Thursday, March 07, 2013

(NEWZIMBABWE) Unkie Mine payment blow for Brainworks

Unkie Mine payment blow for Brainworks
07/03/2013 00:00:00
by Staff Reporter

BRAINWORKS Capital has suffered a new payment blow after Anglo American Platinum (Amplats) refused to pay the Harare firm some US$3 million in agency fees for work related to the platinum producer’s Unki Mine indigenisation plan.

Amplats has since agreed to transfer to locals 51 percent shareholding in its Shurugwi-based Unki Mine in line with the country’s indigenisation legislation but the world’s biggest platinum producer refused to pay costs incurred by the National Indigenisation and Economic Empowerment Board (Nieeb) over the deal.

Brainworks acted as advisors on the $284 million transaction but in letters seen by the Daily News the Nieeb forwarded the US$3 million invoice for the services to Unki in yet another farcical turn for the country’s indigenisation programme.

“Further my letter of 20th December 2012 and our subsequent telephone conversations regarding the above subject, I now write to formally submit to your company the final tax invoice for US$3,275,200 raised by our financial advisors, Brainworks Capital Management Company (Private) Limited, representing advisory fees for the provision of advisory services to the government of Zimbabwe and the Nieeb,” Nieeb chief executive Wellington Zengeza wrote in his letter to Unki.

“As explained in our previous telephone discussion, the submission of the invoice to your company for payment is in line with our principals' directive that advisory charges incurred by Nieeb and the government in the execution of indigenisation transactions will be paid by the companies that are indigenizing in pursuance of the lndigenisation and Economic Empowerment legislation.

However Unki refused to pay the fee, reminding the Nieeb that the advisors were engaged by and provided their services on behalf of the Board and the Zimbabwe government.

“This matter has been discussed internally and I regret to advise that these costs cannot be for Unki's account. Brainworks Capital was not contracted by Unki as its advisors. Neither was the scope of works to be carried out nor fees to be charged agreed upfront,” Unki’s chief financial officer Collin Chibafa said in response.

The revelations come after Zimplats, the country’s leading platinum miner, also refused to pay about US$17 million in agency fees to Brainworks for its indigenisation compliance plan.

Zimplats, majority-owned by South Africa-based Impala Platinum Mines, also said Brainworks was engaged by and provided its services on to Nieed which should therefore pay the firm’s fees.

Brainworks also acted as advisors in the compliance agreements for Canada-based Caledonia Mining and South Africa’s Pretoria Portland Cement.

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