This letter was not replied by the Zim Govermnent!

2 Mountview Court Whetstone London N20 OYZ

Tel: 020 8446 9000

Fax: 020 8446 9537

DX 132890 Whetstone 2



Please kindly comment on the above in relation to SMMZ and the role of the RBZ.





2. You make reference to Judicial Management of SMMZ. As a director of the sole member of SMMZ, I am not aware of any judicial management regarding SMMZ.



2.1 Please kindly furnish me with a copy of the court order granted for the judicial management of the company.



2.2 You will no doubt appreciate that we need to clarify the basis upon which the alleged indebtedness to the RBZ became a state obligation.



2.3 Furthermore, I note that the decree promulgated by President Mugabe paving the way for the Reconstruction and not Judicial Management of SMM, treats the RBZ as part of the state and yet the state is not defined in the Act, please clarify the basis upon which the RBZ, a body corporate in its own right, would be treated as part of the state in relation to SMMZ.



2.4 Please clarify the relationship between the GOZ and the RBZ and how such a relationship is reconciled with the RBZ Act, Banking Act and Companies Act.



3. With respect to disbursements, please clarify the meaning of "the first loan of Z$1 billion was disbursed through Genesis Investment Bank on 30 January 2004". Does this mean that the RBZ had a direct nexus with SMMZ and if so, please provide any supporting information.



4. You then acknowledge that the loans were disbursed under normal PSF terms and conditions except for Z$30 billion through Zimbank where the bank played a facilitation role only. Kind comment on the following:





4.1 What were the normal terms and conditions of the PSF?



4.2 With respect to the Z$30 billion, I note that there is a loan amount Z$20 billion disbursed on 24 May 2004 and Z$10 billion disbursed on 17 August 2004 by Zimbank, but a letter dated 3 November signed by a Ms. Mushipe of the



2 Mountview Court Whetstone London N20 OYZ Tel: 020 8446 9000 Fax: 020 8446 9537 DX 132890 Whetstone 2


makes reference for the first time to the alleged facilitation. SMMZ's board was dismissed by a GOZ and not a court appointed administrator on 6 September 2004 well before the letter from the RBZ. In fact, Zimbank only approached the RBZ on 20 September 2004 also after the alleged reconstruction of SMMZ.



4.2.1 How is the term facilitation defined in the context of the Zimbabwean law?



4.2.2 What were the terms and conditions of the facilitation arrangements?



4.2.3 Are there any documents executed between Zimbank, RBZ and SMMZ, and the unnamed principal in this transaction?



5. You state that the loans were subsequently converted to direct RBZ exposure together with the accrued interest at 10%; 16% and 50% depending on the time the loan was disbursed respectively.



5.1 Please indicate the conversion date.



5.2 What were the terms and conditions underpinning the conversion?



5.3 Who represented SMMZ in the conversion arrangement?



5.4 The GOZ has claimed that the funds were converted to a GOZ loan and yet you state that the loans were converted to RBZ loans. Please clarify the GOZ's involvement in this matter.



6. You state that subsequent disbursements have since been made on a regular basis in line with instructions from the Governor of the RBZ received through the Financial Intelligence, Inspectorate and Evaluation and Security Division, bringing the total principal disbursements to the company as at 26 January 2006 to Z$967,329,350, 878.33.



6.1 You may be aware that SMMZ is still a company wholly owned by SMMH. To this end, we need clarity as to the basis on which the alleged disbursements were made and how the funds were applied.



2 Mountview Court Whetstone London N20 OYZ Tel: 020 8446 9000 Fax: 020 8446 9537 DX 132890 Whetstone 2


6.2 What was the nature of the instructions issued by the Governor of the RBZ? Can you furnish me with a copy of such instructions and the basis upon which it was issued?



6.3 What is the Financial Intelligence, Inspectorate and Evaluation and Security Division and what is its relevance to the SMMZ matter?



6.4 What is the role of the RBZ and the Governor in the alleged reconstruction of SMMZ?



6.5 How are requests for funding motivated, approved, disbursed and monitored by the RBZ?





I look forward to your urgent response on the above.







P. Mariemuthu

Cc: His Excellency President R.G. Mugabe

Hon. Minister H. Murerwa

Hon. Attorney-General, Gula-Ndebele

Mrs. L. Spickett, Case Officer - Companies House - UK Magwells Solicitors

Costa & Madzonga Attorneys

International Monetary Fund - Managing Director