South Africa’s banking giant Absa has been roped into Zimbabwe’s biggest media scandal in 25 years, which erupted last week with revelations that the country’s state security agency had taken over three mainly private newspapers.
Absa was dragged into the rumpus after disclosures that Zimbabwe’s central bank governor, Gideon Gono, was instrumental in helping the Central Intelligence Organisation (CIO) take over the Financial Gazette and Mirror Newspapers Group titles, the Daily Mirror and Sunday Mirror through the use of front companies.
Absa has a controlling shareholding in the Commercial Bank of Zimbabwe (now Jewel Bank), of which Gono was CEO at the time of the takeovers. Absa also played a significant operational role in Jewel — raising the question of whether it was unaware of Gono’s manoeuvrings.
On Thursday morning, Absa African division head, Dana Botha, said his bank had “board representation at the Commercial Bank of Zimbabwe [CBZ], but did not have management and operational control”.
Botha referred further questions to CBZ CEO Nyasha Makuvise, based in Harare.
The takeovers further shrank Zimbabwe’s small but vocal private media. After the closure of the Daily News, Daily News on Sunday (in 2003), The Tribune (2004) and the Weekly Times (2005), only two locally based and national independent papers remain: the Zimbabwe Independent and the Standard.
At company level, the newspapers concerned have not denied the story although their editors-in-chief have been scrambling to refute the reports.
Absa has the largest shareholding in Jewel Bank, with 26%, while the Zimbabwean government has 17%. The South African banking group has posted senior managers to Jewel Bank to take care of its interests, although the CEO and MD are Zimbabwean.
Former owner and publisher of the Financial Gazette, Elias Rusike, said this week Gono gave the paper’s former editor-in-chief, Francis Mdlongwa, and his consortium, Octadew, Z$200-million (about $1,6-million) to buy the publication.
“The money (to Mdlongwa) was lent with no questions asked and without any agreement on when it would be paid back,” Rusike said. “A few months later, Mdlongwa was asked to repay the money immediately and, obviously, he couldn’t.”
When Mdlongwa could not repay, Gono took over the Financial Gazette on behalf of the CIO. He also facilitated the intelligence agency’s coup at the Mirror newspapers, which were heavily indebted to his bank. The CIO has a 70% stake in the group.
Banks generally do not lend money without a signed agreement, collateral security and other guarantees. But Gono was understood to have handed Mdlongwa the money without any of these.
Gono said at the time he was not the owner of the paper, only a “financial adviser”.
Gono has had dealings with the CIO in the past. In 2002, he helped the agency buy indelible ink for the disputed presidential election when the Zimbabwean government could not raise a mere $500 000 for the purpose.
Gono told the Zimbabwe High Court in June, when he appeared as a state witness in former Finance Minister Chris Kuruneri’s corruption trial, that the ex-minister had saved the country from a “national disaster” by giving CBZ $500 000 — which was later transferred to a South African bank as R5,2-million — in 2002. It was later established that he was referring to the possibility of an election disaster because of a lack of ink.
Gono, who is widely thought to be President Robert Mugabe’s personal banker, was also involved in facilitating CIO payments to controversial Canadian lobbyist Ari Ben Menashe, who was assigned to entrap Zimbabwe’s main opposition leader, Morgan Tsvangirai, in a bogus plot to assassinate Mugabe.
Although Financial Gazette editor-in-chief Sunsleey Chamunorwa vaguely suggested in a long-winded denial this week that Gono was the owner of the paper, he did not name him. He claimed the story was a result of an “undeclared media war” going on in Zimbabwe.
Official denial
Chamunorwa wrote an opinion piece, which he wanted to pass off as an official denial of the story, after failing to secure Gono’s support, and that of his board, for a company statement.
The Mirror group has also not denied that it is owned by the CIO. However, its CEO and editor-in-chief, Ibbo Mandaza told SAfm and Voice of America this week that he was the sole owner of the Mirror newspapers — while failing to produce evidence.
He did not deny that CIO officers were working in his newsrooms, saying it was not possible to know this.
Mandaza said he had launched an internal investigation. If this revealed the presence of intelligence agents, he would ask authorities to withdraw them.
The government has remained mum on the furore. Former Intelligence Minister Nicholas Goche, under whose charge the newspaper scandal occurred between October 2001 and November 2002, refused to comment.
Zimbabwe’s acting Information Minister, Chen Chimutengwende, said: “I’m not sure what the situation is.”
CBZ was formed in 1995 after the collapse of the Bank of Credit and Commercial International (BCCI) and its Zimbabwean branch in 1991.
A report by the United States congressional committee led by Senator John Kerry, which probed the $20-billion bank collapse, reportedly claimed that Zimbabwean President Robert Mugabe was one of the African leaders paid money by the bank in return for political favours.