GOVERNMENT’S 2005 hostile take-over of the Shabanie-Mashava Mines (SMM) Holdings has resurfaced with the Reconstruction Act, blamed by many for destroying several companies, coming into the spotlight.
Former SMM workers, who are languishing in abject poverty in and around Zvishavane, believe the law brought nothing but suffering for former mine workers who are still waiting for their benefits close to two decades after the asbestos miner shut its mines.
Also under spotlight is former justice minister Patrick Chinamasa who allegedly sidelined the Attorney-General’s Office as he rushed the law to grab the lucrative asbestos mines.
Chinamasa, however, refused to respond to the allegations made against him.
“I will not enter a discussion with you over this matter. I am not the current Minister of Justice. If there are any issues arising from the enactment of that piece of legislation refer them to Cde (Ziyambi) Ziyambi. There is no point in entering a purely academic discussion to no end,” Chinamasa said.
Ziyambi’s phone was not reachable at the time of going to print.
Government took over SMM management through the Reconstruction of State-Indebted Insolvent Companies Act and appointed an administrator, Arafas Gwaradzimba.
The law was enacted by the late former president Robert Mugabe to protect SMM — formerly owned by Zimbabwean businessman Mutumwa Mawere — from legal action and the attachment of the company’s property by local and foreign debtors.
Former workers had no kind words for the government adding that the Reconstruction Act destroyed their lives and savings.
A former employee, Misheck Gwatida, who worked for SMM for 25 years lamented the government’s takeover of the company saying the move left the workers in abject poverty.
“The company was operating well before the government took over and everything ground to a halt. No one received their benefits although the pay was put as outstanding salaries promised to be paid.
“We are still waiting for the money while some have taken ownership of the company houses as a form of payment because prospects of getting our benefits have dwindled over the years,” he said.
Gwatida also painted a gloomy picture when asked about the prospects of the company operating again especially under government leadership.
Another former employee who is still waiting for his terminal benefits launched a vicious attack on Chinamasa.
“There were intermittent shutdowns, but everything ground to a halt when Chinamasa appointed an administrator and we lost everything,” the former employee said.
“They lied that the company was now owned by indigenous people, but it was just a ploy to loot the company’s resources. We never benefited and we are still languishing in poverty otherwise we could have gone back to our rural areas.”
The former employee who spoke on condition of anonymity as he still harbours prospects of getting his benefits said they contributed to the Mining Industry Pension Fund (MIPF).
“We were contributing to MIPF for future benefits but all of it was lost to these government officials. We contributed a lot so that we could retire comfortably, but everything was lost. The fact that money was being deducted from my payslip but did not reach the MIPF means we lost our benefits to the people who grabbed the company,” the former employee said.
Meanwhile, the Friends of Shabanie-Mashaba Mines (FoSMM), a non-governmental organisation, which monitors corporate and public policy in the southern Africa region, is also pursuing the matter rigorously.
FoSMM spokesperson Brian Tawanda Manyati accused Chinamasa of allegedly leaving out then acting-AG Bharat Patel in crafting the Reconstruction Order.
Manyati charged that Chinamasa in November 2005 made an application belatedly or in retrospect to the High Court of Zimbabwe seeking that the Reconstruction Order of SMM of 2004 through use of the Presidential Powers be confirmed through an Act namely the Reconstruction Act.
“The whole ploy deceptively left out the Attorney-General’s Office when the locus to apply to the High Court for a confirmation as done in 2005 was expressly vested in the AG not the minister (Chinamasa),” Manyati said.
The matter surfaced in August this year when the FoSMM filed papers at the Johannesburg High Court seeking an order to compel South African President Cyril Ramaphosa to ignore an administrator appointed under the Zimbabwe’s Reconstruction of State and Insolvent Companies (Recon) Act to take charge of the Zvishavane-based asbestos miner.
In case number 21/38369, FoSMM claimed that the South African courts erred by recognising SMM administrator Gwaradzimba in legal proceedings in that country without seeking leave of the courts.
FoSMM cited Ramaphosa as the first respondent and his Trade and Industry minister Ebrahim Patel as the second respondent, in the application filed on August 12, 2021.
“This is an application to compel the first respondent in his capacity as the Chief of State, to reverse and ensure that the precedent set by the recognition and enforcement of State and Insolvent Companies Act, a law that was authored and implemented by the Government of Zimbabwe in 2004 in relation to the affairs of SMM Holdings (is voided),” FoSMM said in the court application.
FoSMM also argued that the Act was deficient in quality, and was in contravention of the South African public policy, international law, and Southern African Development Community Treaty and Protocol on principles of democracy and rule of law.
“In this case, it is not in dispute that after failing in its attempt to extradite the shareholder using the judicial process in South Africa, the government of Zimbabwe proceeded to create special legal circumstances allowing for the executive branch of government to substitute the role reserved for the judiciary by divesting and depriving without notice, the control and management of SMM and replacing such directors with a government nominee,” FoSMM said.
Enactment of the Act followed a commercial dispute which spilled into South African courts after SMM failed to pay Petter Trading (Pvt) Limited, a company based in the neighbouring country, its dues for goods supplied, having been blocked by the Reserve Bank of Zimbabwe, according to court papers.
The Johannesburg court ruled in favour of Petter Trading, prompting the Zimbabwean government to enact the Reconstruction of State-Indebted Insolvent Companies Act.
FoSMM also sought the court’s intervention after its efforts to engage Ramaphosa and Patel were fruitless. The organisation said it wrote to both respondents this year over the matter, but they did not respond. (Zimbabwe Independent)