PARLIAMENT on Wednesday heard that local government minister Savior Kasukuwere arm-twisted mining companies into paying a financial advisory firm he is allegedly connected to, Brainworks Capital, huge sums of money “for no services at all”.
The parliamentary portfolio committee on youth and indigenisation chaired by Gokwe-Nembudziya MP Justice Mayor Wadyajena heard from three companies that Brainworks had been “thrust upon them” by Kasukuwere during his time as minister of youth and indigenisation.
Appearing before the committee Zimplats, Unki and Blanket mine officials said they were asked by Kasukuwere to pay Brainworks varying amounts despite the fact that they had not entered into any agreements with the company.
Anglo-American Corporation’s Unki Mine chief finance officer Collins Chibafa told the committee that the company had received a “request” in January 2013 to pay Brainworks $3,2 million “for advisory services” ostensibly rendered to government by the company.
Chibafa said the company however, resisted the directive arguing that the basis for the payment would not meet their “rigorous” governance procedures.
“Our response was that we did not understand why we were supposed to pay the money given that we had not entered into any contract with Brainworks and we did not appoint the firm to do consultancy for us.
“It was Nieeb which they were dealing with and we felt it was their responsibility to pay for the services,” said Chibafa.
Zimplats legal secretary Garikai Vera said they had been billed by Brainworks to pay although they had no contract with the company but had only met its officials “during discussions with the National Indigenisation and Economic Empowerment Board (Nieeb)”.
“I am not sure why we were asked to pay about $16 million as we never had any contract with them but we received a letter on which an invoice was attached,” said Vera.
This prompted Wadyajena, in agreement with other committee members, to direct the officials back to prepare for reappearance with “all the documents we asked for”.
However, Blanket Mine CEO Steve Curtis said his company had been satisfied with the explanation from Nieeb officials regarding the role of Brainworks and agreed to pay.
“As an advisor it was helpful in communicating the commercial aspect of the transactions. For us it was nothing unusual; that these were complicated negotiations that were protracted and we saw value in their input,” said Curtis.
Wadyajena quizzed Curtis on who had introduced Brainworks to Blanket to which he responded “we had 90% of our dealings with minister Kasukuwere and I would want to think it was in one of the meetings that they were introduced”.
“We were not shocked because it was normal, people were coming and going. They came from different government departments,” he said, adding his company had paid a total of $250,000.
“Blanket Mine did pay Brainworks as a banking transaction. We were comfortable that the fee was reasonable because it worked out to be less than 1% and based on our experience that was justified given the fact that they came towards the end of the negotiation,” said Curtis.
Blanket Mine, according to Curtis later engaged Brainworks to “assist us with finding out other areas of investment that could be available to us”.
“We had engaged a local businessman who we later took on as a shareholder along with others as a consortium,” said Curtis.
Curtis revealed that his company paid on behalf of Nieeb because they wanted “to speed up the indigenisation process and because these partners did not have money on hand”.
“We were not unhappy with the payment because we felt it was worth it. We understood that Nieeb did not have money yet we wanted the process of indigenisation which was proving to be complicated to go through.
The benefits of having the company indigenised were worth the payment,” said Curtis.