Dismantling Zimbabwe’s kleptocracy: Report lifts lid on Kuda Tagwirei’s offshore dealings and sanction-avoiding strategies

Source: Dismantling Zimbabwe’s kleptocracy: Report lifts lid on Kuda Tagwirei’s offshore dealings and sanction-avoiding strategies

 Kudakwashe Tagwirei (left). (Photo: Twitter) Zimbabwean President Emmerson Mnangagwa. (Photo: Waldo Swiegers / Bloomberg via Getty Images)  Less

Reports analysing corruption and State Capture in Zimbabwe seem to be coming thick and fast. Maverick Citizen has obtained a new report published on Thursday that zooms in on the burgeoning offshore business empire of Kudakwashe Tagwirei, Zimbabwe’s richest businessperson and a close adviser to President Emmerson Mnangagwa.

Kudakwashe Tagwirei’s role is already both well known and controversial.

In August 2020 he was added to the US’s sanctions list of prominent Zanu-PF-connected businessmen on the grounds that he “and other Zimbabwean elites have derailed economic development and harmed the Zimbabwean people through corruption”.

He also looms large in two earlier documents reported on by Maverick Citizen: the Cartel Power Dynamics report (published in February), and the Africa Risk Consulting (ARC) Political Stakeholders report (published in March).

Tagwirei has not responded publicly to either report. Neither did he respond to a request we made for comment on this report.

Sanctions and bad publicity, however, do not seem to be holding him back. Recently an article in Bloomberg News placed him at the heart of Kuvimba Mining House Ltd, a state-led mining project, “that would hold some of the nation’s most valuable gold, platinum, chrome and nickel mines and whose revenue would be used to revive the country’s moribund economy”.

However, the report just released by The Sentry digs much deeper.

It is titled Shadows and Shell Games: Uncovering an Offshore Business Empire in Zimbabwe and looks in particular at business manoeuvres Tagwirei currently has in play that, ironically (given the sanctions he faces), tighten his hold on the Zimbabwean economy and increase his reach into countries in the region, including South Africa and Mauritius.

The Sentry is an organisation based in Washington, DC, that describes itself as “an investigative and policy team that follows the dirty money connected to African war criminals and transnational war profiteers and seeks to shut those benefiting from violence out of the international financial system”.

Contacted by Maverick CitizenJohn Prendergast, its co-founder (with actor George Clooney) said:

“Zimbabwe has long been victimised by networks rooted in Zanu-PF which have undermined the vast promise that the Zimbabwean people and natural resources possessed at independence. The Sentry seeks to contribute to ongoing efforts to disrupt those kleptocratic networks both inside and outside Zimbabwe, and support civil society and other reform efforts at state retrieval.”

JR Mailey, its Investigations Director told us: “Whether it is Sudan, Congo, Zimbabwe or South Africa we see the role of offshore enablers — banks, lawyers, and company formation agents, again and again, enabling the looting of Africa’s resources by politically connected cronies. All of them — politicians, cronies and enablers — need to face accountability for what they are doing.”

The report seems to be based primarily on a trove of documents (including numerous emails) leaked by a whistleblower, Christopher Fourie. Fourie is a South African businessman and director of Sotic International whose relationship with Tagwirei and his business associates went sour.

It is backed up by South African court documents as well as extensive research and interviews. The Sentry report claims that almost all of those named in their report were asked for comment (we have verified this correspondence) but none responded substantively in the time afforded to them.

Zimbabwean President Emmerson Mnangagwa with Kudakwashe Tagwirei. (Photo: Twitter)

The South African connection

As in previous reports, it is becoming clear that elite corruption in Zimbabwe overlaps South Africa’s borders and that South African businessmen are alleged to be active participants in cartels that rob the Zim economy.

In this case, the report cites advice Tagwirei obtains from a law firm, but also draws attention to several South African businesspeople, alleging that:

“Possibly due to the accusations of corruption that damaged his reputation with banks and potential business partners, Tagwirei benefited from business partnerships with four South Africans — Jozef Behr, Christopher Fourie, Ronelle Sinclair, and Christian Weber — from 2019, arranging for them to have prominent roles at Sotic, a move that effectively concealed his de facto control over the company. Fourie later became a Whistleblower.”

Maverick Citizen wrote to Brown, Behr, Sinclair and Weber asking them if they were aware of the Sentry report and why they had not responded to questions sent to them.

Only Brown responded.

The Sentry’s report alleges that these four are at the heart of the “corporate labyrinth” and that they are all beholden to Tagwirei.

As an example, it replicates an email from May 2019 in which Tagwirei berates Behr, Fourie, Sinclair and Weber and then sets out their roles as well as his expectations of them.

He tells them:

“We are about to make one of the biggest companies in southern Africa and here you are jostling and fighting. We have so much work ahead of us. Be patient all of you. There is enough work for all to go around. Stop fighting.”

