KMAL Board room wrangle and Affirmative Action

The discussion on Affirmative action and Kingdom Meikles Africa boardroom battle has drawn widespread comments from unlikely sources. It should be noted that whole affirmative Action agenda should be about leveling the playing business and opportunities fields and not the grabbing of assets or victimization of one racial group. The concept is noble but can easily be corrupted and abused in the absence of proper and clear guiding principles. It appears as Zimbabweans we have failed to come up with clear principles, guidelines and legal framework to make the process more credible and successful. Such principles, guidelines and legal framework must be incorporated into a wider national vision geared towards building a stronger economy and uplift citizens' standards of living

Whilst the Affirmative action needs to be viewed beyond personalities at times real life case studies have to be highlighted to illustrate the challenges faced by black business people . As intended beneficiaries of the Affirmative action programme in Zimbabwe, black business people need to come up with generally acceptable standards of doing business including conflict resolution and lobbying. The lack of generally acceptable standards has led a perception of associating most if not all black businesspeople being painted with the same brush and being labeled corporate hooligans. In business perception counts for a lot and there is clear need to counter this perception in deeds and in words.

Zimbabwe has very few successful black business people who can be role models and mentors to those aspiring to go into business. For that reason, those who have succeeded have to set the right standards of conducting business since high expectations are on them.

Postcolonial stage values are needed in the same way the colonial system was underpinned by its own values and principles that served to advance the interests of the settlers who had a clear vision of creating a nation based on certain values, expectations and ideals. It is not exactly wise to just blame the colonial set-up when there is no direct, focused and committed effort to build a national vision designed to ensure that exploitation of resources and opportunities results in general enlistment of the citizenry not just a few well-connected individuals masquerading in various shapes and forms.

Zimbabwe's business landscape is widely constructed by various Business factions, which are very polarized to a similar extent that exists on the political front as in ZANU PF factions and polarization between ZANU and MDC. The Zimbabwe business scene is full of accusations and counter accusations of business people alleging they were victimized or arrested because of a rival businessperson. A disturbing trend is any Zimbabwean business of note has once been arrested or been a target of arrest for one point or the other. This needs to stop. The Zimbabwe business community needs to work as a team to address this tragedy which is undermining national economic potential . The current Kingdom Meikles Africa Limited saga immediately comes to mind. Kingdom Meikles Africa Limited was hailed as a successful indigenization transaction that met the Government’s 51 % local ownership law.

It is undeniable there is a conflict between shareholders/executives which has spilled to the courts and the Police head quarters. Having been following these developments, I could not help but pick up various standards being applied to such an extent that the whole scheme of things undermines the Affirmative action agenda. In the KMAL saga it is reported that the KMAL CEO Mr. Chanakira has reported to the police that the Company chairman Mr John Moxon, must be arrested because of "externalization" (which is uniquely Zimbabwean crime).The report in itself may or may not have its merits. However, under normal corporate governance procedures such a report should be made by the firm's internal auditors, financial director or company secretary after investigations conclude that there is prejudice or laws have been broken.

Having read an article (http://zim2day.com/index.php?option=com_content&task=view&id=1336&Itemid=80) by Mr. Mutumwa Mawere in which allegations are made that Mr Mawere connived to have Mr. Chanakira arrested sometime in 2000 it is difficult to comprehend why Mr. Chanakira would want to have another businessperson , John Moxon arrested. Him having claimed to be a victim of alleged engineered arrest would not be expected to resort to using the ZANU-PF controlled state machinery to attempt to leverage and try to win a boardroom battle .A battle he can easily win squarely by making a solid case to other minority shareholders .

As background (to the arrest) Mr. Chanakira played a significant part in the disposal by Dr Daniel Shumba of his shares in TS Masiyiwa Holdings (Private) Limited (TSM), a company controlled by Mr. Strive Masiyiwa that was the controlling shareholder of Econet Wireless Holdings. Mr. Chanakira through Kingdom Stockbrokers (Private) Limited acted on behalf of Dr Shumba in the sale of his shares to NSSA. However, although Kingdom sold the shares to NSSA at a price of Z$4.25 per share, Shumba only received a price of Z$2 per share with the balance being pocketed by Kingdom. Dr Shumba discovered this anomaly only some time later leading to the arrest of Mr. Chanakira. The documents reviewed by GMRI Capital confirm that Kingdom admitted to prejudicing Dr Shumba and refunded him for the unjust enrichment. NSSA as well instituted legal action against Kingdom on the same transaction alleging that Kingdom had acted fraudulently and obtained a court order compelling Kingdom to make good to NSSA on the diverted income and shares.

GMRI Capital has confirmed that sometime in January 2004, Mr. Chanakira who has claimed that his troubles with the law was instigated by rival businesspersons including Mr. Mawere did try to reach out to Mr. Mawere. A meeting reportedly took place at Mr Chanakira‘s office. Mr. Mawere was surprised to find Minister Elliot Manyika in Mr. Chanakira's office. While the precise relationship between Minister Manyika and Mr. Chanakira is not known it is astonishing that a person like Mr. Chanakira who has acquired a reputation as a victim of ZANU-PF will end up inviting a senior member of the party to such a business meeting.

The relationship between Mr. Chanakira and Minister Manyika is somewhat puzzling let alone the mere fact that Mr. Chanakira would find it fit to involve Minister Manyika in his business interests. The mere fact that Minister Manyika sought to involve himself in Mr. Chanakira's affairs must be worrying. Former Attorney General, Gula Ndebele, was fired by President Mugabe for meeting with an accused Mr. James Mushore who was later acquitted but nothing much has been reported about the alleged criminal aspect of Mr. Chanakira's case raising suspicion about selective application of the law. This is how the Affirmative action program is undermined and end up being ridiculed even though it is a noble and progressive concept .

Inspiration plays a large role in business development. Leading business people like Mr. Chanakira have provided a good example to many would be entrepreneurs and they are really role models to many. Were it not for the KMAL boardroom battles we would not care about evaluating Mr. Chanakira's background and his effort to have Mr. Moxon arrested. We all have our own views on Mr. Moxon and the colonial baggage he represents but it is high time that we reflect on the dangers of using indigenization for personal and opportunistic purposes which may cause long term reputation damage to the Affirmative Action program.

As Zimbabwe seeks to create a more equitable business environment the grey areas need clarification. This will go a long way in confidence building and in attracting foreign investment. Foreign investors need to know that there is a clear affirmative action programme in place and that programme has clear rules and principles and the rules are not selectively applied. The perception that those who have direct access to politicians can easily subvert the goals and principles of affirmative action defeats the whole purpose of the programme.

The rule of law and corporate law must at all times be central in how business is conducted .This will go a long way in creating a true class of unquestionable role -models who can inspire other generations whilst simultaneously creating a value system that will safe guard the gains of affirmative action programme.

Real life experiences should teach us to build strong systems, which can outlive the founders and be bedrock for future generations’ prosperity. A haphazardly implemented affirmative action program will likely end up being a get-rich-scheme for a few who are acting in the name of the program. The lack of clear national vision and targets results in anger being regrettably vented out on other ethnic groups who were better organized and more focused. Affirmative action without principles and values is a hollow strategy which will result in economic stagnation and frustrations.

Gilbert Muponda is a Zimbabwe-born entrepreneur. This article appears courtesy of GMRI Capital. He can be contacted at gilbert@gmricapital.com. More articles at www.gmricapital.com