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Summary
A politically-connected oil tycoon moved suspect funds from the Reserve Bank of Zimbabwe (RBZ) to the City of London using fronts, false invoices, and offshore financial façades, documents reveal.
In 2019, Zimbabwean presidential advisor Kudakwashe Tagwirei used Sotic International, a Mauritian company that documents reveal acted as his front to disguise his involvement, to buy two Zimbabwean mines—Bindura Nickel and Freda Rebecca Gold Mine—for $29.5 million (R431 million, £23 million) from ASA Resource Group (ASA), a bankrupt firm that was being run by British company administrators Duff & Phelps (now known as Kroll).*
At the time of the purchase, accusations of corruption and cronyism had already been swirling around Tagwirei for years. South African directors, Mauritian company agents, and offshore financiers—all of whom deny that their work for Sotic involved wrongdoing—created structures that had the effect of disguising where the money came from. At least one member of the Duff & Phelps team had reason to know there was a link between Sotic and Tagwirei’s oil company, Sakunda Holdings, emails show.
The payments by Sotic to purchase Bindura Nickel and Freda Rebecca Gold Mine took place in three stages: a deposit made in July 2019 and two payments in October 2019. Each stage involved behaviour that raises questions and may carry policy implications when it comes to deterring powerful and connected individuals from exploiting the system:
- The favour. During the period when Sotic was getting the funds together to pay the £2.3 million deposit, Sotic’s Zimbabwean subsidiary, Landela Investments, obtained hard currency from the RBZ at a favourable exchange rate when cashing in a $60 million portion of a large Treasury Bill given to Sakunda, telling the RBZ that some of the funds were needed to buy Bindura Nickel. Tagwirei and the RBZ deny that the rate was favourable.
- The fake. 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. Don’t worry. The money is for ASA’.* The directors declined to supply documents showing the invoiced deliveries had been made, citing confidentiality, but deny any wrongdoing.
- The façade. For the final £8.7 million payment, Tagwirei moved his money into Sotic via a complex offshore façade that had the effect of disguising the source of funds, according to internal messages and financial records. Those involved state that the transaction was legitimate and dispute that Sotic was a front company for Tagwirei.
A mystery remains regarding whether Tagwirei was the only person behind Sotic. In confidential messages reviewed in connection with this report, Tagwirei claimed that the government of Zimbabwe owned 65 per cent of Sotic, while he held the remainder. 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.*
After Tagwirei was sanctioned for corruption by the US government in 2020, control of Bindura Nickel and Freda Rebecca Gold Mine shifted from Sotic to Kuvimba Mining, which is 65 per cent owned by the Zimbabwean state and 35 per cent owned by companies and trusts linked to Tagwirei.
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Response Letter
Response to The Sentry from a representative for Mr. Kundomal and Capital Horizons
Source Material
Payments
26 July 2019 – Sotic pays £2.3 million deposit to Shoosmiths’ client account, the law firm representing Duff & Phelps.
https://www.documentcloud.org/documents/23606733-fff070-23m-deposit-paid
1 October 2019 – Sotic pays £12 million to Shoosmiths’ client account.
https://www.documentcloud.org/documents/23606777-fff046-asa-swift-code-document
21 October 2019 – Kudakwashe Tagwirei’s $8.5 million payment to Almas Global Opportunity Fund.
23 October 2019 – $8.425 million payment from Almas to Sotic.
https://www.documentcloud.org/documents/23606780-fff058-swift-almas-pays-sotic-via-citi
23 October 2019 – Almas requests that Sotic repay some of the accidental overpayment of $8.425 million, which should have been $8.245 million.
https://www.documentcloud.org/documents/23606734-fff001-wire-transfer-bank-one-limited-1
24 October 2019 – Sotic pays £8.25 million to Shoosmiths’ client account.
https://www.documentcloud.org/documents/23606751-fff029-sotic-shoosmith-8m
25 October 2019 – Sotic pays £450,000 to Shoosmiths’ client account.
https://www.documentcloud.org/documents/23606752-fff030-sotic-shoosmith-payment-4m
2019 – Summary of inward payments to Sotic, including $10.5 million from Rimosa.
https://www.documentcloud.org/documents/23606784-fff063-rimosa-makes-105m-inwards-payments-to-sotic
Sotic International
31 May 2019 – Email from Kudakwashe Tagwirei to Sotic executives stating that he is putting money into Sotic to purchase Bindura Nickel Corporation (BNC) and appointing directors to Sotic.
https://www.documentcloud.org/documents/23606756-fff036-2019-05-31-kudakwashe-tagwirei-email
26 July 2019 – Sotic International resolution to lend money to Landela Investments to pay the deposit for Bindura Nickel and Freda Rebecca Gold Mine.
27 August 2019 – Email between Sotic executives discussing creating an apparently fake invoice between Sotic International and a trading partner, Rimosa Trading.
