Documents show that a politically linked oil tycoon transferred the alleged cash from the Reserve Bank of Zimbabwe (RBZ) to the City of London via fronts, fraudulent invoices, and offshore financial façades.
In 2019, Zimbabwean presidential advisor Kudakwashe Tagwirei purchased two Zimbabwean mines — Bindura Nickel and Freda Rebecca Gold Mine — for US$29.5 million (R431 million, £23 million) from ASA Resource Group (ASA), a bankrupt firm run by British company administrators Duff & Phelps (now known as Kroll).
Tagwirei had been dogged by allegations of corruption and cronyism for years at the time of the purchase. South African directors, Mauritian business agents, and offshore financiers – all of whom deny wrongdoing in their work for Sotic – set up structures that obscured where the money originated from.
Emails suggest that at least one member of the Duff & Phelps team was aware of the connection between Sotic and Tagwirei’s oil firm, Sakunda Holdings.
The payments by Sotic to purchase Bindura Nickel and Freda Rebecca Gold Mine took place in three stages: a deposit made in July 2019 and two payments in October 2019. Each stage involved behaviour that raises questions and may carry policy implications when it comes to deterring powerful and connected individuals from exploiting the system:
1. The favour: During the period when Sotic was getting the funds to pay the £2.3 million deposit, Sotic’s Zimbabwean subsidiary, Landela Investments, obtained hard currency from the RBZ at a favourable exchange rate when cashing in a US$60 million portion of a large Treasury Bill given to Sakunda, telling the RBZ that some of the funds were needed to buy Bindura Nickel. Tagwirei and the RBZ deny that the rate was favourable.
2. The fake: To get money into Mauritius from Zimbabwe for Sotic’s second £12 million payment, South African directors created invoices for exports that could not be found in Zimbabwe’s official customs records, raising questions as to whether trade misinvoicing, a technique commonly used in trade-based money laundering, had occurred. The directors discussed these invoices openly in internal emails, describing a US$3.5 million payment as being ‘‘in the guise of cooking oil. Don’t worry.
The money is for ASA’’.
The directors declined to supply documents showing the invoiced deliveries had been made, citing confidentiality, but deny any wrongdoing.
3. The façade: For the final £8.7 million payment, Tagwirei moved his money into Sotic via a complex offshore façade that had the effect of disguising the source of funds, according to internal messages and financial records. Those involved state that the transaction was legitimate and dispute that Sotic was a front company for Tagwirei.
A mystery remains regarding whether Tagwirei was the only person behind Sotic. In confidential messages reviewed in connection with this report, Tagwirei claimed that the government of Zimbabwe owned 65 per cent of Sotic, while he held the remainder.
Emails show that Zimbabwean government officials, including ‘HE’ — likely His Excellency President Emmerson Mnangagwa — and the permanent secretary at the finance ministry, took a close interest in Sotic’s affairs.
For example, in a separate transaction that also took place in mid-2019, Foreign Minister SB Moyo forwarded Sotic’s US$1.2 billion pre-financing proposal to the state-owned National Oil Infrastructure Company (NOIC), proposing an upfront loan in return for discounted access to Zimbabwe’s only oil pipeline.
The board of directors of NOIC underlined that because the term sheet of Sotic’s loan request had already been approved by the governor of the RBZ, the decision to accept the proposal had already been taken.
After Tagwirei was sanctioned by the US government for corruption in 2020, control of Bindura Nickel and Freda Rebecca Gold Mine passed from Sotic to Kuvimba Mining, which is 65 percent controlled by the Zimbabwean state and 35 percent held by Tagwirei-linked firms and trusts.
The Sentry and Open Secrets.
