The SMM matter has taken a new twist with the transfer of the control and management of the company to the Ministry of Mines and Mining Development which has in turn delegated the Zimbabwe Mining Development Corporation (ZMDC) to assume a role that is yet to be clearly articulated.
The Reconstruction Act has no provision for a handover of control of a company under administration to another body, implying that the only context in which the purported handover could take place is out of administration.
The status of SMM has not been clarified and Patrick Chinamasa simply needs to explain where the SMM Holdings Limited (SMMH) bearer share warrants are.
In terms of the Reconstruction Act, a reconstruction scheme can only be confirmed by a court with the consent of shareholders of the company. In the case of SMM, there is a dispute of fact as to who is the legitimate shareholder of SMM.
According to Chinamasa, the legitimate shareholder of SMM is the government of Zimbabwe (GOZ) through AMG Global Nominees Private Limited (AMG) and Nickdale Investments Private Limited (Nickdale).
He has represented without providing any proof that AMG acquired the entire shareholding of SMM’s parent, SMMH, and as a consequence, AMG approved the reconstruction scheme paving the way for the alleged conversion of funds purportedly provided by the Reserve Bank of Zimbabwe (RBZ) after the placement of SMM under reconstruction into equity.
It has been represented that Nickdale is a company beneficially owned by the RBZ.
Following Chinamasa’s version, it would appear that the proposed transfer would involve the sale of shares purportedly held by AMG and Nickdale to ZMDC.
The question that then arises is whether in truth and fact, AMG has any beneficial interest in SMMH.
This question was answered in the UK when the court ruled that AMG did not acquire any legitimate title, interest and rights to the SMMH shares.
NewsDay has it on record that the Parliamentary Portfolio Committee on Mines and Energy that has been holding hearings on the SMM matter has attempted in vain to obtain positive confirmation from both Chinamasa and Afaras Gwaradzimba regarding the ownership interest of the GOZ in SMMH.
What both Chinamasa and Gwaradzimba have sought to argue is that the recent Supreme Court judgment settled the SMM matter exhaustively.
However, the Supreme Court matter did not deal with the ownership issue.
If the GOZ did acquire through AMG the shares in AMG, why not produce the evidence to support this important factor in the resolution of this long-standing matter?
“There is no doubt that before ZMDC takes over this poisoned chalice it will have to undertake its own legal due diligence,” said one analyst.
“A real danger exists if the attempt to seize control of SMM through the back door succeeds. This means that the GOZ can very well use the same tactics and strategies to target an undesirable shareholder and subject him to the same treatment that Mutumwa Mawere has endured, only to end up with ZMDC being the beneficiary,” said one investor in the mining industry.
“The law that permitted Chinamasa to take over a private company is still in existence so is the Prevention of Corruption Act. Using the two instruments, there is no reason why anyone would feel safe,” said one legal analyst.
The story of the shares remains a mystery while the government continues to act as if this does not matter. Title to shares evidences ownership and right to property.