HomeNewsIndia fires warning shots over Essar

India fires warning shots over Essar

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INDIAN ambassador to Zimbabwe, Jeiteendra Tripathi, has deplored the way the multi-million-dollar takeover of Ziscosteel by Essar Africa Holdings has been handled by the government.

Report by Feluna Nleya Staff Reporter

Tripathi told NewsDay on Tuesday that several prospective Indian investors had now resolved to hold on to their investments until the dust settled.

“They (Essar) planned to invest $4 billion in four years,” he said.

“There are some problems. There are some vested interests here in Zimbabwe who don’t want this deal to go through. I don’t know why they are projecting things in a very negative manner.”

Tripathi said some small companies were chickening out on deals with Zimbabwe as a result of the dishonesty exhibited in the Essar deal.

“There are many potential investors, but they are now scared,” he said.

“They say if this can happen to a deal signed between the sovereign government of Zimbabwe and a company, then what is the guarantee that if two smaller parties sign a deal they will honour it?

“What I am saying is there were six Cabinet meetings — and when the Cabinet decides and the President chairs the Cabinet, we think that due diligence has been done,” he said.

“If you are claiming now that the due diligence had not been done before that, then the fault is yours. It’s about a matter of principle.

“I am worried about this.

“I know that the intentions of the Zimbabwe government were right, but then it should not send wrong signals to the international investment forum. Otherwise when this thing is sorted out then we will see more Indian companies coming to invest.”

Mines minister Obert Mpofu and a few other government officials, including Deputy Prime Minister Arthur Mutambara, have moved to stop the Essar deal claiming due diligence was not done.

President Robert Mugabe had, however, officially declared the deal done amid pomp and ceremony at a function held at Zisco Steel earlier this year.

Govt sends wrong signal to foreign investors

“IF negotiations went on for two years and after that you settled on a company and signed a contract giving them the deal and the joint venture was inaugurated by the head of the country and the entire Cabinet endorsed it, it’s very strange that 17 months after, the company is yet to get the papers. If there was something wrong, it should have been rectified before.

“It gives a very negative signal in the international investment arena.

“People have started thinking, if a government can step back and delay the contract even after signing it for 17 months, then what will happen to other contracts?” Tripathi said.

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