Zim Forex looters list a big joke

By Gift Phiri

President Emmerson Mnangagwa’s government yesterday released the long-awaited list of companies and individuals alleged to have failed to return $827 million stashed abroad following the expiry of a 14-week-long amnesty, the Daily News can report.

The list, which reads like a housewife’s grocery checklist, has over 1 800 companies, with their dollar values dwarfed by diamond mining companies and Chinesnationals.

But Mnangagwa’s name-and-shame strategy has fallen short of expectations.

It has been met with widespread condemnation for leaving out the big fish in his administration, previously reported to have funnelled millions of greenbacks abroad.

Last Friday, former president Robert Mugabe’s nagging wife‚ Grace — widely speculated to be the main target of Mnangagwa’s call for funds to be returned — told a South African weekly publication that she had nothing to hide.

“We are honest people. We have no money outside‚” she was quoted saying.

Legal experts were yesterday scathing in their criticism of Mnangagwa’s naming and shaming gimmick, saying it violates the rule of law and presumption of innocence.

Fundamentally, the list contains companies that shut down years ago, among them Eaglemoss Enterprises, Coppleridge, Remington and Hubert Davies.

Some of the listed corporates are under judicial management, for example Apex Corporation, while River Ranch — a private diamond company owned by late Saudi billionaire Sheikh Adel Aujan who was in a partnership with former vice president and now opposition National People’s Party leader Joice Mujuru’s family — is currently under liquidation.

Critics told the Daily News yesterday that its compilation betrays a factional agenda by leaving out functionaries in the Team Lacoste camp, who have unfinished business with rivals in the Generation 40 (G40) faction, linked to Mugabe and his wife, Grace.

The biggest culprit, according to the list, is African Associated Mines (Private) Limited — a subsidiary of SMM Holdings (Private) Limited, linked to South African-based businessman Mutumwa Mawere.

Mawere’s businesses came under government control through a presidential decree in 2003 amid reports that the businessman had fallen out with Mnangagwa.

African Associated Mines, which topped Category 1, is said to have externalised $62 049 622, but it was not clear when this money was externalised.

SMM, based in Zvishavane and Mashava, ground to a halt in 2008, three years after the government seized them from Mawere, under a controversial “reconstruction” law that allowed the State to take over assets of businesses deemed to be insolvent and incapable of servicing loans and charges owed to State institutions and agencies.

The mothballed mines were placed under the State-run Zimbabwe Mining Development Corporation (ZMDC), which has been running them through Mnangagwa’s proxy, Afaras Gwaradzimba.

Diamond mining firms ranked high up the list, with numerous Chinese retail companies also dominating the table.

Also prominent in Category 1 — illicit financial flows externalised through non-repatriation of export proceeds — are almost all of the nine diamond mining firms that operated in the Marange fields in the eastern part of the country before they were evicted ostensibly because their licences had expired.

These include Marange Resources ($54,2 million)‚ Canadile Miners ($31,3 million‚ Mbada ($14,7 million) and Jinan ($11 million).

Canadile, which operated in the Marange diamond fields in 50-50 partnerships with ZMDC was kicked out from the fields over 10 years ago on fraud allegations.

It’s said to have externalised $31 350 554.

The company which took over from Canadile — Marange Resources — which is government-owned, reportedly externalised $54 238 249.

Going by the list, government firms were the biggest culprits.

They were mentioned together with Schweppes Zimbabwe Limited which is a manufacturer and distributor of non-carbonated still beverages under licence from the Coca-Cola Company, giant cooking oil manufacturer United Refineries Limited, PG Industries (Zimbabwe) Limited — a major manufacturing company; the distribution unit of light manufacturing business Innscor; TN Harlequin Luxaire the largest household furniture manufacturer and retailer in Zimbabwe, Adam Bede, a manufacturer of top end furniture; and auctioneer Hammer and Tongues.

