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Masiyiwa fights defamatory suits in South Africa

Telecommunication magnate, Strive Masiyiwa is embroiled in a legal suit, after dragging three compatriot for defamation in a matter relating to the origins of Econet Zimbabwe and its relationship with TS Masiyiwa Holdings (Private) Limited.

Masiyiwa, a London based Zimbabwean businessman and the founder and Executive Chairman of diversified international telecommunications, media and technology group Econet Wireless, on the 13th May 2019 filed an application with South African High Court, Gauteng local Division, Johannesburg with Econet South Africa as the First Applicant, Econet Wireless Zimbabwe Limited as Second Applicant, Econet Global PTY LTD (Mauritius) as Third Applicant and Strive Masiyiwa himself as the Fourth Applicant.

The matter cites Rutendo Benson Matinyarare as the First Respondent, Mutumwa Dziva Mawere as second while third is Pardon Gambakwe. The application seeks an order in the following terms:
5.1 The respondent be indicted from publishing in any form, any defamatory matter, including innuendo, and any injurious falsehoods of and concerning the Applicants, their business and/ or any of the Applicants’ products or services (collectively “defamatory matter,”

5.2 The respondent immediately remove from publication all and any forms of defamatory matter including without limitation from publication via video posts, comments or statements of any media or internet site/s including but not limited to www.youtube, www.gambakwe.com and www.facebook.com (collectively “all media”); and 5.3 The Respondents be ordered to refrain from publishing whether directly or indirectly, all and any defamatory matter on all media.

In his affidavit signed on 24th April 2019 at Sandton Police Client Service Center in South Africa, Dr Kuzozvirava Shumba said this matter involves a factual and legal dispute in relation to the origins of a company called, Enhanced Communications Networks (Private) Limited (Econet Zimbabwe), and its relationship with a company called TS Masiyiwa Holdings (Private) Limited (TSM), a company in which he (Shumba) was represented as a shareholder holding 2.4 percent of its issued share capital per Prospectus, a copy which was attached.

Shumba also reiterate that it is significant that Strive Masiyiwa who is fixed with the knowledge about the issues in dispute chose to hide behind Douglas Mboweni (CEO Econet Wireless Zimbabwe Limited) who purports to have been authorized to represent him in this matter by virtue of a confirmatory affidavit. Shumba also said it is his contention that this application fits into Masiyiwa’s known strategy of hiding his fraud using parties that have no knowledge of the facts that they put before the courts.

Douglas Mboweni on behalf of the Applicants alleges that the following constitute defamatory statements in relation to the affairs of the applicants;
“Mutumwa Zviva Mawewere (Second Respondent) claims that Strive Masiyiwa’s court application to interdict the investigations that Mr. Mawere was heading in relation to corruption allegations that some officers working for First Mutual Life (FML) especially in respect of an unauthorized investment of Z$180 million that resulted in Masiyiwa gaining control of Econet on the back of a contribution by TSM Private Limited (TSM), a company in which Mr. Masiyiwa and his wife, Tsitsi, held about 67. 5% shares in.”

“The article clearly suggest that material falsehoods were included in the relevant prospectus and it is clear from the article as a whole that the allegation is being levelled that the process was tainted and designed to defraud”.  Shumba as a financier of the pre- IPO Econet argues that he has personal knowledge which Mr Mboweni does not possess since he was not involved at all at the material period.

“Accordingly, it is part of my complaint that Mr. Mboweni knowingly and wittingly misrepresented facts before the South African Court that the version that Mr. Masiyiwa who associated himself with the application is false and that a careful reading of the prospectus when juxtaposed with the true nature of the facts of this matter will confirm a crime of perjury and defeating the ends of justice.

This application constitutes abuse an abuse of the SA justice system because the correct version is known to Mr. Masiyiwa that his purported shareholding in TSM was based on the fact that TSM, a Zimbabwean registered company that was subject to exchange control limitations was the lawful owner of the equipment that was purportedly acquired by Econet at the IPO stage”.

Daniel Shumba said Mr. Mboweni knew and ought to have known that the basis of this application is based on manufactured facts that are not supported by any reality. “The allegation is made that the fourth applicant (Masiyiwa)’s family company improperly benefited as the result of an “international fraud,” which “resulted in an unjust and corrupt enrichment of the Masiyiwa family and related shareholders of TSM.”