2019 – Share Purchase Agreement between Landela Investments and ASA Resource Group.
https://www.documentcloud.org/documents/23606754-fff032-asa-sotic-spa
20 January 2020 – Almas Global Opportunity Fund exercises its right to convert its convertible debentures into 65% of Sotic’s shares; the remaining 35% is transferred to Pfimbi Ltd (Mauritius).
Duff and Phelps
July 2019 – Internal Sotic emails discussing whether Duff & Phelps is aware of a connection to Sakunda.
https://www.documentcloud.org/documents/23606758-fff040-asa-resource-group-plc#document/p2/a2260653
July 2019 – Internal Sotic emails discussing how to respond to Duff & Phelps’ know your customer (KYC) questions.
https://www.documentcloud.org/documents/23606759-fff043-mark-patterton-and-sakunda
13 August 2019 – Duff & Phelps mentions a possible link between Sotic and Sakunda group in an email exchange.
https://www.documentcloud.org/documents/23828841-re-asa-bnc-questions
20 September 2019 – Duff & Phelps are warned of a connection between Sakunda and Sotic.
Capital Horizons
30 September 2019 – Email from Tagwirei to Capital Horizons CEO Shaan Kundomal regarding the ASA transaction.
https://www.documentcloud.org/documents/23606743-fff013-landelasotic
30 September 2019 – Email exchange between Tagwirei, Sotic director, and Capital Horizons about the freezing of the bank accounts for Landela Investments and trading partners Billheight Investments and Rimosa Trading.
1 October 2019 – Letter from Norman Chimuka, who was also Tagwirei’s lawyer, stating that Rimosa Trading’s account is not frozen.
https://www.documentcloud.org/documents/23606782-fff061-account-status-_-rimosa-trading
1 October 2019 – Letter from Norman Chimuka stating that Landela Investment’s account is not frozen.
https://www.documentcloud.org/documents/23606783-fff062-account-status-_-landela-investments
13 October 2019 – Capital Horizons CEO Shaan Kundomal seeking approval from Christopher Fourie, a Sotic director and later whistleblower, and Kudakwashe Tagwirei regarding Almas Global Opportunity Fund buying Sotic’s convertible debentures
https://www.documentcloud.org/documents/23606737-fff006-whatsapp-image-2022-04-29-at-125640-pm
28 October 2019 – Capital Horizons CEO Shaan Kundomal stating to Christopher Fourie that Kudakwashe Tagwirei routed some of the funding for the ASA Resources transaction into Sotic via Kundomal’s Seychelle’s company, Kubera Investments.
https://www.documentcloud.org/documents/23606738-fff007-whatsapp-image-2022-04-29-at-125657-pm-1
28 October 2019 – Capital Horizons invoice for work on the ASA transaction.
https://www.documentcloud.org/documents/23606753-fff031-invoice-for-using-kubera
10 October 2019 – Email from Capital Horizons CEO Shaan Kundomal to Tagwirei passing along, inter alia, the proposed Almas Global Opportunity Fund “investment mechanism” and a proposal to improve Tagwirei’s reputation following the publication of “adverse media.”
2 October 2019 – The reputation management proposal (drawn up by a third party) forwarded by Capital Horizons, proposing to “‘bury’ as much negative information as possible.”
https://www.documentcloud.org/documents/23606750-fff028-reputation-management
No date – Diagram describing how the proposed Almas Global Opportunity Fund “investment mechanism” between “KT,” Almas, and Sotic would work, enabling them to carry out the transaction with ASA Resources.
https://www.documentcloud.org/documents/23606741-fff010-almas-sotic-kt-deal
10 October 2019 – Diagram describing how the proposed Almas Global Opportunity Fund “investment mechanism” between “Investor,” Almas, and Sotic would work, enabling them to carry out the transaction with ASA Resources.
https://www.documentcloud.org/documents/23606745-fff016-sotic-_asa-payment
5 December 2019 – Message from Kundomal to Fourie about Kundomal’s consultation with Tagwirei over the timing of any changes to Sotic’s shareholding structure and whether Duff & Phelps would have to redo their know your customer (KYC) exercise.
https://www.documentcloud.org/documents/23606746-fff018-whatsapp-image-2022-04-29-at-125659-pm
31 December 2019 – Message from Kundomal requesting that Fourie confirm with Tagwirei whether Fourie can transfer $1,000 out of Sotic.
https://www.documentcloud.org/documents/23606747-fff019-whatsapp-image-2022-04-29-at-125713-pm-1
Almas Global Opportunity Fund
14 October 2019 – Kudakwashe Tagwirei’s subscription to the Almas Global Opportunity Fund.
https://www.documentcloud.org/documents/23606742-fff011-kt-subscription
22 October 2019 – Debenture subscription agreement between Sotic International and Almas Global Opportunity Fund.