Category 2 include funds externalised through payment of goods not received in Zimbabwe amounting to $124,8 million from 1 403 companies that include Ekusileni Medical Centre — a private specialist hospital in Bulawayo funded by State pension fund, the National Social Security Authority — built in honour of the late vice president Joshua Mqabuko Nkomo.

Ekusileni Medical Centre‚ a non-operational hospital in the second largest city Bulawayo, is alleged to have sent out $3 million out of the country.

The specialist hospital was built by Nssa‚ but has never been operational since its inception 14 years ago.

The hospital was part of Mnangagwa’s 100-day pledge when he came into office through military assistance but nothing has been done to open it.

Also under Category 2 is Anjin Investments, a joint venture between the Anhui Foreign Economic Construction (Group) Co Ltd and Matt Bronze Enterprises, a Zimbabwe Defence Forces company; Mbada Diamonds; Hwange Colliery Company; textile company Qingshan Investments (Private) Limited; Puzey & Payne, a major player in the Zimbabwe’s motor industry; Intratek linked to Wicknell Chivayo, a businessman who rose to prominence after winning large Zimbabwean government contracts; Zimbabwe’s largest gold producer, Metallon Gold; Sable Chemicals, Zimbabwe’s sole manufacture of Ammonium Nitrate fertiliser; Harare City Centre Adventist Church; E Munenzva Bus Co P/L; Bindura Nickel Mine T/A Trojan Nickel Min; National Blood Service Zimbabwe; Zimbabwe Red Cross Society; the Heritage School and Mukonitronics P/L.

Category 3, listing funds externalised to foreign banks in cash or under spurious transactions amounts to $464 million from 157 companies and individuals.

It includes Zanu PF-linked businessman Agrippa Masiyakurima, popularly known as Bopela and a host of Chinese players.

Zimbabwe has over the last few years courted investors from Asian countries such as China under a “Look East” policy, but analysts say the drive has not really yielded much in terms of real cash flows into Zimbabwe’s economy.

In this category, there are some notable figures such as that of gospel-musician-cum-politician Elias Musakwa‚ who allegedly externalised $9 million to Portugal.

Musakwa’s known business venture is record label Ngaavongwe Records‚ which he bought with the late former air marshal‚ Josiah Tungamirai‚ in 2007 from Gramma Records.
He once worked for the Reserve Bank of Zimbabwe (RBZ) as a divisional head.

The last category with funds externalised to foreign banks in cash is dominated by bank deposits made in China.

But the largest single sums were taken to Botswana with one of the alleged looters‚ businessman Farid Shahadat‚ said to have externalised $1 197 080.

His case is already before the courts with allegations that between January 1 and April 30 last year he opened foreign bank accounts with one local bank and another bank in Botswana.

He deposited a total of $1 197 580 into his three foreign bank accounts.

Mnangagwa said entities and individuals listed in the three categories ignored and or neglected the amnesty by failing to account for the funds before the March 16, 2018 deadline.

“Despite concerted efforts by authorities and banks to request these entities and individuals to account for the externalised funds, the entities or individuals failed, ignored or neglected to respond to the amnesty.

“It is against this background that the authorities have no other recourse to cause these entities and individuals to respond, other than to publicise the names of the entities and individuals so that the concerned parties take heed of the importance of good corporate governance and the legal obligations of citizenry and, where necessary, to ensure that those responsible for such illicit financial flows are brought to justice,” Mnangagwa said, adding listed entities or individuals with proof of declaration or repatriation of funds are free to approach the Reserve Bank of Zimbabwe which is ready to process such transactions without prejudice given that the burden of proof lies with the concerned parties.

Experts with a grasp of international trade and financial flows said there was blatant breach the rule of law and the legal doctrine of presumption of innocence.

They said when investigators or auditors are doing their work, they don’t publish anything until they have sought a response from the auditee.

Even when they want to publish a list of debtors, they do what is called “debtor circularisation” a technique used by an auditor in which all debtors to a company are asked to confirm the amounts outstanding or to reply if the amount stated is incorrect or in dispute.

