(HERALD) Knives out for Jayesh Shah as RFHL saga gets nastyhttp://www.zimpapers.co.zw/index.php?option=com_content&view=article&id=3427:knives-out-for

Tuesday, May 31, 2011

(HERALD) Knives out for Jayesh Shah as RFHL saga gets nastyhttp://www.zimpapers.co.zw/index.php?option=com_content&view=article&id=3427:knives-out-for

Knives out for Jayesh Shah as RFHL saga gets nasty
Sunday, 29 May 2011 00:19 Top Stories
Sunday Mail Reporter

THE Renaissance saga has taken a dangerous twist following revelations that there are clandestine efforts to have businessman Mr Jayesh Shah deported or arrested in a bid to silence him while reports are emerging that Finance Minister Tendai Biti could have taken the decision to bail out the bank using NSSA funds before he brought the issue to the Council of Ministers and Cabinet.

It has also emerged that Econet Wireless Zimbabwe Limited, which has an 11 percent shareholding in RTG and 22 percent in Afre, which falls under Renaissance Financial Holdings Limited (RFHL), was so incensed by Minister Biti’s “interventions” in the whole saga that it decided not to continue investing in the two companies.

On the other hand, there are startling revelations that the chairman of NSSA, Mr Innocent Chagonda, whose organisation has been approached by Minister Biti to invest about US$20 million into Renaissance Merchant Bank, was until recently a trustee in Bethel Trust, which owns about 36,88 percent shares in RFHL on behalf of the Timba family.

Ironically, Renaissance Merchant Bank was plunged into problems following the failure by the embattled Patterson Timba to repay a US$5 million loan that he had obtained from Mr Shah purportedly as a cash injection into the financial institution.

While the investigations by the Reserve Bank of Zimbabwe on Renaissance have not yet been made public, it is believed that they revealed very serious lapses bordering on the criminal.
Under RFHL, there are four business concerns, namely Renaissance Merchant Bank, Renaissance Securities Limited, Renaissance Capital Limited (based in Uganda) and the African Renaissance Corporation (Afre).

Impeccable sources in the Ministry of Home Affairs, who spoke on condition of anonymity, told The Sunday Mail last Friday that there were attempts to use the ministry to either deport or have Mr Shah arrested, but this was thwarted by the co-Minister of Home Affairs, Cde Kembo Mohadi.
“Attempts were made to have Shah deported or arrested on fraud charges, but we don’t know who would have been the complainant. Minister Mohadi got wind of the plan, seen by many as a way of trying to silence Shah, and he intervened. The ministry was divided on political lines on this matter, but Minister Mohadi prevailed,” said the source.

Between September 2009 and April 2010, Mr Timba and RFHL borrowed a total of US$10 million from Mr Shah and his companies.

Mr Timba borrowed a total of US$6,4 million from three companies — Alshams BVI Ltd, Iris Investments and Lord Shanidev Investments — that belong to Mr Shah while RFHL borrowed a total of US$5 million from the same companies.

While the Home Affairs source could not reveal the people who were working to have Mr Shah deported or arrested, last week Minister Biti said: “There are two particular loan sharks, one of Indian descent and one of British descent, that have unlawfully descended into our market and that are exposing our banking system to unacceptable usurious rates of interest.”

However, Mr Shah and British mogul Nicholas van Hoogstraten hit back describing Minister Biti as “foolish” saying no one forced Mr Timba and RFHL to borrow the money in the first place.

As the attacks on Minister Biti continued, the chairman of Econet Wireless Zimbabwe Limited Mr Tawanda Nyambirai wrote a scathing letter to the minister on May 13 expressing his company’s disgust at the way the Renaissance issue had been handled.

“I refer to our meeting of yesterday morning that we held at your directive…At the aforementioned meeting with you Minister, you indicated that an investor, the NSSA, had been found for Renaissance Financial Holdings Limited and that the investor did not want any rights offers in these companies until they are ready to inject capital in Renaissance Financial Holdings Limited . . .” said Mr Nyambirai.

If the meeting between Econet Wireless Zimbabwe Limited and the Minister was held in the morning of May 12 as indicated above, that means Mr Biti told Mr Nyambirai that NSSA would invest in Renaissance Merchant Bank before he took the matter before both the Council of Ministers and Cabinet.

Records show that Minister Biti brought the issue about NSSA bailing out Renaissance to the Council of Ministers on May 12 while the matter was brought before Cabinet on May 17.

