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Tagwirei’s former company blacklisted for fueling local currency downfall

The government of Zimbabwe has blacklisted tycoon Kudakwashe Tagwirei’s former company Redan Coups and 18 others over allegations that they are responsible for “price instability and a spiralling exchange rate” leading to the ongoing downfall of the local currency.

In 2020, Trafigura Pte Limited, head-quartered in Switzerland, which was supplying fuel through Puma, Redan and Sakunda service stations, got 100 percent of Trafigura Zimbabwe after acquiring Tagwirei’s 51 percent stake.

Trafigura Pte held a minority 49 percent stake in Trafigura Zimbabwe through Puma Energy, while Sakunda Petroleum had the controlling stake of 51 percent, in line with local content laws that applied at the time of the investment.

The International Monetary Fund a few years back warned the Southern African country that state payouts to Trafigura, a company linked to global commodities traders, were pushing the shortages-plagued economy to the brink, reviving fears of corruption at the highest level of government.

One of Trafigura Pte’s fuel supplying arm Redan has been blacklisted by the Treasury after the recommendations of the Reserve Bank of Zimbabwe (RBZ)’s Financial Intelligence Unit (FIU).

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Finance Minister Mthuli Ncube accused the 19 companies of trading large amounts of electronic Zimbabwe dollars on the parallel market soon after getting paid by the government and fueling inflation and subsequent fall of the Zimbabwean dollar.

“It has been observed that some contractors after passing through the value for money process and having received their payment from the government still tend to siphon their proceeds into the parallel market thereby causing domestic inflationary pressures,” Ncube said.

“In this regard, this statement today is to give an update on findings from the work conducted by FIU on monitoring payments made to government suppliers as well as measures to deal with non-compliant contractors with a view to plug parallel market dealing.

“FIU has noted that upon receiving their payments, the companies would engage in spontaneous illegal foreign currency transactions through buying foreign currency from individuals and entities.”

The named 19 companies are: Redan Coupon, Nariox (Pvt) Ltd, New Age Marketers (Pvt )Ltd, Pepwit Investments (Pvt) Ltd, Tirumi Investments (Pvt) Ltd, Mwendo Africa (Pvt) Ltd, Alg World Investments (Pvt) Ltd, Lobmer Investments (Pvt) Ltd, Nisbank Enterprises (Pvt) Ltd, Sailgroom Enterprises, Wayvar Investments, Poweride Safaris, Azelion Energy (Pvt) Ltd, Blackdeck (Pvt) Ltd, Paza Buster (Pvt) Ltd, The Best Car Rental, The Legacy Car Rental, Josam Enterprises (Pvt) Ltd, and Construction Warehouse (Pvt) Ltd.

Recently, the FIU froze accounts of several companies including Transerv, Powerspeed Investments, Electrosales, Halsted Brothers Ltd, and Enbee Store after accusing them of fuelling currency losses.

Ncube said some of the accused companies would also purchase fast moving consumer goods from various manufacturers and the goods would then be sold exclusively in foreign currency.

“In view of the above, and in an endeavor to maintain sanity in the foreign currency market and to curb inflation, the government is left with no other option than to blacklist the mentioned companies,” he said.

This comes at a time when the Zimbabwean dollar is continuously falling against the greenback.