dyton mupawaenda
There is, in several quarters, an assumption that anything the Zimbabwe Government does must be of evil intent simply because they loathe Zanu PF, the party forming the Government, is unfortunate.
It is more disturbing when there is no need to check facts, but just publish twisted versions and jump to wrong conclusions.
The latest example of this is the fuss in certain media, fuelled by a failed opposition politician with ambitions to have his corruption charges withdrawn so he can return home, at least on holiday without his warrant of arrest being executed, over the proclamation last week that the sovereign wealth fund, now named the Mutapa Investment Fund, was exempt from the Public Procurement and Disposal of Public Assets Act.
It was immediately assumed by this opposition politician and a small group of journalists that this meant that the 20 companies now wholly or partially owned by Mutapa were exempted from the provisions of the Act.
The facts are otherwise, as Permanent Secretary for Finance, Economic Development and Investment Promotion Mr George Guvamatanga carefully explained after the weekend.
The 20 companies remain as they were before the State shareholding was transferred to Mutapa from whatever ministry or other entity in Government was holding the shares. Some of those companies, usually the ones where the State, and now Mutapa, was the sole shareholder are under the Procurement Act.
Others, where there is a joint venture or where Mutapa is a minority shareholder, may be or may not be.
You will probably find, if you delve through the chains of shareholding, that a company that is subject to the Procurement Act owns or partially owns a subsidiary that is not, or it itself could be exempt, but own a subsidiary that is not exempt.
If any of the companies owned or partially owned by Mutapa were, or if part of them were, subject to the provisions of the Procurement Act then they remain subject to that Act. If there is need to exempt a particular company from the Act, then that would require a separate proclamation, and if some company acquired or formed by Mutapa was brought under the Act, then that would be announced.
There is a lot of misunderstanding over just what Mutapa Investment Trust actually is. It was set up recently under a fairly long and complex statutory instrument, which will need to be made permanent by an Act of the new Parliament now summoned.
That in itself will generate debate in Parliament that will clear a lot of misunderstanding over just what this trust is supposed to do and how it will operate.
Essentially it acts as the same as a holding company or an investment company, although legally it is bit different, that owns shares in enterprises that operate under the Companies Act.
It was set up to hold the State shareholding in companies that are supposed to make a profit, at least enough to contribute to their own new capital requirements, and which hold the actual physical assets, the mines, factories, power stations, railway lines and the like.
Some of these are paying dividends, some require a lot of restructuring and injections of capital.
They were transferred from operational ministries to Mutapa for a lot of sensible reasons, one being that while a line ministry has the technical expertise to judge the technical performance of a particular company, it probably lacks the financial and operational expertise to make meaningful input into the operations of the company.
Mutapa itself does not hold these physical assets owned by the companies whose shares it holds.
A tiny fraction of one percent of its assets will be the head office of the trust, just a few vehicles, computers, software, desks and chairs. Well over 99 percent of its assets at the moment consist of 20 share certificates. So it is a lot different from most State entities.
Mr Guvamatanga made it clear that the particular operations of the trust meant that the existing provisions allowing for a State-owned entity to be removed from the requirements of the Procurement Act, as it was a financial holding entity that needed to be able to compete in that environment.
It is easy to imagine examples of this. For example, say a major mining company was being dumped by its private owners, possibly because other operations of that company, perhaps in other countries, had gone bust and the viable Zimbabwean operation needed to be sold to raise cash.
Strict enforcement of the Procurement Act would preclude Mutapa from bidding, since the seller would definitely not be a company cleared previously to sell mines to State entities. Now Mutapa can make an assessment of the viability and value of the mine and put in a realistic bid and if it wins take over the shareholding.
There are other examples where bringing in a private investor, or an outside investor, into another of the 20 companies would make sense, and while bids can be sought to get the best deal the final decision has to be on financial grounds. This is a shareholding issue, not an operational issue.
A major function of Mutapa does not involve procurement in any way. This is where it needs to use its right as a shareholder, or major shareholder or sole shareholder to ensure that there is a competent board of directors and top management who can maximise the revenue of the company, or create profits or turn the company around if it is semi moribund, as some of the 20 now under Mutapa definitely are.
It also needs to demand that these companies do issue their annual accounts and reports, on time, and while the concerns are private limited companies, that is none of their shares are sold to the public on a stock exchange, Mutapa may well wish the stronger reporting requirements of a stock exchange company are followed, so its own annual reports and accounts are detailed.
Mutapa has been set up to hold, for the benefit of the people of Zimbabwe, shares in enterprises, and that is why its own reporting structure is detailed, so we all know what it is doing. The exemption clause exists in the Procurement Act for a good reason, and as Mr Guvamatanga explained Mutapa had those good reasons.
But the whole storm in a tea cup, misinterpretation and even deliberate misinterpretation, designed to prove evil, could have been avoided if those so keen on throwing dirt had first taken the trouble to find the facts and then, with those facts, exercised their rights of free speech.
Using the wrong facts simply makes nonsense of that right, and shows up the ignorance of those who argue on incorrect data.
Online Reporter