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How Moti moved his millions

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Nick Donovan, The Sentry

After a $120 million mining deal that led to a payout to President Mnangagwa’s farm in 2017, South African chrome tycoon Zunaid Moti used a fraud-ridden bank and accounts linked to a convicted gold smuggler to move $44 million out of Zimbabwe, records show.

In addition to the $1 million paid to Mnangagwa’s Pricabe Enterprises, Moti’s chrome deal  also resulted in a $2 million payment to a shell company controlled by Vice President Chiwenga’s associates.

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As Moti’s proceeds from the deal were stuck in Zimbabwe due to strict currency controls, he turned to the foreign exchange black market.

Some of the funds went through accounts linked to gold smuggler Ewan Macmillan at South Africa’s VBS Mutual Bank, which collapsed shortly after following a massive fraud.

Even Moti’s own staff worried about whether the transactions broke exchange controls.

Following media questions about whether Moti’s 2017 deal — signed with crony businessman Kudakwashe Tagwirei during the middle of the week-long ‘military-assisted transition’ — was linked to the coup, Moti’s team met in August 2022  to discuss their answers.

Moti’s legal advisor was recorded saying the claim was “absolutely false.”

But leaked audio revealed their concerns that providing information about the deal could draw attention to efforts taken to move profits out of Zimbabwe.

Explaining the money flows would “open another can of worms,” said the advisor. “He might just go, ‘Oh look at these exchange control contraveners’.”

She was right to be worried.

Financial records show how funds flowed out of the Moti group in Zimbabwe and flowed back underground to the Moti group in South Africa.

Dollars flowed out of the Moti group in Zimbabwe

On 30 November 2017, soon after Tagwirei’s firm, Sakunda Holdings, agreed to pay $120 million to a Moti shell company, Spincash Investments, for its 30% share in  African Chrome Fields, Moti’s team signed a contract with a short-lived bureau de change called JayT Global.

On paper ACF lent millions to JayT, although the exchange bureau also instructed Moti’s firm to pay unrelated third parties. At JayT’s behest ACF paid over two dozen Zimbabwean firms and individuals.

As Tagwirei’s money flowed in over several months, ACF paid tens of millions of RTGS dollars to firms which shared directors with JayT and ghost companies whose records are missing from the registry.

Those JayT directors included Zimbabwean businessmen Patrick Chinondo and Simon Winskill.

ACF’s contract with JayT had a number of strange features. Despite ACF lending millions to JayT, a five month  old company with little track record, records do not show that any collateral was required and, according to the paperwork, there was no detailed term sheet setting out repayment dates. 

The contract anticipated JayT making advances to third parties using ACF funds, yet it did not specify any credit checks or due diligence into whether the recipients were appropriate borrowers. Many payments predated the signature date, before the contract was in force.

The payments were loans, say the Moti group, “ACF/Spincash utilized the purchase price received from Sakunda to invest in Zimbabwean operations and opportunities in order to protect the value of the proceeds from depreciating currency.”

Chinondo’s explanation for the transactions described them more as part of a parallel payment system, rather than loans: “Highly likely we asked ACF to make direct payments to these suppliers for one of the following reasons: suppliers request for immediate clearance of funds so they do not make losses in price changes since it was a hyperinflation period.”

While it was Chinondo who signed the ACF contract, it identified a South African businessman nicknamed Joe Dollars as the person to contact should anything go wrong.

Rands flowed back into the Moti group in South Africa

As millions of dollars poured out of the Moti group in Zimbabwe, hundreds of millions of rands simultaneously began to flow back towards the Moti group in South Africa, in the guise of loans and a share purchase.

Moti denies that the transactions were linked. However, Joe Dollars also played a role in the South African contracts.

Joe Dollars, whose real name is being withheld, claims to own gold mines in Zimbabwe, South Africa and Mozambique. He denies  being known as Joe Dollars, although others in the illicit forex trade recognise him and his mobile number is listed with at least 15 variations of “Joe Dollars” or “Joe $” in an app which reveals how a person’s name is recorded in others’ phone contact books.

