Brainworks Capital Management Limited (Brainworks), the company at the centre of Zimbabwe's controversial indigenisation deals says government abandoned the implementation of the transactions almost two years ago.
Zimbabwe's indigenisation laws compels foreigners to cede 51 percent shareholding to locals. The deals were stopped after the Daily News exposed anomalies which would have seen government losing millions of dollars to a private company for "facilitating" the indigenisation deals.
George Manyere, Brainworks' chief executive told the Indigenisation and Economic Empowerment parliamentary portfolio committee that because the controversial deals did not sail through, they were not even paid a cent from government through the National Indigenisation and Economic Empowerment Board (Nieeb) or from the companies.
"In this particular case the transactions were abandoned, there was no success to them. In that context we just felt we also had to abandon the expenses we accumulated," said Manyere.
He noted that they had agreed a time based fee with Nieeb where they would be paid $500 an hour apart from up to two percent commission based on the value of every successful transaction.
"I would like to indicate to this committee that we never got paid either by the company that was indigenised or neither by Nieeb. We spent a year working on these transactions. With all the costs of travel, accommodation and time spend negotiating with various companies, we never got compensated," Manyere said.
According to Manyere, based on the term sheets agreed between Brainworks and Nieeb, they were charging between one up to two percent depending on the size of the transaction value.
He revealed that Zimplats' indigenisation deal was worth $971 million, Mimosa's deal was valued at $550 million, Unki Mine was $242 million and Blanket Mine was $18 million.
Based on the total value of the transactions if Brainworks were to charge an average of 1,5 percent fee on each transaction, the Newlands-based firm could have raked more than $26 million apart from the $500 per hour consultation fees.
Manyere admitted that Brainworks was handpicked by Nieeb, an agency under the Indigenisation ministry's ambit to act as a financial consultant for several indigenisation deals that later collapsed after the Daily News investigation.
Manyere said Nieeb did not owe them anything when the transactions were abandoned because their services could only be paid if the transactions had succeeded.
"It was at our discretion that we decided not to bill Nieeb. If we stick with the mandate letter that we signed with Nieeb, yes, we can quantify that amount in terms of time spent multiplied by $500. Our primary business is not to proffer services on a time- based fee and say we get $500 per hour.
"We do our work based on success and for us it was at our own discretion we felt that morally and particularly because of the client which we were offering our services, that is government, we took it upon ourselves that the fact that the transactions had been abandoned it was at our own discretion to forego the payment," Manyere said.
- dailynews
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