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Zimbabwean tycoon Kudakwashe Tagwirei allegedly laundered funds, according to a report by The Sentry and Open Secrets ZA. The report reveals how Tagwirei, a politically-connected oil tycoon, purportedly transferred suspicious funds from the Reserve Bank of Zimbabwe (RBZ) to London through the use of intermediaries, false invoices, and offshore financial entities.
According to the report, in 2019, Tagwirei employed Sotic International, a Mauritian company acting as a front, to acquire two Zimbabwean mines from ASA Resource Group for $29.5 million. To facilitate the second payment of £12 million from Zimbabwe to Mauritius on behalf of Sotic, South African directors generated invoices for exports that lacked official records in Zimbabwe’s customs data. This raised concerns about potential trade misinvoicing, a method commonly employed in trade-based money laundering. Internal e-mails among the directors openly discussed these invoices, referring to a $3.5-million payment as being “in the guise of cooking oil.”
Additionally, the report reveals that emails indicate the involvement of Zimbabwean government officials, including “HE” — likely referring to His Excellency President Emmerson Mnangagwa — and the Finance Ministry’s permanent secretary, in Sotic’s affairs.
In another transaction in mid-2019, then-Foreign Minister Sibusiso Moyo forwarded Sotic’s $1.2-billion pre-financing proposal to the state-owned National Oil Infrastructure Company (NOIC). The proposal suggested an upfront loan in exchange for discounted access to Zimbabwe’s sole oil pipeline. Notably, NOIC’s board acknowledged that since 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.
Allegations of corruption and favoritism surrounding Tagwirei had already been circulating at the time of the mine purchase. Referred to as “Queen B,” Tagwirei is accused of collaborating with South African directors, agents of the Mauritian company, and offshore financiers to create complex structures that obscured the money’s origin.
The purchase payments for the mines were conducted in three stages, each involving questionable actions that raise concerns and potentially have policy implications for preventing powerful and well-connected individuals from exploiting the system.
Following Tagwirei’s corruption-related sanctions imposed by the US government in 2020, control of the mines shifted from Sotic to Kuvimba Mining. Kuvimba Mining is 65-percent owned by the Zimbabwean state and 35-percent owned by companies and trusts associated with Tagwirei.
In August 2020, Tagwirei was sanctioned by the U.S. Treasury Department for derailing economic development and harming the Zimbabwean people through corruption.
“Tagwirei used a combination of opaque business dealings and his ongoing relationship with President Mnangagwa to grow his business empire dramatically and rake in millions of U.S. dollars,” the sanctioning brief read.
