A new report by The Sentry and Open Secrets ZA has exposed how politically-connected Zimbabwean oil tycoon, Kudakwashe Tagwirei, allegedly moved suspect funds from the Reserve Bank of Zimbabwe (RBZ) to the City of London using fronts, false invoices, and offshore financial façades.
The report highlights that in 2019, Tagwirei used Sotic International, a Mauritian company that acted as his front, to buy two Zimbabwean mines from ASA Resource Group for $29.5 million. 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 $3.5 million payment as being “in the guise of cooking oil.”
- Download the report: FrontsFakesFacades_TheSentry_OpenSecrets_July2023
The report also says 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 $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. NOIC’s board noted that as the term sheet of Sotic’s loan proposal had already been signed by the RBZ governor, the decision to accept the proposal had already been made.
Accusations of corruption and cronyism had already been swirling around Tagwirei at the time of the purchase. He is known as Queen B. The report claims that South African directors, Mauritian company agents, and offshore financiers created structures that had the effect of disguising where the money came from.
The payments to purchase the mines took place in three stages, each involving behaviour that raises questions and may carry policy implications for deterring powerful and connected individuals from exploiting the system.
After Tagwirei was sanctioned for corruption by the US government in 2020, control of the mines shifted from Sotic to Kuvimba Mining, which is 65% owned by the Zimbabwean state and 35% owned by companies and trusts linked to Tagwirei.