GLOBAL commodities giant Glencore, one of the world’s largest diversified natural resource companies, currently engulfed in a corruption and bribery storm in the United States, Britain and Brazil, has a big footprint in Zimbabwe.
BERNARD MPOFU
It has been involved in fuel and coal businesses in the country.
Scandal-ridden Glencore’s big footprint in Zimbabwe
Prominently, Glencore was embroiled in the controversial Zuva Petroleum-Masawara Plc US$30 million deal about a decade ago. The transaction, funded by Glencore, involved the purchase of Zuva Petroleum assets from Masawara by a company owned by John Mushayavanhu.
Woble Investments, owned by Mushayavanhu, banking group FBC Holdings chief executive and his wife, bought the assets from Masawara, which were initially owned by BP & Shell before it rebranded to Zuva Petroleum.
After that, London-listed Masawara transferred its 51% stake in Masawara Energy Mauritius Limited (MEM) to Woble.
MEM is registered in Mauritius and is the controlling shareholder of Zuva Petroleum.
However, market watchers said Masawara never owned the Zuva shares in the first place and that it was a front for Glencore, which funded the purchase and was again the financier of Woble’s purchase of the same shares.
The intricate deal also involved Strauss Logistics and Zanu PF associate Ketani Joshi, who has an interest in Strauss. Joshi also had an interest in FBC led by Mushayavanhu, a bank he helped found.
Some top local politicians were also linked to the deal.
Mushayavanhu, one of President Emmerson Mnangagwa’s corporate allies, at the time said he was not a shareholder in Strauss and the company had no equity interest in Zuva as it was only a service provider.
A National Indigenisation and Economic Empowerment Board report then said Masawara “never owned” the former BP & Shell assets purportedly sold to it, insisting Alveir purchased the assets.
Alveir is one of several financing arms of Glencore based in the British Virgin Islands.
“The real owners are and will remain Alveir, and now Glencore Holdings. Woble is merely a front,” the report said.
However, Mushayavanhu insisted that he was not a front for Glencore, but had only secured money for the deal from them.
Besides being entangled in the sale of BP & Shell assets in Zimbabwe, Glencore sells fuel to Zimbabwean suppliers and others in the region on the high seas. It is thus a major player in the Zimbabwean fuel market.
Six major oil-importing entities, including the Indigenous Petroleum Association of Zimbabwe, Zuva Petroleum, Puma Energy (Trafigura), Total Zimbabwe, Petrotrade (Pvt) Ltd, Genesis Energy and Engen Petroleum Zimbabwe service the cumulative daily fuel requirements of 4.1 million litres of diesel and 3.1 million litres of petrol in the local market.
Glencore supplies Zuva, which the market insists it owns despite some front faces involved.
Apart from fuel, Glencore was also in mining activities in Zimbabwe. A few years ago, it signed an agreement to buy coke and coke products from Hwange Colliery.
Given its wide footprint in Zimbabwe, issues about Glencore are of public interest locally, including its seemingly endless scandals. The local market a proximity of interest in its affairs.
After its latest scandal in the United States, Glencore says it has reached deals with authorities in the three countries to resolve corruption issues in return for penalties totalling up to US$1.5 billion.
The Anglo-Swiss company said this week it will pay US$700 million to resolve a US bribery investigation and a further US$486 million in connection with allegations of market manipulation.
Glencore says about US$166 million in fines agreed with the US authorities will be credited to a parallel probe by the UK Serious Fraud Office, where it has indicated that it will plead guilty to bribery at a hearing next month.
Separately, the company is paying US$40 million to resolve a bribery probe in Brazil.
After surviving a near-death experience in 2015, Glencore stocks were riding high on world markets: the company posted its best-ever results in 2018.
One reason is its dominance of supplies of cobalt, an essential mineral used in batteries for smart phones and electric cars. Cobalt prices are soaring, and Glencore controls supply through massive operations in the Democratic Republic of Congo.
The US Department of Justice said its case against the company related to “a decade-long scheme by Glencore and its subsidiaries to make and conceal corrupt payments and bribes” to foreign officials in Africa and Latin America.
“The scope of this criminal bribery scheme is staggering,” US Attorney Damian Williams for the Southern District of New York was quoted as saying. “Glencore paid bribes to secure oil contracts. Glencore paid bribes to avoid government audits. Glencore bribed judges to make lawsuits disappear.”
Glencore paid bribes to a web of its networks to make money – hundreds of millions of dollars.
