West urged to lift sanctions

Business Reporter
MASAWARA Plc chief executive Mr Shingi Mutasa last week revealed that sanctions imposed on Zimbabwe almost derailed their plans to list on the Alternative Investment Market in London.
He said this was after one of their firms was incorrectly listed as an investor in a firm under EU and US sanctions.
“Sanctions must be lifted as they prevent some companies from carrying out transactions with other firms under sanctions. They (investors) said we were invested in First Bank, so they would not be allowed to invest,” he said.
The Masawara CEO said one of his firms had been mistakenly included among the investors of FBC, a local financial services group, on the EU-US sanctions list.
World-Check, a web-based provider of structured risk intelligence, was responsible for erroneously listing the firm as an FBC shareholder.
Mr Mutasa was recounting Masawara’s experience during a meeting organised by DEAT Capital for local business people to interact with officials from the London Stock Exchange on capital raising opportunities available in London for local industry.
Masawara Plc became the first locally-owned firm to list on London’s AIM through an IPO, raising US$25 million to acquire assets in Zimbabwe.
Fund manager Investec, now a significant shareholder in Masawara, had threatened not to invest in the AIM-listed firm if it was a shareholder in FBC.
The company had to spend huge amounts of money and time engaging lawyers and the Zimbabwe Stock Exchange to prove it was not an investor in FBC.
Mr Mutasa said the AIM listing was very crucial, as it was to come in handy when Masawara Plc acquired BP and Shell Zimbabwe, its first local acquisition.
“We see it as a massive advantage to what we have achieved so far (the listing of Masawara). Without it I don’t think we could have acquired BP and Shell,” he said.
The country had always been perceived as a risky investment destination, so to win the support of investors Masawara had to bring its listing advisors to Zimbabwe after which they passionately recommended the firm to investors.
Mr Mutasa said the due diligence of the firm was very painful considering Masawara was a test case coming only after an earlier listing on AIM by NMB.
“After we identified the advisors we had to fly them to come and talk to us in Zimbabwe. That transformed their perceptions. Advisors needed to equip themselves and put their names behind Masawara,” said Mr Mutasa.
Subsequent to the acquisition of BP and Shell assets in Zimbabwe, Masawara acquired a 50 percent stake in internet service provider Terelix last month.
Masawara will seek to identify investment opportunities firstly in Zimbabwe and then spread to the rest of the continent through partnerships.
It took Masawara four months, from February to August, to list on AIM. The firm had to secure authority from the Ministry of Finance and Reserve Bank.
Masawara is an investment firm majority owned by Mr Mutasa’s FMI Holdings, which owns 30 percent of public quoted TA Holdings and 40 percent of Joina City.
Mr Mutasa last week said listing on AIM was more stringent, more demanding and required more details than was the case with listing locally.
However, he pointed out this provided wider access to a more diversified pool of investors.