Chinamasa must go – MDC99

MDC99 STATEMENT – Below is an excerpt of the parliamentary debate on the question of SMM Holdings Private Limited (SMM) that took place, five years ago, on Wednesday, 20 July 2005.

MR. SIKHALA: The Administrator who was appointed for the administration of SMMH is Mr. Afaras Gwaradzimba and was appointed directly by yourself and the question to buy shares on behalf of the government to have total control of SMMH — what is your comment?

MR. CHINAMASA: It is true that the company he is referring to acted as the nominee of the government to acquire controlling interest in T & N Plc which was a shareholder in SMMH — that is correct and the acquisition was done.

At the time, I was a member of the House of Assembly representing St Marys constituency in Chitungwiza. At issue, was the interest of the government in SMM given that its shares were held solely by a private concern? What I sought to understand at the time was why the government would use a nominee company to purchase shares in the United Kingdom while during the same debate Hon. Chinamasa said:

"If you start your business through borrowings and you do not return this debt, you give control of your company to the creditors of the business. Mawere did not use any savings but he used government guarantees to purchase the com any. He was hoping that if the company flourishes, he would be able to pay back what he would have borrowed. That did not happen. If he had run the operations in a prudent manner, he would have been able to come out of debt, but he did not".

I raised these issues because my concern was the implications of the placement of SMM under the control of a state appointed Administrator on investment and the protection of property rights. I joined the Movement of Democratic Change because I felt then as I still do that Zimbabwe can only succeed if there is rule of law.

However, if the Minister charged with the responsibility of promoting justice and equity is then the same party implicated in undermining the rule of law something fundamentally wrong would have taken place in our young constitutional democracy.

If SMM was, indeed, state indebted, why was there a need to introduce new draconian legislation to protect a genuine creditor? If Mawere used state guarantees to acquire SMM, then why would it have been necessary for the same state to use a nominee company to acquire the very same shares it had guaranteed?

Having taken a keen interest in this matter, I have had the occasion to study the UK judgment in which AMG Global Nominees Private Limited was used as nominee to acquire shares in two UK registered companies i.e. SMM Holdings Limited and THZ Holdings Limited. It was AMG that applied to have the shares held by Mawere’s company rectified but the application was dismissed.

If the application was dismissed, how then could Hon. Chinamasa misrepresent the facts in the House that the acquisition was done when he knew that this was a lie?