COMMENT - I don't like the sound of this loan facility at all. If Zimbabwe can export upto $1bn a month in diamonds, that is what they should get most or all of, and use than money to invest in the economy. It is slower than borrowing money, but you keep ownership and control all the way, which means the country will develop in the way you want it to, and not be foreign owned. As hesitant as I am to ascribe national interest to the MDC or minister Biti, this was the right thing to do.
Biti scuttled US$50bn loan deal — Mbudzi
Herald Reporter
Finance Minister Tendai Biti blocked the US$50 billion loan deal between Government and Norange Capital Markets because of his own political agenda, a key figure in the abortive negotiations has alleged.
Retired Major Kudzai Mbudzi yesterday confirmed to The Herald that he facilitated the talks but denied that the money was dirty and Norange wanted to launder it through Zimbabwe.
Sources familiar with Government’s workings also indicated that it was possible that bureaucratic manoeuvering could have been behind the deal’s stillbirth because under the proposal, Norange would give Government a non-repayable US$100 million grant with the option of accessing concessionary loans of up to US$50 billion.
Yesterday, Rtd Major Mbudzi said: "What Zimbabwe probably needs to know is that Norange Capital Markets is a highly diversified international company now based in Hong Kong, China, and also registered in Botswana.
"Its directors and advisory board consist predominantly of South African citizens."
He said the Mel Hua family, whose money backed the loan and grant proposal, had funded many governments and were engaged in several international humanitarian programmes throughout the world.
"This is why their headquarters is located at the United Nations in Geneva, Switzerland."
He said the money was in Malaysia’s central bank and would be routed to Zimbabwe through the US Federal Reserve system.
"Why would Interpol, the IMF and the World Bank be involved if these monies were dirty? Why didn’t Biti accept the verification process in the first place?"
Rtd Major Mbudzi said it appeared MDC-T did not want the money to come into Zimbabwe because such a huge injection would turn around the economy and "rubbish their politics of hunger".
"Every Zimbabwean knows that it is an engrained fear within Minister Biti’s quarters that if such huge financial packages are brought into Zimbabwe today, it will obviously weaken their political comparative competitiveness against their main political adversaries, in light of the much talked about general elections next year. The busting of sanctions, therefore, can never be part of his favoured agendas. So principally and practically, this is simply a case of the hidden agenda."
Rtd Major Mbudzi said the US$50 billion proposal they had in mind would be broken down as follows:
l US$13 billion was to retire internal and external debt
l US$20 billion for on-lending to industry through the banking system
l US$4,5 billion for civil servants’ salaries, allowances and the capacitating of Government service
l US$5 billion was for agriculture and mechanisation.
l US$7,5 billion was for infrastructure rehabilitation and development
Rtd Major Mbudzi said Norange had nothing to hide and invited anyone to make necessary checks with Interpol or any other organisation.
Labels: NORANGE CAPITAL MARKETS, TENDAI BITI
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Gvt turns down $50bn 'dirty' loan
By: TH-TZG
Posted: Wednesday, September 1, 2010 11:45 pm
GOVERNMENT has turned down a loan offer of up to US$50 billion from Norange Capital Markets of South Africa after security checks indicated the money could be “dirty”.
Government insiders yesterday told The Herald newspaper that the country’s security agencies had “reasonable suspicion” that the company might be seeking to “launder their money through Zimbabwe”.
According to the newspaper, "the proposed funding was divided into two categories — a non-repayable US$100 million grant and a loan of up to US$50 billion payable over 30 years" and "attracted a negotiable annual interest rate of up to 3 percent."
Secretary for Finance Mr Willard Manungo wrote to Norange president and chief executive General Hendrie Hattingh on August 12 this year advising him that the proposal was “unsustainable”.
The letter was copied to Chief Secretary to the President and Cabinet Dr Misheck Sibanda.
“Please be advised that Government has done a thorough appraisal of your proposal and has come to the conclusion that the proposal is unsustainable.
“We are thus unable to take up your offer,” read part of the letter.
Finance Minister Tendai Biti confirmed receipt of the proposal, but refused to shed more light on the issue.
However, sources familiar with the Norange proposal told The Herald this week that security verifications raised suspicion that the company might have wanted to “launder dirty money” through Zimbabwe.
“The issue was dealt with by the Presidency and it is suspected that these guys might be involved in money laundering and might have wanted to clean their money here,” an official who requested anonymity was quoted by The Herald.
Norange wrote to Minister Biti on May 31 this year saying it had contractually entered into an agreement with Mei Hua Family United Nations, the principal backer of its Global Funder, to advance a loan to Zimbabwe through the Reserve Bank of Zimbabwe.
The funds were to be allocated under what is called Programmes of Global Fund-505 Project of World Peace, whose main objectives are “working for a world free of war, poverty eradication and global green movement”.
Without revealing names of other potential beneficiaries, the company indicated that Zimbabwe was one of the first proposed recipients of the facility in the Asia-Pacific-Africa bloc.
According to the proposal, Zimbabwe would open a custodian account with the RBZ in the name of Norange Capital Markets for the investor to deposit a Safe Keeping Receipt to start funding procedures and link this to the main account of the Global Funder.
Minister Biti would assist in translating the SKR into liquid funds.
All the transactions were to be done between the Negara Bank of Malaysia and RBZ.
“Upon signing all protocols, the Reserve Bank of Zimbabwe will directly engage Dr Zeti Akhtar Aziz of the Bank of Negara, Malaysia, to carry out due diligence and verification of the funds exercise within the agreed time window,” proposed Norange.
“We will notify the International Monetary Fund, the World Bank, the FED (US Federal Reserve), (and) Interpol prior to and upon the verification procedure of the funds.”
Apart from a loan package, Norange also offered technical assistance to Government in capitalising and hedging of loans into international financial programmes to securitise the capital and interest.
This was an extra option independent to the funding proposal under a separate contract.
“We therefore approach you within the context of your drive to turn around the economy and for investment in Zimbabwe’s infrastructure and other opportunities for immediate facilitation of this process,” said Norange.
“Norange does support your objective of a 7,7 percent (economic) growth which was recently downgraded to 4,7 percent and is confident that this Global Fund has the potential to eradicate the debt of US$7,1 billion and ensure economic growth.
“Norange does not trade debt for assets. We require no security, assets or treasury collateral against funding.”
The company wanted tax concessions through enactment of a Statutory Instrument.
It requested authority to repatriate, for other investments outside Zimbabwe, its funds allocated without “undue restrictions and exchange control”.
In addition, it wanted permission to repatriate and remit 100 percent of dividends and interests from its investments in Zimbabwe free of any withholding tax and any other restrictions.
It wanted Government to exempt customs union and excise duty, value added tax and any other taxes on imported goods, vehicles of all types, factor inputs, plant and machinery.
It said it was aware of the Western sanctions on Zimbabwe but said these would not affect the deal because Norange had global immunity.
Labels: CORRUPTION, NORANGE CAPITAL MARKETS
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