They said government should have simply contacted the named organisations directly to contact their banks to clear and acquit their Currency Declaration (CD)1 forms.

“In business, when you import or export, you are given 90 days to clear your CD1 forms. That’s not externalisation,” said an economics expert, speaking on condition of anonymity.

A top Harare banker warned yesterday that government has broken the cardinal rule of banking confidentiality, and sadly, they got it all wrong.

“Very very sad. Thunder without sound! Lighting without fire . . . a real damp squib! The nation has been fooled again! In business, anywhere in the world, there are bad debtors. Most of those importers who owe Zimbabwean firms money are either no longer in existence or are abiding by terms of payment they agreed. What was exported is not government property!” said the banker.

Critics said there were no high-profile bigwigs caught in the crackdown amid allegations the Mnangagwa regime has turned its fight to “small fish.”

They said Mnangagwa’s corruption battle has targeted only members of the vanquished G40 faction and raised the ire of a public fed up with tales of top civil servants boozing it up on taxpayers’ money or taking bribes to approve projects.

Political analyst Gladys Hlatywayo said: “This list shows you the lack of seriousness on the part of this government. It is evidence that the so-called anti-corruption drive is just a charade. The real thieves are in government and in the ruling party and yet they continue to be shielded from accountability. This administration is a fraud.”

Post-doctoral research fellow at the University of Johannesburg and researcher Pedzisai Ruhanya quoted one of Zanu PF founders and Harvard-trained lawyer Eddison Zvobgo’s 1976 speech where he said: “In Southern Rhodesia, a prison is a place where big criminals keep smaller ones (The Law as an instrument of oppression in Southern Rhodesia”.

Ruhanya said: “That’s what ED’s list of foreign currency externerlisers (sic) tell us. The big crooks in the establishment are free.”

Political analyst Maxwell Saungweme said the big question is that the list is released, so what?

“If you look at the companies and amounts they are said to have externalised, petty amounts below $100 000. This makes the whole exercise preposterous in a way.

“In addition, where are the big names? Names of the politicians whom we all know got richer during the 37 years of crisis. Where is their money? This looks like a heavily abridged list to cover up for big Zanu PF externalisers.”

He said the majority of the money said to have been externalised went to Zimbabwe’s “all-weather friends China.”

“Very interesting as we look east and our general (Constantino Chiwenga) had to travel to China before the coup. Publishing this list is a morose stab to deal with the effects, not root causes of externalisation. Why will people not externalise if they depend on imported inputs and materials for their production chains, yet local banking situation makes it difficult for the manufacturers to get their funds out of the system.

“Mnangagwa and all should deal with the root causes of externalisation and avoid trying to divert attention from the real elephant in the room by publishing lists of manufacturers that transferred petty cash to other countries,” Saungweme said.

Academic and fierce-pro-Mnangagwa loyalist and newspaper columnist Reason Wafawarova said: “Well, most of it looks like peanuts by small businesses. Let us see what happens next.”

A financial expert said it was baffling that instead of prosecuting offenders, government was opting to name and shame.

Former Finance minister Tendai Biti is on record saying under Exchange Control Regulations, externalisation of United States dollars, rands or other currencies under the basket of currencies does not constitute a crime because since 2009, all foreign currencies became legal tender of this country.

“So the US dollar is legal tender, it is no longer foreign currency, so how does externalising it become illegal?” Biti asked rhetorically.

Asked about Biti’s reasoning at the CEO Africa Roundtable in Victoria Falls last week, Mnangagwa sarcastically said those arrested for illegally externalising funds and assets must retain the former Finance minister as counsel.

“If these people are being wrongly dealt with, they must rush to Biti so that he can defend them in court. That is business for him, but I’m going ahead to prosecute those who have taken out assets from Zimbabwe, which belong to the people, which they have taken out, which under our laws if you export you are required under CD1 forms to remit the proceeds of exports of goods, which are Zimbabwean.

“So, if Biti says no, there is no requirement, let him defend them. He must feel very good about that,” an irritated Mnangagwa said. DailyNews