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Lloyd Gumbo Senior Reporter
Members of Parliament have raised concern over the appointment of Brainworks Capital to provide consultancy service to the National Indigenisation and Economic Empowerment Board in billion dollar projects without going to tender.

The firm was contracted by NIEEB to provide advisory services in the indigenisation of various mining giants among them Zimplats, Unki, Mimosa and Blanket Mine.

The consultancy firm charged up to two percent of the total share value, which could have seen it paid millions of dollars if its advice had been taken on board.

MPs raised the concerns when Brainworks Capital management led by chief executive officer, Mr George Manyere, appeared before the Parliamentary Portfolio Committee on Indigenisation and Economic Empowerment.

Zanu-PF MP for Gokwe-Nembudziya Cde Justice Mayor Wadyajena chairs the committee.

Cdes Wadyajena and Melody Dziva (Zanu-PF) asked how Brainworks Capital were appointed to provide consultancy services to NIEEB.

Mr Manyere said they had engaged the Ministry of Youth, Indigenisation and Economic Empowerment and NIEEB when they applied to the two institutions to approve their own investments with foreign firms to meet the indigenisation requirements.

“In that interaction we were then approached by NIEEB from a curious point of view to say ‘how are you managing to structure your deals such that you are in agreement with foreign companies? They said they had been trying to engage several of these mining companies to comply and they were asking if there was a way we could assist.

“And we did make a pitch and indicated that yes within our human capital resource we have the expertise and categorically at that point in time NIEEB had already been working with a number of other advisers trying to get appropriate advisory services to conclude some of these deals. That was the basis of how we interacted with NIEEB and eventually we agreed to assist NIEEB in its discussions with these companies,” said Mr Manyere.

He said no tender was flighted for the consultancy services.

Mr Manyere said according to the deal, Brainworks was entitled to at most two percent of the share value price as its payment from the indigenising company in the event that the transaction succeeded.

He said in the event that the indigenising companies did not pay them, NIEEB was expected to pay them about $500 per hour for the time taken.

Mr Manyere said from the deals that they advised on Zimplats, Mimosa, Unki, Blanket Mine, Lafarge Cement and Pretoria Portland Cement, all were abandoned.

“I would like to indicate in this committee we never got paid a cent neither by the company that was indigenised nor by NIEEB. We spent a year working on these transactions. All the costs of travel, accommodation, time that we spent negotiating with the various companies we never got any compensation.

“In this particular case the transactions were abandoned. There was no success to them and in that context we just abandoned everything. We just felt there was no need for us to levy that time-based fee,” said Mr Manyere.