Relying on the emails it also claims that another well known South African businessman, the former CEO of Impala Platinum, David Brown, “became chairman of Great Dyke Investments in late 2019 and, at Tagwirei’s request, became director of Sotic International in the spring of 2020”.

In response to our request for comment Brown denied any relationship with Tagwirei or any improper behaviour and suggested that any evidence of corruption be sent to the independent chair of the Kuvimba Board. Brown told us that:

“… it is imperative that you look at matters pre-June 2020 and then post June 2020. Since June 2020 the company has been managed within approved and appropriate frameworks and before one concludes I am saying that it was not well run pre-June — I am not in a position to comment pre-June as it predates my real involvement.”

He claims that the allegations of corruption all emanate from a “disgruntled employee” (Fourie) and that “apart from “hearsay” I have not seen any documentation that supports the claims regarding Mr Tagwirei’ s alleged ownership in said assets. My own interaction with Mr Tagwirei is very infrequent and, in fact, I have seen him once in the last seven months so hardly ‘a business’ partner as you quote.”

Significantly last week, Brown announced that he is standing down from Kuvimba Mining House. Other media sources speculated as to whether this may be linked to imminent exposes about his role and relationships with Tagwirei.

However, Brown’s response to us was categorical. He says that “my role at Kuvimba as it was to develop the vision and strategic direction for the company, stabilisation the production at the operations, put in place the growth options for the group for the next 24 months and in addition to set up the organisational infrastructure. This has largely been completed. The reason I include is again a supporting demonstration of not being a so-called ‘business partner’ but for my role of an (sic) employee.”

The report also refers to the involvement of a South African lawyer, whose name we have established, who can be found discussing how to set up trust structures in Mauritius to own Sotic International so that “effective control of the shares is given to Mr Tagwirei”.

The report describes this group of lawyers and businessmen as people “who are seemingly happy to turn a blind eye to accusations of cronyism and corruption.”

Russia, the military and mining: A toxic mix

Significantly (in terms of the current geopolitics of influence), the report documents Russian involvement in the business deals, as well as the role of the Zimbabwean military in what it calls “off-budget financing of Zimbabwe’s abusive and partisan military”. The role of the military in Zim’s politics and economy is something that also comes out strongly in the ARC report.

The Sentry alleges that Tagwirei bought out the military’s 50% share in a mining company in order to make it easier for the company, Great Dyke Investments, to attract foreign investment. It warns that:

“If payments [which it considers could be as high as $220-million made by the company owned by Tagwirei] to Pen East Mining were retained by the Ministry of Defence, they raise the prospect of off-budget financing of the Zimbabwean military.”

Noting the role of the Zimbabwean military in violently suppressed demonstrations and keeping Zanu-PF in power, the report argues that parliamentary financial control of any national defence force is a prerequisite to ensure the “security sector cannot set and finance its own agenda. Off-budget revenue removes oversight over spending by Parliament and scrutiny bodies such as Zimbabwe’s Auditor-General. It would be troubling if a prominent tycoon accused of corruption purchased a mining company from Zimbabwe’s military …”

However, they add that because of the opaqueness allowed by Zimbabwe’s company laws “there is no conclusive record of the sale price, the ultimate recipient of the payment, or the use of the proceeds from the deal”.

A new set of recommendations

The report ends with a series of detailed recommendations.

It suggests that:

“The operations of Tagwirei’s network are emblematic of larger, structural problems in Zimbabwe. A select group of politicians, the military, and businesspeople dominate government decision-making with little oversight or scrutiny. Key information about public finances remains shrouded in secrecy. An environment of impunity prevails. Left unaddressed, these dynamics will likely become further entrenched.”

The Sentry calls for “a three-pronged response to these challenges”.

“First, government agencies and law enforcement bodies in numerous jurisdictions, including the United States, South Africa, and Mauritius, must conduct thorough, independent inquiries into Tagwirei’s operations.

“Second, the loopholes and institutional deficiencies in Zimbabwe that create a permissive environment for corruption require urgent reform.

“Finally, governments and private sector actors in a position to act must take proactive steps to shut down or reduce corruption and illicit financial flows.”

Inside Zimbabwe, it recommends establishing “a commission of inquiry into allegations of state capture”, along the lines of South Africa’s Zondo Commission. Unfortunately, this worthy proposal seems highly unlikely whilst Zanu-PF retains its iron grip on power.

It also calls on the Reserve Bank of Zimbabwe to “commission and publish an independent investigation into the seemingly preferential treatment afforded to Tagwirei”. This too seems highly unlikely. Outside of Zimbabwe, it calls for “a coordinated strategy to counter state capture and catalyse structural reforms and systemic change” involving the US, the UK, the EU, and the World Bank. DM/MC

Zimbabwe Situation