Shumba said the evidence and facts at his disposal confirm that in truth and fact, Mr. Masiyiwa was a driving behind and fraudulent scheme that resulted in gaining the control of a company that he helped fund and more significantly the purported equipment that TSM swapped for shares in Econet was not owned by TSM and in any event TSM had no capacity to procure the equipment in question.

“It is my contention that Messrs. Mbeweni and Masiyiwa knew and ought to have known that the whole IPO was tainted with fraud.” On paragraph 1 of the affidavit Mr. Masiyiwa represents before a Court that he was the majority shareholder of TS Masiyiwa Holdings (Private) Limited (TSM) which he erroneously misrepresented as MASCOM fully knowing that MASCOM was a separate company in which Shumba was a purportedly 25% shareholder at the material time.

“I only become aware of this affidavit a few weeks ago. At all material times, I was made to believe that TSM was a company that was the vehicle of owning the shares in Econet at IPO stage or during 1998. Until then, my understanding was that Mascom was the sole shareholder of Econet yet in this affidavit, Mr. Masiyiwa represents otherwise.

On paragraph 4 Mr. Masiyiwa also misrepresented that Mascom, a company which Daniel Shumba was a shareholder, was a successor to Retrofit (Pvt.) Limited. However, in terms of company law and practice, there is no such thing as a successor of a juristic or entity. “I also draw your attention to a copy of judgement under Case Number SC251/96 in which the Learned Judge Gubbay CJ, stated as follows; TS Masiyiwa (Private) Limited (Mascom) owns the entire share capital in Econet.”

The deponent Daniel Shumba said Masiyiwa is no longer within the reach of the Zimbabwean justice system and wants to abuse the SA system to perpetuate a lie. It is important that the proper facts relating to this matter are investigated properly so that the delayed justice and equity in this matter can be known and ventilated.

The second Respondent Mutumwa Zviva Mawewere also argues that Civil Procedure and the common law in South Africa require that before a party may sue in Court of law, it must prove that it has title to sue. In this case, Mr. Mboweni must prove that he is the right person to sue and depose to factual matters in the cause and also that he has ability or capacity to substitute the fourth applicant.

In this matter, there are no averments made as to how Mr. Mboweni purports to act in relation to the applicants other than the bold assertion that he is CEO of the second applicant, a company that is domiciled in Zimbabwe, while at the same time acknowledging that the other three applicants are situated outside the jurisdiction of Zimbabwe.

A letter authored by the National Merchant Bank of Zimbabwe Limited on 22nd January, 1998 with ref: Exchange Control Application for TS Masiyiwa Investments in Mascom Botswana (Pty) Limited reads;
“This is to confirm that we, National Merchant Bank Zimbabwe Limited, bankers to TS Masiyiwa Holdings (Pvt.) Limited, will obtain Exchange Control Approval from Reserve Bank of Zimbabwe in respect of our client’s investments in Botswana.

We further confirm that our client’s application meets the normal criteria for such approvals from the Reserve Bank. We therefore have no doubt that the Reserve Bank of Zimbabwe will grant Exchange Control Approval for this investment.” The letter was signed by PF Timba Assistant General Manager, Corporate Finance Division.

In the High Court of Botswana Held at Lobatse on the 30th October 1998, in the shareholders dispute DECI Holdings (PTY) LTD 1st Applicant, Portugal Telecom Internacional, SGPS, SA 2nd Applicant and DECI Investment (PTY) Limited 3rd Applicant had dragged Strive Masiyiwa and Mascom Wireless Botswana (PTY) Limited before the court.

Judge Lesetedi had ruled that Mascom is a holder of one of only two cell network licenses issued by the Botswana Telecommunications Authority in the country. The shareholding Mascom and the relationship of the shareholders is governed by a consortium agreement entered into by the shareholders on the 11th day of August 1997 at Harare. This was before Mascom was awarded the licence.

Under the consortium agreement, the shareholding was as follows: (DECI – 36%, PTI – 25% and TSM- 14%). On the remaining 25%, 15% of the ordinary share capital was to be offered to institutional investors of Botswana origin, 5% to Southern African Enterprise Development Fund. At the time of this litigation, the aforementioned twenty- five per centum shareholding had not yet been taken up. The consortium agreement was to be an interim governing agreement pending the signing of a shareholder’s agreement, otherwise it was to lapse in the event of Mascom not being granted a licence.

Lesetedi said the governing contractual instrument is the consortium agreement has been cancelled on the basis inter alia that TSM has not paid its share call. Neither has TSM paid its contribution to DECI Holdings to make its own contribution to Mascom. TSM admits that it has not paid its share call although it now says the funds are available.

