to assert a stupid argument that prosperity is a function of political agency rather than the validation of the market place.  Using this warped prism, it is easy to understand how Africa’s stories are easily distorted by seemingly well-meaning talking heads.

The people involved in the project are still alive and it would cost nothing to verify the facts.  Some of the directors involved from commencement of First Bank are still on the board yet, in this case, Professor Mufuka chooses the easy road to arrive at a preconceived destination instead of allowing the facts to take him where the facts are.

In the world that Professor Mufuka operates in, it would appear that fiction reigns as no rational person would conclude that loyalty could be the appropriate choice of words to explain the formation and operations of First Bank for such a long time and fail to acknowledge the role of the people who gave birth to the idea of broadening and deepening inherited financial markets.

Professor Mufuka then concludes that: “A change of mind by Mawere left the Mafioso in the cold and embittered”, without any regard of the correct facts. I neither changed my mind on anything nor was any change of mind necessary. Professor Mufuka may be blind to the fact that First Bank was listed and its shareholding was disclosed in the listing documents to allow him to speculate.

The propensity to create an imagined reality is not unique to Professor Mufuka but reflects the general Zimbabwean psyche that seeks to import mafia type vocabulary to explain commercial issues and, in so doing, seek to appropriate an agency role to the actions of others. Professor Mufuka has been relentless in trying to find facts which would support his hypothesis that without the hand of politics, business success is impossible in Africa yet he fails to appreciate that whites who lost political power in 1980 are still surviving.

In addition, the correct understanding of entrepreneurship is clearly missing in his worldview for if that understanding existed, it would be self-evident that a bank like any commercial enterprise succeeds or fails because of the participation of the customers who cannot be compelled to do that which is not in their self-interest.

The blindness that has informed many of the opinions of African thought leaders is not different from the idea that industrialisation can be a consequence of slogans dressed as summit communiques as was witnessed in Harare at the SADC Heads of State meeting. Indeed, it is easy to imagine a factory being born and operating viably and sustainably but it is another to make it happen.

Professor Mufuka in a predictable manner stated that: “They told me that “mwana akanganwa kwaakabva” (the child has forgotten his roots) which I, at first, assumed to be mere disrespect of the elders,” clearly failing to use his intellectual tools to interrogate half-backed and self-serving opinions dressed as facts by nameless and faceless persons.

He then concluded that: “The result was catastrophic. The mafioso nationalized the company, using the same people who had worked for him to take over its running,” without appreciating the fact that First Bank, an idea that was conceived by black persons, is still alive and well.

Professor Mufuka may be blind to the fact that I was never involved in the operations of the bank.  In addition, from the outset, I was not a director of the Bank. In the premises, the suggestion that the Bank was nationalised is misplaced as is the idea that I was ever involved in its running. This fact could easily have been confirmed by any serious person seeking to establish the truth.

With respect to SMM’s mining operations, Professor Mufuka, stated that: “Management and entrepreneurship/investment are two separate worlds. Despite a back order list worth $100 million, and 4,000 workers in situ, the company closed,” without stating the precise point he sought to make. He may be oblivious to the fact that the divestment of the control and administration of SMM by its board was a consequence of an act of state and, therefore, one must interrogate the wisdom or lack thereof of state actors interfering in the affairs of private entities.

SMM provides a unique case study that unfortunately is daily being polluted by dishonest intellectualism and pseudo journalism. It is my hope that intellectuals will begin to speak to the truth not for political expediency but as a necessary exercise to help heal the wounds caused by ignorance and gossip.

Finally, Professor Mufuka concludes that: “This business model was repeated in Marange Diamond fields. Four companies, including Mbada (a government supported company) were involved. This time the mafioso took no chances, they collected their fees up front before the Internal Revenue got its share,” again without any regard to the supporting facts that would lead any rational person to conclude that the SMM experience was part of any business model let alone that a model ever existed.