Joe Dollars guaranteed loans totalling $25 million  from a small Johannesburg-based logistics firm, Ultra Trading 014, to thirteen Moti property companies in South Africa. Later, in mid 2018, all the loans were cancelled and the value outstanding was converted into a downpayment (and topped up with another $20 million in cash) for a share purchase in which Ultra Trading 014 bought 40% of a Moti group firm, Afrique Chroma, for $44 million.

Both the loan and share purchase contracts anticipated that funds would be arriving in the Moti group’s bank accounts from third parties. Joe Dollars’ role as guarantor was to ensure that they received payment and to smooth out any problems such as a third party asking for their funds back.

The money flowed underground, linked to the illicit gold trade

Some of the funds paid to Moti’s firms came from shell companies – Caydees Import and Export, Caylons Goods and Services and Taintons Goods and Services – with accounts at VBS Mutual, a South African bank that regulators shut down in 2018.

For example, VBS records show that in December 2017 Caydees and Taintons paid R16.3 million ($1.2 million) in small amounts  to Moti’s 7 Vlok Road Bryanston Pty at the behest of JayT Global. The dates and amounts of these transactions match details found in Moti group legal documents listing payments guaranteed by Joe Dollars.

At the time VBS was in desperate need of new deposits as it was being looted by executives in a ponzi-like fraud that regulators later described as ‘The Great Bank Heist.’

Someone with knowledge of the matter claimed the shell companies’ VBS accounts were run from Zimbabwe by men involved in the foreign exchange black market, including someone closely connected  to Ewan Macmillan, a convicted gold smuggler.

Macmillan’s notoriety increased recently after telling undercover Al Jazeera reporters in the Gold Mafia documentary, “There is an opportunity, a hell of a big opportunity, to wash money here.”

According to VBS auditors , the shell companies received some of their funds from a South African refinery suspected by authorities  of laundering illicit gold, including ore smuggled from Zimbabwe.

Only a small proportion  of the US$44 million in payments guaranteed by Joe Dollars flowed through VBS, although enough to cause concern among experts.

“When viewing the evidence in its entirety, the nature, timing, and parties to the payments in Zimbabwe and in South Africa all suggest a strong possibility that these transactions served the purpose of moving large sums of money from Moti group companies in Zimbabwe to Moti group companies in South Africa,” said a spokesperson for Open Secrets, a South African non-profit specializing in exposing economic crimes. The details of the transaction “raise a serious question of whether exchange control violations may have taken place.”

Corruption Watch, another South African watchdog, said the matter “merits a dedicated law enforcement investigation.”

The timing of the transactions should also raise eyebrows.

The JayT contract was signed on 30 November 2017. Two days earlier Mnangagwa had condemned capital flight by referencing the military operation which had just brought him to power.

“Activities linked to Operation Restore Legacy have helped to uncover cases where huge turns of money and other assets were illegally externalized by certain individuals and corporates” said Mnangagwa. “Such malpractices constitute a very serious economic crime against the People of Zimbabwe which the Government of Zimbabwe will never condone.”

ACF paid Mnangagwa’s farm, Pricabe Enterprises, $1 million on 5 December 2017 and sent $1 million to Cosmotex Investments, linked to Chiwenga, on 19 December 2017. The Moti group describes the payments as investments or loans , while JayT’s director Chinondo says he is not familiar with Pricabe or Cosmotex, “If ACF allocated them to our contracts it’s a mistake they are not ours and we have no record of ever asking for these payments on our behalf.”

The Moti group, Patrick Chinondo, and Simon Winskill all deny any wrong-doing. President Mnangagwa, Vice President Chiwenga, Chiwenga’s associates, Macmillan, Tagwirei, Cosmotex and Pricabe did not respond to requests for comment. A member of Macmillan’s family said the VBS accounts were “nothing to do with us.” Joe Dollars denies any knowledge of the transactions. Moti’s legal advisor denies any conversation about exchange control contraventions took place. Imraan Mia Ismael, the owner of Ultra Trading 014, denied doing any business with Moti.

*Note: This investigation was undertaken in partnership with amaBhungane.

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