Mergers, Acquisitions and Financial Results

Telecel Zimbabwe was yesterday fined USD374.2 million, the Zimbabwe equivalent of the hard currency involved, by a Harare regional court for illegally dealing in foreign currency.

Telecel, represented by Anthony Carter in his capacity as a director of the cellular telephone service provider, becomes the latest company to be convicted of contravening the Exchange Control Act.

A number of Bulawayo companies were this week fined millions of dollars for illegally dealing in foreign currency.

Telecel was convicted on its own plea of guilt by regional magistrate Virginia Sithole on three counts of illegally dealing in foreign currency amounting to USD1.3 million, R1.,3 million and over 22,000 British pounds. Sithole fined Telecel on each count to a sum equal to the value of the foreign currency involved. The total fine added up to USD$374,251,198.

Soon after the sentence was handed down, Telecel’s lawyer, Advocate Chris Andersen, asked the court to grant the company time to pay the fine. Sithole said Telecel should have deposited the fine with the clerk of court by April 16 and if it defaulted, a warrant of execution of its property would be issued against the company.

Earlier, Adv Andersen had asked the court to reconsider the issue of special circumstances.

Adv Andersen said the court should again take into account the circumstances which led Telecel into dealing on the parallel market.

He said the situation had been caused by the State which cast a blind eye on the parallel market and also benefited heavily through revenue in the sum of ZD1 billion a month, which was being paid by Telecel.

"The State benefited the sum of ZD24 billion and after this is now asking for a mandatory sentence to be imposed. How can this be justified?" asked Adv Andersen.

He submitted that Telecel’s dealings on the parallel market were not because it was not aware of the law but arose from the shortage of foreign currency. The Zimbabwe Electricity Supply Authority, Air Zimbabwe, the National Oil Company of Zimbabwe and even the Reserve Bank of Zimbabwe had been obtaining foreign currency on the parallel market, he said.

People would have lost their jobs and there would have been all sorts of problems if companies had not obtained foreign currency from the parallel market.

Adv Andersen said the punishment meted out on all companies which dealt on the parallel market must be equal. He questioned the court how it could be moral to impose a mandatory sentence on Telecel while Noczim, Zesa and many other companies in both the public and private sectors were not being prosecuted.

The Herald