Tagwirei earned US$100m from Trafigura, opened offshore accounts in Mauritius

By Staff Reporter | Nehanda Politics |

Besides being connected to President Emmerson Mnangagwa’s government, one foreign company also played a critical role in Kudakwashe Tagwirei’s rise over nearly a decade, Swiss-headquartered commodity trader Trafigura Group Pte Ltd, says a recent report by the Organised Crime and Corruption Reporting Project (OCCRP).

OCCRP said Tagwirei, after being sanctioned by the United States and United Kingdom for corruption, continued to do business by relocating his network to Mauritius.

Key Findings

Tagwirei has earned at least US$100 million in fees from a partnership with Swiss-based Trafigura. Together, they have profited extensively by dominating Zimbabwe’s fuel market since 2013.

Trafigura quietly extended US$1 billion in loans to the Zimbabwean government, at exorbitant interest rates.

As controversy grew, Tagwirei moved his business network offshore to Mauritius, where he secured a new near-monopoly fuel deal with the government. He is still active in mining and fuel deals in Zimbabwe.

Government officials appear on key company records and Tagwirei’s own correspondence, indicating that there might be more powerful people behind the network.

OCCRP noted that Mnangagwa, after a military coup that ousted the late former President Robert Mugabe, set off on an international tour to declare Zimbabwe “open for business.”

“Sporting a scarf knitted in the five colors of the country’s flag, he assured world leaders that all that was needed to jump-start Zimbabwe’s moribund economy was new leadership and an infusion of foreign investment.

“Four years on, Mnangagwa’s promised ‘New Dawn’ has not arrived. Instead, Zimbabwe’s economy remains in tatters. Public debt — much of it illegally accrued — has ballooned, a lack of foreign currency and fuel shortages continue to cripple the economy, and the value of Zimbabwe’s local currency has plummeted.

“The turmoil has not been without its winners, though. One man, in particular, has prospered from the state’s largesse: Kudakwashe Tagwirei, a tycoon known locally as ‘Queen Bee’ because of his vast economic influence,” read the report.

The organisation also reported that under Mnangagwa’s reign, Tagwirei came to dominate Zimbabwe’s fuel, platinum, and gold sectors. Benefitting from opaquely awarded government contracts worth billions of dollars and preferential access to minerals as well as scarce foreign currency, Tagwirei’s network also got huge state loans he used to enrich himself while indebting the Zimbabwean public.

“Those came from a surprising source that proved a key player in Tagiwirei’s network: Zimbabwe’s central bank.

” At least $3 billion in treasury bills issued by the Reserve Bank of Zimbabwe which may have had no legal authority to do so were awarded to Tagwirei’s group between 2017 and 2019, a parliamentary report said, with the group then funneling the windfall into a massive expansion that included a mining acquisition spree at bargain-bin prices.

“As the country’s currency crashed, Tagwirei’s fortunes soared.

“But it’s not clear if Tagwirei is the sole or even the main beneficiary of this largesse.

“The presence of a handful of state officials in some of the network structures imply he is also a proxy for others. In 2019 the Reserve Bank of Zimbabwe’s governor, John Mangudya, was even named in Tagwirei-connected corporate trusts,” OCCRP said.

OCCRP insiders said Tagwirei is close both to President Mnangagwa and his deputy General Constantino Chiwenga. In 2019, Tagwirei bought Chiwenga, a top of the range Mercedes Benz.

“Besides the government, one foreign company also played a critical role in Tagwirei’s rise over nearly a decade: Swiss-headquartered commodity trader Trafigura Group Pte Ltd.”

The report added Trafigura formed a joint venture with Tagwirei as far back as 2013 that gave the company priority access to the country’s fuel infrastructure and supply business through Tagwirei’s local influence.

“Tagwirei’s links to Trafigura, his business successes at home, and U.S. and U.K. sanctions against him have attracted critical press coverage in recent months.

“Now, using contracts, invoices, and email correspondence between Tagwirei’s network, former Trafigura officials involved in the joint venture, and government officials, OCCRP can reveal new details of how Trafigura and Tagwirei’s partnership worked,” read the report.

OCCRP also learned that Trafigura paid Tagwirei at least US $100 million in fees through early 2018 for his help in creating a dominant position in the Zimbabwean fuel market.

Their joint venture initially called Sakunda Supplies and later renamed Trafigura Zimbabwe, would do this by advancing massive cash prepayments and fuel to the government in exchange for significant control over the Zimbabwean market and priority use of the state’s fuel pipelines.

Former Finance Minister Tendai Biti told OCCRP that: “Only one set of interests controls the fuel: Trafigura and Tagwirei.”

OCCRP said the joint venture would last until December 2019, when Trafigura bought out the soon-to-be-sanctioned Tagwirei. “But the partnership may have been too lucrative to discontinue.

“Only one set of interests controls the fuel: Trafigura and Tagwirei. – Tendai Biti, Former Zimbabwean Finance Minister

“Instead, Trafigura sought to continue its relationship with Tagwirei via Sotic International Ltd., a new company that he had set up in Mauritius, and associated shell companies fronted by South Africa-based directors, several of whom were former Trafigura employees.

In an email to OCCRP, Tagwirei said, “Some of the questions you raise are an embarrassing demonstration of an apparent lack of understanding of the issues you purport to investigate … I unequivocally deny all the accusations and allegations you are making against me in your email.”

In a response to OCCRP, a Trafigura spokesperson said, “Trafigura exited our business relationships with Mr. Tagwirei in December 2019, prior to US sanctions being imposed, through the purchase of [Tagwirei’s stake].

“All commercial arrangements are conducted in full compliance with applicable laws and regulations. Trafigura is one of a number of suppliers to Zimbabwe, South Africa, and Mozambique. There is no exclusivity or market dominance.”

Trafigura said OCCRP’s details were “factually inaccurate,” but declined to answer specific questions about advance payments, payments to Tagwirei, or the purchase price of his shares. The company said, “commercial arrangements are commercially sensitive and as such, are confidential.”

A Captive Market

On Harare’s bustling streets, where centuries-old churches compete for space with modern high-rises, one building stands above its neighbors. Century Towers, an imposing glass structure perched next to one of the capital’s main thoroughfares, houses the main office of Tagwirei’s holding company for his share of the joint venture, Sakunda Holdings Private Ltd, on several floors – including the 15th. One floor below are the offices of Zimbabwe’s energy regulator.

This proximity hints at the closeness critics say allowed Tagwirei to make a fortune from preferential government contracts.

Tagwirei originally signed a contract in 2011 with the National Oil Infrastructure Company of Zimbabwe (NOIC) that gave him many of the rights he would later share with Trafigura.

In July 2013, Tagwirei and his companies Sakunda Holdings and Sakunda Trading agreed to sell access to their existing petroleum contract with NOIC to Trafigura, affording it 49 percent of the shares of a new joint venture.

They agreed to form Sakunda Supplies, based in Zimbabwe, which would hand Trafigura a host of benefits, including preferential access to the crucial Beira pipeline from Mozambique.

NOIC, which had initially awarded Sakunda Holdings the deal in 2011, confirmed in a 2018 letter that Trafigura was entitled to all the benefits enjoyed by Sakunda. Nehanda Radio