“It appears to me that if PTI had a prima facie right to cancel the agreement, then it appears to me that due to the public interest in Mascom, it is very important that an order be granted for the two companies to run with some semblance of normality in the interim pending the final determination of this matter.

Mascom was the first mobile telecom company Masiyiwa founded. He founded the company 21 years ago, few months before he established Econet Wireless in Zimbabwe. It is Botswana’s largest mobile operator with a reported 1. 7 million subscribers. Earlier in March, Econet Group spent $300 million acquiring a 53% stake in Mascom from MTN Group, thereby increasing its stake from 7% to 60%. The deal is expected to be concluded anytime soon as regulatory approval is at its final stages.

Earlier this year during his visit to Botswana and hosted by President Mokgweetsi Masisi Zimbabwe’s richest man, announced that his company, Econet Group, will list Botswana mobile network operator, Mascom, on the nation’s stock exchange later this year.

Speaking at a press conference in Gaborone, Masiyiwa said that by October this year, he intends to list some of Econet’s Mascom shares on the Botswana Stock Exchange in what he believes will be one of the biggest flotations on the bourse. “This is what I have always wanted to do …I have never held enough shareholding to push it through,” he told reporters.

On his Facebook page, Masiyiwa said that anyone who can raise $10 should be able to buy shares in Mascom. “In what I hope will be the biggest public listing ever undertaken in Botswana, I want to sell shares to anyone who can raise about 100 pula ($9.36),” Masiyiwa said.

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Botswana’s development agenda in jeopardy

21st September 2020
Botswana’s-development-agenda-in-jeopardy--water-construction

Stanbic Bank Botswana Quarterly Economic Review indicates that Botswana will fail to meet some of its Vision 2036 targets, particularly unemployment reduction and reaching high-income status.

The report says this is mainly due to the slow economic growth that the country is currently experiencing. This Quarterly Economic Review focuses on the 2020 Budget Speech.

The first paper reviews the entire budget with its key observations being that this budget is prepared as prescribed by the Public Finance Management Act; the priorities it seeks to address are drawn from Vision 2036 and the eleventh

The 2020 budget Speech, which was the maiden speech by the Minister of Finance and Economic Development, Dr. Thapelo Matsheka, and the first after the 2019 general elections, was delivered to Parliament on the 4th of February 2020.

It has been well received by the labour unions, business community, and the public at large as well as international organisations such as the International Monetary Fund (IMF).

It mainly derived its support from key facets including, emphasis on changing the business-as-usual approach to development; outlining the transformation agenda; fiscal reform that minimizes the negative impact on economic development and human welfare, competiveness and the decision to implement the 2019 negotiated and agreed public sector.

The budget’s progress review shows that economic growth was consistent with the NDP 11 projections, with growth of around 4 percent. At this growth rate, the country would neither ascend to a high-income status nor reduce unemployment towards the Vision 2036 target of a single digit.

Simple calculations of this review confirm that the economy will need to grow the Vision 2036’s target of 6 percent over the next 16 years for per capita income to increase from around USD 8,000.00 to above USD 12,000.00 in current prices.

Further, the population is anticipated to grow by only 2 percent per annum.

For this reason, the focal areas for the forthcoming FY’s budget include measures to increase economic growth towards an average of 6 percent per annum.

Economic diversification is reportedly progressing fairly well. The report says, the share of the non-mining private sector in value added has risen to 66 percent in 2018 from to 63 percent in 2015.

The sectoral pattern of growth showed that the performance of services sector (particularly transport & communications, trade, hotels & restaurants, and finance & business services) has been the silver lining and that of mining sector was subdued whilst the utility sector disappointed.

The drive towards the service sector of the economy, especially to low-productivity activities (tourism, public administration, wholesaling and retailing) does not bode well for the country’s development aspirations.

In the previous versions of this Quarterly Review, it was noted that there is need for the rethinking of economic diversification. Since the country’s domestic market is small, it is inevitable that economic diversification not only focus on broadening the product mix, but also the composition of exports and markets.

This understanding of economic diversification has not been embraced by this year’s budget. Consequently, Botswana’s exports are still overwhelmingly diamonds, which means that the rest of economic sectors are still highly dependent on foreign-exchange earnings from diamonds. Thus, “the transformation programme requires a review of the country’s entire ecosystem”.

