Old Mutual targeted
Alleged culprit in chief for its interests in Zimbabwe
KEEN TO DO business in Zimbabwe? Eager to lubricate your way through the political morass and provide local ruling party officials with some “encouragement” to facilitate the establishment of your enterprise in that country? Well don’t. Not if you want a long-term future in Zimbabwe, cautions the MDC – the country’s official opposition that’s aiming to achieve its long-held aim to oust President Robert Mugabe at elections either towards yearend 2011 or early next year.
The warning by exiled MDC politician Roy Bennett came at a recent fund managers’ conference in Cape Town. “When the day of judgment comes I will not lift a finger to save them from the consequences of their actions. Quite the contrary. And I’m unreservedly confident I will have a powerful constituency behind me. If those companies choose to reap the whirlwind, then so be it.”
Culprit in chief, says Bennett, is Old Mutual, which through its South African investment arm OMIGSA and its Zimbabwe subsidiary, has numerous interests in that country, where it manages the pension funds of 500 000 people. Among those is a pre-independence 18% stake in Zimpapers – publishers of the pro-Zanu Daily Herald and Bulawayo Chronicle newspapers, as well as an indirect 1,5% stake in a company called Mbada Diamonds in the Marenge diamond fields, via its interest in New Reclamation Group. Bennett says Old Mutual – through its association – is complicit in the blood diamond trade. Bennett claims Zanu (PF) militia remain active in his Chimanimani constituency and are being funded by the spoils of the Marange diamond fields.
The allegations aren’t new, but the fact Bennett has become increasingly outspoken about the controversial investment – and is making his accusations public – is causing something of a rethink. Exactly what the current internal debates are, Old Mutual isn’t saying. However, it’s thought to be reconsidering at least its Reclamation Group investment but won’t comment on what it says is a “sensitive matter”.
Old Mutual has previously insisted diamonds from the region are governed by the Kimberley Process – a diamond industry initiative aimed at ensuring blood diamonds don’t find their way to market. The mining activity has received the nod of approval from Tendai Biti, the MDC’s Finance Minister in Zimbabwe’s Government of National Unity. Audit firm KPMG has certified all flows from Mbada have been paid “in accordance with all legal agreements”.
That doesn’t make Bennett’s assertions any less embarrassing and perhaps more concerning for Old Mutual as it eyes the potential political transition in that country.
Old Mutual isn’t alone. While Bennett focused his public attack on the life insurer, he also raised concerns about the role of the mining industry in his country. “There’s a need for reflection by major mining houses. Some of those institutions must come to terms with their unacceptable complicity in Mugabe’s blackmail. There’s no excuse for Impala Platinum – in an effort to placate Zanu (PF) and Mugabe – to again offer the state mining rights in Zimplats, a subsidiary it already owns and controls... There’s no excuse for Anglo Platinum to have ceded a huge chunk of its ground just before the 2008 elections – ground quickly sold on by a desperate and cash-poor Zanu (PF) at a US$100 million profit.”
Bennett appears emboldened and unlikely to let his campaign lie dormant.