The government of president Robert Mugabe has seized majority control of troubled mobile telecommunications firm Telecel Zimbabwe in a move that analysts say is clearly meant to frustrate emergent opposition leader Joyce Mujuru, who holds a significant stake through nominees.
Public service, labour and social services minister Prisca Mupfumira confirmed the take-over by government of a majority stake in Telecel Zimbabwe.
“It is only proper that we allow Government, through its institutions, to take over the ownership and allow Telecel to run as a private company. It is Zarnet, a Government company which will be taking over,” Mupfumira said.
The minister said Zarnet, a state firm, had paid the purchase price of $30 million for a majority stake in Telecel with funds from the National Social Security Authority (NSSA).
Mujuru facilitated the setting up of Telecel while she was information, posts and telecommunications minister in Mugabe’s government and a leading member of the ruling Zanu PF party in the 1990s. Mujuru worked hard to block the competition coming from Strive Masiyiwa’s Econet Wireless, which has become the largest mobile operator in the country, with Telecel being the third largest. Mujuru’s interest in Telecel was held by the firm’s exiled chairman James Makamba, a close relative of the former vice president’s murdered husband, General Solomon Mujuru. Makamba was hounded out of Zimbabwe amid allegations he had sex with Mugabe’s wife Grace Mugabe.
Telecel has become a battleground in the race to succeed the ailing 92 year-old Mugabe. Mugabe’s nephew Patrick Zhuwao, head of the so-called Empowerment Corporation, a supposed investment vehicle for black Zimbabweans which is actually a front for Mugabe family interests, recently had a bruising fight for the job of chief executive of Telecel Zimbabwe. He lost to Angeline Vere.
The takeover of Telecel has sparked controversy as it was done on Mugabe’s orders without any due diligence. Zanu PF Uzumba MP Simbaneuta Mudarikwa queried the deal, saying no critical evaluation of the value of Telecel was done.
“Were there any external consultants who were involved? If there are any consultants who were involved, what was their view because it was done in less than a month and NSSA then moved into Telecel,” Mudarikwa said.
Mudarikwa also questioned if there was a long term plan to sell some of the shareholding in Telecel to the indigenous people “because we cannot have a situation where NSSA is crowding indigenous people out of business”.
Mupfumira however claimed that due diligence was done and it was “a proper and wise decision to take over the running of Telecel by Government not as Government but through NSSA and Zarnet.”
“This is not a loan to Zarnet as NSSA has for the intervening period assumed the rights and obligations of Zarnet. NSSA considers Telecel Zimbabwe to be a perfect fit to its banking and insurance business and to the distribution of benefits through mobile platforms. NSSA also sees the cash generating potential and enhanced returns from Telecel as a good attraction for much in future pension liabilities,” said Mupfumira.
Telecel had a 60% foreign and 40% local shareholding. Government took the 60% from foreign owners and is now in the process of dispossessing the locals in an attempt to get at Mujuru, who was fired by Mugabe in 2014 after her presidential ambitions became apparent. Mujuru has since formed the Zimbabwe People First movement of which she is the leader, positioning herself to challenge Mugabe at presidential elections scheduled for 2018. The panicky government has started attacking and dismantling businesses owned by herself and her associates.
Mupfumira confirmed that government planned a complete takeover of Telecel Zimbabwe
“It was only prudent for Government to ensure that whoever is acquiring the 60% is not an individual but it benefits all. There is still 40% which has to be sorted out which we are all aware that was not properly managed over the years,” said Mupfumira.
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