Mnangagwa’s penchant for dodgy companies astonishing
PRESIDENT Emmerson Mnangagwa’s appetite for opaque deals from shady shelf companies and dodgy businesspersons was once again brought into the spotlight this week after British-registered Coven Energy Limited was awarded a US$1.3 billion deal to build Zimbabwe’s second fuel pipeline.
Revelations that the company was incorporated on 25 August last year, with assets amounting to £100, only to be awarded such a big deal, has resulted in growing belief that the company was formed specifically to be awarded the deal.
Coven Energy’s name has been added to the list of foreign companies awarded massive projects with no traceable track record.
Since Mnangagwa took over power in a coup that toppled the late former president Robert Mugabe in 2017, many of the companies that have signed mega deals have either been connected to the President, his family or cronies in government.
Nothing much has come out of the deals partly because of the questionable track record of investors involved.
During the start of his tenure, Mnangagwa claimed he had clinched US$11 billion worth of business commitments, the bulk of which were murky deals, spearheaded by dodgy characters.
Some of the deals Mnangagwa clinched in the “New Dispensation” involve controversial business characters, including Zunaid Moti, Lucas Pourolis and Jacco Immink.
In 2018, Moti reportedly invested US$300 million to set up a chrome extraction and processing plant in Zimbabwe along the mineral-rich Great Dyke.
During that time, Moti was arrested in Germany on charges that he defrauded his former business partner Alibek Issaev an estimated US$35 million in a sham mining deal in Lebanon in 2013.
In June that year, Mnangagwa’s crony Pourolis signed a controversial US$4.2 billion deal with the government, paving way for his investment vehicle Karo Resources to grab mineral claims stretching over 23 903 hectares previously held by Zimplats along the Great Dyke.
The US$4.2 billion cost had been plucked out of thin air, raising questions over the value of the investment. The Pourolis family holds a 42% stake in Tharisa Plc, which has only managed to mobilise US$8 million for the implementation of the platinum project.
In 2005, Pourolis made a fortune after acquiring South Africa’s Impala Platinum subsidiary Elandsfontein Platinum Project for US$15 million, before selling it two years later for US$1.1 billion to Xstrata in a speculative deal.
Karo Resources is a company registered in Cyprus and Guernsey, a tax haven blacklisted by the European Union.
Again, that year, an obscure South African company, Nkosikhona Holdings, signed a massive US$5.2 billion deal with government to transform coal into fuel, before cashing in on the mineral resource after roping in Canadian consortium Magcor International to implement the project.
The South African company, which was registered in 2013 and has a questionable track record, signed the deal with the government through Verify Engineering Private Limited — an agent of the Higher Education ministry — in May.
At that time, the deal raised questions over Nkosikhona’s technical and financial suitability to execute the project.
The company had not undertaken any major infrastructural projects.
The obscure company later cashed in on the Lisulu coal deposits in Hwange, Matabeleland North, after roping in Canadian consortium Magcor to implement the project modelled along the lines of South Africa’s Sasol Limited.
Nkosikhona cashed in by bringing on board Magcor to fund the project in a capital-for-equity deal, which has seen the Canadian consortium taking over. The deal meant that Nkosikhona basically played the role of facilitator between Verify and Magcor before reaping huge rewards.
As a result, a new entity, Vectol Zimbabwe, was created to implement the project. Magcor is the major shareholder in Vectol, while Nkosikhona and Verify will not have significant roles.
There were questions over the technical capacity, track record, financial ability and suitability of Nkosikhona and Verify to implement the project, considering that none of the companies have undertaken major infrastructure projects of a similar nature.
There were also questions over whether the government had thoroughly assessed the technical suitability of Nkosikhona, a company which was only registered in 2013 under registration number K2013/011831/07.
Its directors are Immink and Caroline Makhoro, who was once swindled R120 000 in a botched transport deal in South Africa.
The credibility and reputation of Immink and Makhoro were also under scrutiny.
Mnangagwa’s flirtation with controversial businessmen and companies also continued in 2019, with the government misleading the nation that a “British beef giant” Boustead Private Limited would inject US$130 million towards the revival of the Cold Storage Company (CSC).
It however emerged that the purported beef giant was, in fact, an agricultural start-up company with a small balance sheet.
The government had announced that the firm would assume control over the moribund CSC for 25 years in a multi-million-dollar deal.
Further checks revealed the government had misled the public on the CSC deal. Boustead (Pvt) Ltd is not a UK company.
Boustead (Pvt) Ltd is actually a local start-up owned by Nick Havercroft and only commenced operations in 2013.
The local firm operates under registration number 4852/2013 as recorded by the Companies Registry.
In the UK, there is Boustead Agriculture, registered under number 08154075 and is domiciled at 78-80 St John Street, London, England, EC1M 4JN. It was only set up by Boustead (Pvt) Ltd founders to raise money for the CSC deal.
According to details filed at the Companies House, Boustead (Pvt) Ltd, whose interest is “growing of vegetables and melons, roots and tubers and mixed farming”, had a paltry £10 000 in its books of accounts at the time the deal was announced, raising doubt around its capacity to mobilise millions of dollars required to resuscitate the debt-ridden state-owned meat processing enterprise.