The budget review of the economic context also depicts that an economy with positive medium-term prospects, with growth expected to recover to 4.4 percent in 2020 from the expected growth of 36 percent in 2019 largely due to faster growth of services sectors and, thereafter, to slow-down to 4 percent in 2021.

These projected growth rates are comparable to those of the IMF staff’s baseline scenario of 4.2 percent in 2020 and 4 percent in 2021. Thus, the business-as-usual scenario produces growth rates that are still too low to achieve Botswana’s development objectives and create enough jobs to absorb the new entrants into the labour market.

Trade tensions between the two major markets for diamond exports, viz., the United States of America and China, is one of the factors that are cited as contributing to, indeed, undermining not only the domestic growth, but also the fiscal position.

Another notable downside risk to both global and domestic growth is outbreak of the coronavirus in China around January 2020. This has been declared as a global health emergency. In an attempt to contain the spread of the novel coronavirus pneumonia, the Chinese authorities have ordered city lockdowns and extended holidays, of course, at the expense of near- term economic growth, according to the new Stanbic Bank Botswana report.

According to Nomura Holdings Inc., fewer migrant workers returned for work than in previous years and business activities have been slow to pick up. The havoc wreaked by the virus on the world’s second largest economy is likely to spill over to the global economy. In fact, it has resulted in a glut in crude oil and, thereby placed oil markets into a contango, i.e., a market structure where near-term prices trade at a discount to future contracts.

It also presents significant risks one of Botswana’s main drivers of economic growth, diversification and foreign exchange earnings. According to the Financial Times (February 13, 2020), Chinese tourists spent $130 billion overseas in 2018. Regardless of whether the growth materializes, the projected domestic growth rate would not transform the economy to a high-income one.

Progress towards reduction of unemployment, to a target of single digit, and poverty and achieving inclusive growth has also been relatively slow, the Stanbic Bank Botswana Review says.

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OP leases Orapa House

21st September 2020
Orapa House

Ministry of Presidential Affairs, Governance and Public Administration (MOPAGPA) has through the Office of the President (OP) proposed to avail Orapa House for use by private training institutions as well as research institutions involved in the area of technology development.

For a very long time the monumental building located in the heart of the city has been a white elephant, despite government purchasing it for nearly P80 million from De Beers in 2012.

However, government has now identified a productive use for the iconic building. “The overall vision is for the building to be transformed into a hub for digital technology research and development to be carried-out by institutions, such as; Limkokwing University, BIUST, BITRI and other relevant stakeholders.”

The decision was taken as government traverse a new path of transforming the economy from a mineral led economy to a knowledge based economy through the promotion of research and innovation. However, the facility will need major maintenance to be carried-out in order to meet the requirements of the proposed change in use.

“The work will include provision of laboratories, work stations, production areas and seminar rooms; audio visual centre, high speed internet connectivity, exhibition areas and offices,” reads the proposal note for the development.

These developments will be done through the refurbishment and maintenance of the main building, workshop, and ablution block, gate house, parking area, grounds, and access control and security service.

“There will be minimal modifications to the structure as it stands. The project is estimated to cost approximately P50, 000, 000,” says the report. In this regard, it is said, the initial scope of the OP facility will be modified to accommodate the envisaged digital technology research and development hub.

With funds needed to improve the building, OP has requested that; “the 2020/21 annual budget provision for Orapa House will need to be increased by P37,500,000 from P2,500,000 to P40,000,000 to kick start the maintenance works.” Funds will be sourced from the projects that have been delayed due to Covid-19 protocols during the 2020/21 financial year.

The building has been a thorny issue for government for years. Initially, OP was expected to move there but the move never materialised. At one point it was a question of whether the Office of the President and the Ministry of Finance and Economic Development were planning to override a decision by Parliament which rejected the proposal to buy Orapa House under the belief that government may be buying its own property. The building was to be bought at a negotiated cost of P79 million.

Again in 2012, Government had wanted to buy Orapa House for a negotiated P79m but the Finance and Estimates Committee of Parliament had rejected the request because of the inconsistencies realised in the supporting documents of the proposed procurement. The valuation of the building was put at P74 million.

The Ministry of Lands and Housing had initially offered De Beers P73, 000,000 as the purchase price. However, De Beers countered with P85, 000,000. On negotiation and converging of the minds, the selling price was finally agreed at P79, 000,000.

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Sad state of Brigades: dumped and ignored!

