Friday, September 18, 2009

Zimbabwe Takes Over Supermarket, Hotel Chain Meikles

By Brian Latham
Sept. 18 (Bloomberg) -- Zimbabwe’s government has ordered that Kingdom Meikles Africa Ltd., which owns the country’s biggest supermarket chain and best-known hotel, be placed under state administration, a lawyer for the company said.
Kingdom Meikles and its associates -- the Tanganda Tea Co., Thomas Meikle Centre Ltd. and Murlis Investments Ltd. -- have been “specified” under Zimbabwe’s anti-corruption laws, which allows them to be placed under administration, according to a government decree made on Sept. 11, Sternford Moyo, a lawyer for Meikles, said in an interview from the country’s capital today. The order is illegal, he said.
“The specification of these entities is null and void,” Moyo said. “The joint ministers of home affairs aren’t legally entitled to specify anyone or any company.”
On Sept. 16 President Robert Mugabe told foreign investors at a mining conference in Harare that the country respected property rights and the rule of law. Mugabe began a program of seizing white-owned commercial farms for redistribution to black subsistence farmers and has repeatedly threatened to nationalize mines. Zimbabwe is seeking foreign investment to help it recover from a decade long-recession that ended this year.
The companies are accused of “externalizing foreign funds,” Zimbabwe’s state-controlled Herald newspaper reported Sept. 15.
“This is a disaster for a country that is trying to attract foreign investment,” Gilbert Muponda, an independent investment analyst, said by e-mail today. “After this asset seizure it is now clear that Zimbabwe remains a high risk investment destination and investors could easily lose serious amounts of money.”
Kembo Mohadi and Giles Mutsekwa, the co-ministers of home affairs, didn’t answer calls to their mobile phones today.
In February Mugabe and Morgan Tsvangirai, the former opposition leader, set up a coalition government after intervention by the Southern African Development Community of neighboring states to end a 10-year political crisis.
Mohadi is a member of Mugabe’s Zimbabwe African National Union-Patriotic Front while Mutsekwa belongs to Tsvangirai’s Movement for Democratic Change.
Under Zimbabwean law, “specified” companies must be administered by a government appointed official.
The MDC condemned the specification as a “mafia style grab of assets which erodes all hope’’ of attracting investment, the party said in an e-mailed statement.
Calls to Kingdom Meikles weren’t immediately answered today. Calls to John Moxon, Meikles’ biggest shareholder, similarly weren’t answered. On Sept. 15 the Meikles asked for trade in its shares on the Zimbabwe Stock Exchange to be suspended without giving a reason.
Kingdom Meikles owns the TM supermarket chain in Zimbabwe and the Meikles hotel in Zimbabwe. It has a market value of $90 million. Tanganda is the country’s biggest tea producer.
Johannesburg-based Moneyweb, an Internet news site, reported the action earlier.
To contact the reporter on this story: Brian Latham in Durban at Last Updated: September 18, 2009 03:52 EDT

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