Indigenisation and Economic Empowerment minister Savior Kasukuwere says the government is keen to have RioZim back on its feet, but expects the company to respect the laws of the country.
Early this week RioZim was forced to publish extra details after the Securities Commission of Zimbabwe (SCZ) demanded information regarding its proposed investors GEM Raintree.
The company was seeking approval from shareholders to raise $55 million through a $10 million private placement, $5 million rights issue and $45 million through convertible debentures to Maurius-based GEM Raintree.
But the deal had met opposition following claims GEM Raintree was not an indigenous company. Kasukuwere said the deal must be subjected to the normal processes.
“Raintree and Gem, I think it’s a merger. We have not seen their papers that this company is now merged to buy this asset,” he said.
“I haven’t seen their papers. We did approve Raintree as an indigenous entity.
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“We have to be clear that fronting is a crime. “Some of the guys who are playing with fronting for foreigners will one day have to pay for unsavoury relationships.
“We must respect the laws of the country,” he said. RioZim in its statement said Raintree Mining (Pvt) Ltd was a Zimbabwean mining company, locally owned and compliant with requirements of the country’s Indigenisation Act.
“Raintree is a junior miner, looking at exploration, resource establishment and verification and long-term feasibility studies, underpinned by early tactical production,” Riozim Ltd said in statement.
The company said Raintree was founded in 2010 by Troy Travlos and Tafadzwa Chigumbu and the company had interests in gold and coal mining.
RioZim owes several banks close to $50 million including Infrastructure Development Bank of Zimbabwe, Metropolitan Bank, BancABC, ZB Bank and others.