21st September 2020
Brigades

Auditor General, Pulane Letebele, has expressed discontentment at the worrying and deteriorating state of brigades in the country.

In an audit inspection which was carried out at Tshwaragano Brigade in Gabane, a number of observations showed weaknesses and shortcomings in the conduct of the financial affairs of the institution.

According to Letebele’s report, former students of the brigade had been engaged to carry out maintenance works on the school premises, comprising of painting, tiling, plumbing and electrical works, which covered the period from July 2017 to June 2018.

Although the agreed maintenance period had elapsed, the works had not been completed because of unavailability of funds and this situation had persisted up till the time of inspection in November 2019.

Auditor General says arrangements should have been made in time for funds to be available to complete these relatively minor works even before the works commenced.

Various contractors had been engaged for clearing the bush and for the supply of concrete stones, pit and river sand and hiring equipment for digging the trench towards the construction of an auto mechanics workshop, the report said.

It stated that the cost of services and supplies provided totalled P117 949.80. However, despite the services and the supplies having been paid for, the construction works had not commenced for a long period afterwards, resulting in the trench filling back in.

The audit inquiries had not elicited satisfactory responses as both the institution and the Ministry had not accepted the responsibility for the project, although orders for the provision for the supplies had been made. For their part, the Ministry had stated that they had sub warranted funds for the purchase of porta cabins.

Letebele indicated that it is therefore confusing that a project which is critical to the functioning of an institution such as this one would commence without a well-defined plan.

Furthermore, the accounting and maintenance of records for the supplies items were not of the standard prescribed by the Supplies Regulations and Procedures in that the supplies ledger cards, the main accounting records for Government assets, were not properly maintained for the recording of receipts and issues.

This had resulted in significant discrepancies between physical and ledger balances, while in other instances the supplies items had not been recorded at all.

The report says 24 of the 91 new computers found in the computer laboratory at Kumakwane ABC campus were not recorded anywhere, as were the other computers in the storeroom which could not be counted due to the disorderly storage conditions.

The institution had entered into a contract agreement with a security company for the provision of security services at Tshwaragano Brigade, ABC and Horticulture campuses at Kumakwane for a 2-year period which ended in June 2018, WeekendPost learnt.

After the contract expired in June 2018, an extension was granted till the 30th September 2018. Since then, there has been no security service coverage for the institution to-date. According to Auditor General, in the face of prevailing crimes, it is of paramount importance that government properties be protected by provision of security services at all times.

At Tlokweng Brigade, it was noted that the kitchen staff were working under difficult conditions as the kitchen facilities and equipment, such as the cold room, tilting pot, food warmers and solar power for hot water were dysfunctional. The kitchen roof was leaking and men’s restrooms was not working. All these need to be brought to a reasonable and functional state of repair.

The kitchen staff should use a purpose-designed Rations Ledger for the recording of receipts and issues of foodstuffs to reflect the usage of those items. As far back as 2014 the Department of Buildings and Engineering Services had found that the house occupied by the bursar was uninhabitable on account of structural defects, the report said.

A site visit during the audit had established that the house was indeed unfit for occupation as there were cracks on the walls, power switches were not working and the roof was leaking. On a sadder note, there were a number of finished items of clothing, such as dresses, shirts, and jackets from students’ practical exercises from the Fashion Design Textiles Workshop.

Auditor General shared her take on this, saying: “I have not been able to ascertain the policy on the disposal of products from these practicals. A trace of 103 green acid-proof overalls which had been purchased in August 2018 had indicated that there was no record of these items having been recorded or issued, nor were they available in stock. I was not able to obtain any explanation for this situation.”

Kgatleng brigade was also audited and inspected by Auditor General who observed that the brigade has 26 institutional houses at Bokaa, both old campus and new campus. Some of these houses are very old and dilapidated, with two declared uninhabitable. The condition of the houses is a clear indication of lack of care and maintenance of these properties.

At the time of the audit, there was no contractor engaged for the provision of security guard services at the new campus, after expiry of the previous one in July 2019.  It is hoped that steps would be taken to safeguard the security of the premises and government properties against any acts of hooliganism.

In August 2019, there was a break-in at the electrical and at the plumbing maintenance workshops and a number of high value items, such as drilling machines, bolt cutters, spanners and cables, were stolen. The break-in and theft were reported to the police.

“However, at the time of writing this report I was not aware of the outcome of the police investigation, nor of any loss report submitted in terms of the Supplies Regulations and Procedures,” Letebele said.

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