Did Biti and Goche connive to strip Air Zimbabwe of its assets?


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It looked like a simple and innocent transaction but it had deep undertones which no one has explained up to now.

On 26 March 2012, the Secretary for Transport Patson Mbiriri directed the Group Chief Executive of Air Zimbabwe Holdings to transfer its shareholding in National Handling Services to a nominee company wholly owned by the government.

He said that NHS would cease to be a subsidiary of Air Zimbabwe and dissolved its board of directors.

National Handling Services Private Limited (NHS) was formed by Air Zimbabwe and GHI of United Kingdom in 1999, according to its website.

It was incorporated on the 8th of September the same year, with the express aim of providing passenger and cargo handling at all operational airports in Zimbabwe.

Two months before Mbiriri’s letter, two trade unions representing Air Zimbabwe workers had filed an application with the High Court seeking that Air Zimbabwe Holdings and Air Zimbabwe be placed under provisional judicial management because they believed its collapse was due to mismanagement.

They did not want outright liquidation of the company because it owed the unions and their members, that is employees of Air Zimbabwe, US$35 415 731.80 in unpaid union dues and workers’ salaries for the period January 2009 to December 2011.

The trade unions were therefore shocked when they discovered that the government was trying to strip Air Zimbabwe of its assets before their case had been concluded. What incensed them more was the fact that NHS was the only profitable subsidiary of Air Zimbabwe.

The union filed an urgent application with the High Court to stop the transfer of Air Zimbabwe shares in NHS to a nominee company because the transfer would reduce Air Zimbabwe to a shell.

The government argued that it had acted lawfully and its action was aimed at restoring profitability of the national airline.

Judge Andrew Mutema, who heard the case, agreed with the trade unions saying that irreparable damage would be done if the transaction was not stopped pending the outcome of the other case.

He said that Air Zimbabwe’s planes were all grounded and were therefore not generating any revenue. If the government was allowed to dispose of assets belonging to Air Zimbabwe, the trade unions would lose out if they won their case because there would be no assets to provisionally judicially manage.

According to an analyst who has inside knowledge about the case, the NHS case was a typical example of what had gone wrong in Zimbabwe. The government’s argument that the action was aimed at restoring the profitability of Air Zimbabwe was very shallow because NHS was already profitable. There was therefore no need for Air Zimbabwe to transfer its shares from NHS to another government-owned company unless someone was going to make money from the transaction.

The analyst said although the case involved Transport Minister Nicholas Goche and his permanent secretary Mbiriri, there was no way such a major deal could have gone through without being approved by Finance Minister Tendai Biti.

“I actually think that Biti might have been the brains behind the deal and Goche was just at the forefront because he is the Minister of Transport,” the analyst said.

He said that contrary to what most people thought, Biti and Goche, though from different and at times warring parties, were close.

“People forget that Biti and Goche have been in the negotiating teams for almost a decade now. Obviously, they have grown to know each other. And business knows no politics,” the analyst said.

If Biti and Goche were in this together, the question that remains unanswered is: What was in it for them?

(21 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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