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Harare - Zimplats, the Zimbabwean subsidiary of Impala Platinum Holdings
[JSE:IMP] (Implats), is heading for a collision course with that country’s government after it refused to pay consultancy fees for a controversial $1bn indigenisation deal.
According to reports, the Zimbabwean government through the National Indigenisation and Economic Empowerment Board (NIEEB) reportedly wrote a letter to Zimplats on February 13, asking the company to pay Brainworks US$16.7m “representing advisory fees for the provision of advisory services to the government of Zimbabwe and the (NIEEB) in the implementation of the Zimplats indigenisation plan.”
Zimplats in turn wrote back on February 22, advising the NIEEB that it is not in a position to honour the payment on the basis that Brainworks was engaged by the NIEEB and was acting for and advising the NIEEB/the government in the negotiations.
In letters, Implats and Zimplats said Brainworks Capital’s $17m fee was the responsibility of the Zimbabwe government and the National Indigenisation and Economic Empowerment Board (NIEEB) which engaged the firm.
NewZimbabwe.com also picked up the story, quoting Zimplats as saying paying Brainworks' fees would also likely be a breach of corporate governance standards.
“We believe you are aware that technically, the company cannot pay one shareholder costs without extending the same to other shareholders as that can be misconstrued as a dividend payment,” the Zimplats CEO wrote in his letter to the NIEEB.
The latest revelations are part of a storm that has been brewing in Zimbabwe amid allegations that the ongoing empowerment deals were not done above board.
The engagement of Brainworks on the Zimplats deal is said to have been done without following proper procedures.
According to Zimbabwean laws, any government transaction above $300 000 has to go to tender but Brainworks Capital was awarded the multi-million dollar tender verbally.
The country’s State Procurement Board, which awards tenders of this magnitude, is not even aware of the deal between Brainworks and NIEEB.
MDC-T leader Morgan Tsvangirai also questioned the deal, calling for a parliamentary investigation into the country’s indigenisation programme.
Tsvangirai said he was concerned about allegations of gross irregularities, and claims only a few individuals are profiting from the deals.
Finance Minister Tendai Biti also vowed to investigate indigenisation agreements reached with various foreign companies. According to Bloomberg, Biti said some of the agreements may have to be referred to parliament for approval.
The controversy surrounding the deal has resulting in it being christened NIEEBgate, as is it is said to be akin to the Watergate scandal that led to Richard Nixon’s resignation in 1974.
- Fin24
According to reports, the Zimbabwean government through the National Indigenisation and Economic Empowerment Board (NIEEB) reportedly wrote a letter to Zimplats on February 13, asking the company to pay Brainworks US$16.7m “representing advisory fees for the provision of advisory services to the government of Zimbabwe and the (NIEEB) in the implementation of the Zimplats indigenisation plan.”
Zimplats in turn wrote back on February 22, advising the NIEEB that it is not in a position to honour the payment on the basis that Brainworks was engaged by the NIEEB and was acting for and advising the NIEEB/the government in the negotiations.
In letters, Implats and Zimplats said Brainworks Capital’s $17m fee was the responsibility of the Zimbabwe government and the National Indigenisation and Economic Empowerment Board (NIEEB) which engaged the firm.
NewZimbabwe.com also picked up the story, quoting Zimplats as saying paying Brainworks' fees would also likely be a breach of corporate governance standards.
“We believe you are aware that technically, the company cannot pay one shareholder costs without extending the same to other shareholders as that can be misconstrued as a dividend payment,” the Zimplats CEO wrote in his letter to the NIEEB.
The latest revelations are part of a storm that has been brewing in Zimbabwe amid allegations that the ongoing empowerment deals were not done above board.
The engagement of Brainworks on the Zimplats deal is said to have been done without following proper procedures.
According to Zimbabwean laws, any government transaction above $300 000 has to go to tender but Brainworks Capital was awarded the multi-million dollar tender verbally.
The country’s State Procurement Board, which awards tenders of this magnitude, is not even aware of the deal between Brainworks and NIEEB.
MDC-T leader Morgan Tsvangirai also questioned the deal, calling for a parliamentary investigation into the country’s indigenisation programme.
Tsvangirai said he was concerned about allegations of gross irregularities, and claims only a few individuals are profiting from the deals.
Finance Minister Tendai Biti also vowed to investigate indigenisation agreements reached with various foreign companies. According to Bloomberg, Biti said some of the agreements may have to be referred to parliament for approval.
The controversy surrounding the deal has resulting in it being christened NIEEBgate, as is it is said to be akin to the Watergate scandal that led to Richard Nixon’s resignation in 1974.
- Fin24