Legal experts have queried why the parliamentary portfolio committees, especially the committee on budget and finance, are not taking Minister Biti to task over the Renaissance issue.

Mr Nyambirai said the suspension of Afre and RTG from trading at the instigation of Minister Biti was done unprocedurally.

“We have decided that the suspension of these two companies from trading without holding consultations with the directors of these two companies, or their management was duly intrusive and not in accordance with our expectations of how non government controlled public companies must be run. This has totally shattered our confidence in continuing to invest in these companies.

“In the circumstances we have decided to withdraw our appointees from the boards of these companies on the basis that your inventions have made it impossible for them to continue exercising their fiduciary duties as directors of public listed companies. They shall be tendering their resignations with immediate effect. We shall also proceed to sell all our interests these companies and will immediately start talking to interested buyers,” wrote Mr Nyambirai.

Analysts have questioned why Minister Biti is “neck deep” meddling in the affairs of a private bank instead of bailing parastatals that are struggling to survive.
Repeated efforts to contact Minister Biti were fruitless as he was said to be in several meetings last Friday while yesterday he was reported to have gone to South Africa.

As the Renaissance saga continue unfolding, The Sunday Mail has unearthed information that the NSSA chairman Mr Chagonda once served as a trustee in Bethel Trust, which owns 36.88 percent shares in RFHL on behalf of the Timba family.

Economists have voiced concern that there is a conflict of interest because NSSA is now being instructed to bail out Renaissance where Mr Chagonda was once a trustee.
“Obviously, Mr Chagonda has interests in these two entities that are about to go to bed together and I think there is conflict of interest on his part.

“From my point of view I think Renaissance with all that has been said about lack of corporate governance and incest, is an unsafe destination for anyone’s money. We will see what NSSA will come up with,” said one economist.

Mr Chagonda confirmed his connection to Bethel Trust saying: “I was a member of Bethel Trust for a number of years but I resigned some time ago. I resigned at the same time with Mr Chinake.”
Reports say Mr Chinake resigned from Bethel Trust on May 9 this year, leaving suspicion that Mr Chagonda may have been aware of the problems brewing at Renaissance Merchant Bank well before they were made pubic.

While Mr Chagonda’s connection with NSSA and Renaissance may now come into question, it is understood that President Mugabe had reservations when he was appointed as chairman of NSSA.

Presidential spokesperson, Cde George Charamba said:

“When the Minister responsible for NSSA, Ms Paurina Mpariwa was constituting the NSSA board, the President said he had no problems with the board per ser. However, he had reservations in respect of the proposed chairperson Chagonda stemming from Chagonda’s political role as it manifested itself during the GPA related negotiations.

“Chagonda was an advisor to one of the parties to the GPA and so the President was concerned that this political involvement would cloud his leadership of the board.
“However, Minister Mpariwa came back after consulting other members of his party, insisting that she had confidence in the chairperson.”-The Sunday Mail

Comments

0 # kenny 2011-05-29 08:12
your reporting is full of hearsay. There do not seem to be facts. So, has Econet sold its investment in RFHL? Did you expect biti to take the matter to cabinet and to the council of ministers without wide consultations first? Nssa has experienced people who will decided whether an investment into a project makes sense or not. And why would Shah remain in Zimbabwe if he is violating the country's laws? If he has not violated any laws, does he need ministerial protection to remain? The major setback on your article is that it seems like a smear campaign.
Reply

+1 # Jemedzo 2011-05-29 08:39
This reveals why our banking sector is failing to come up with financial progames that can assist in turning around our economy. I think its time the governement and RBZ investigate the Treasury departments of all banks. I am pretty sure we might end up with abscondees and our President will know who are the subotuers of this country.
There is no banking going on in this country but chimbadzo and unfair enrichment among those we are calling business people.
Reply

0 # Bob Marimatombo 2011-05-29 10:56
Minister Biti is not qualified to be in the position he is, we hope that drastic measures are taken and he resigns immidiately.
Reply

-1 # Never Ever 2011-05-29 15:50
Ana Biti ava itsaona for Zimbabwe. What is it that they have come up with that is good for Zimbabwe. First he was fighting to surrender Zim's sovereignty to IMF when he wanted Zim declared a Highly Indebted Poor Country, without regarding the devil in the detail, just like No Fly Zone in Libya which war experts say mean a declaration of war. Then Biti decided to lock under his key Zim's IMF drawing rights at a time farmers needed support and inputs, so that our land reforms will turn to a joke.Mai Mujuru did well by putting him to order. MaMDC nevapambepfumi idraw draw 6 na 9.