Kudakwashe Tagwirei vast business empire unmasked
SET well back from the public road at the end of a long driveway lined with palm trees is an extravagant new mansion being built by Kudakwashe Tagwirei, a Zimbabwean businessman and presidential advisor accused of corruption.
Much like this Harare residence, Tagwirei's business empire
of more than 40 companies has mostly been hidden from the public eye.
By analysing hundreds of company documents, court filings,
and communications, The Sentry's investigation shows how Tagwirei used complex
corporate structures to build and hide his wealth, potentially benefiting from
preferential government treatment along the way.
Tagwirei has invested in gold, nickel, platinum, and chrome
mines by hiding behind South African businesspeople and offshore structures in
Mauritius and the Cayman Islands and by using lawyers and financiers who are
seemingly happy to turn a blind eye to accusations of cronyism and corruption.
New documents uncovered by The Sentry also show how Tagwirei
has used similar networks to hide his financial interests in Zimbabwe's new
public-private partnership mining company, Kuvimba Mining House, with
Zimbabwe's Finance ministry reportedly collaborating to deflect public scrutiny
from these arrangements.
In 2019, Tagwirei paid millions of dollars to a Zimbabwean
military-owned company so that Landela Mining Ventures, a company he
controlled, could purchase 50% of Great Dyke Investments (GDI), a platinum mine
worth hundreds of millions and run as a joint venture with a Russian firm.
The payment raises fears about off-budget financing of
Zimbabwe's abusive and partisan military. An examination of Tagwirei's business
track record reveals a pattern of accusations of privileged access and special
treatment, some of which may warrant further investigation by regulators and
law enforcement.
On January 27, 2021, over a year after Landela Mining
Ventures had bought half of the platinum mine, Zimbabwe granted GDI a five-year
corporate income tax holiday and exempted its shareholders resident in Zimbabwe
from resident shareholders' taxes on GDI dividends—retroactively applied to
January 1, 2020.
Auditors investigating corruption red flags in a 2016 US$630
million diesel generating plant contract found that the Office of the President
had improperly interfered with the procurement process, ordering officials to
evaluate Tagwirei's sole bid outside the standard process.
Other decisions worthy of further investigation include
allegations of preferential access to hard currency and the appointment of
Tagwirei's oil trading company, without a tendering process, to run a US$1
billion dollar agriculture project.
In addition to alleged business dealings with the Zimbabwean
military, Tagwirei appears to have the ability to contact senior civilian
officials in Zimbabwe at short notice, particularly at the Reserve Bank of
Zimbabwe.
Such high-level access, together with the pattern of
previous decisions, raises the possibility of state capture, when the public
realm—particularly regulatory, legal, and public policy decision-making—has
been influenced to benefit private interests. Senior officials at Tagwirei's
companies have denied state capture.
The operations of Tagwirei's network are emblematic of
larger structural problems in Zimbabwe.
A select group of politicians, the military, and
businesspeople dominate government decision-making with little oversight or
scrutiny. Key information about public finances remains shrouded in secrecy.
An environment of impunity prevails. Left unaddressed, these
dynamics will likely become further entrenched.
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