Old Mu­tual tar­geted

Al­leged cul­prit in chief for its in­ter­ests in Zim­babwe

Finweek English Edition - - INSIGHT - BRUCE WHIT­FIELD brucew@fin­media24.com

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.

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