Bloomberg reports that weeks after Kudakwashe Tagwirei was sanctioned by the U.S., his Mauritius-based Sotic International Ltd. began planning to shift its assets to a newly created Zimbabwean holding company — Ziwa Resources Ltd.
Ziwa is the only private shareholder in the partnership, called Kuvimba Mining House Ltd, a private company registered in Zimbabwe in September 2020.
Kuvimba is 65 per cent held by the state and 35 per cent by Ziwa.
In June, Finance Minister Mthuli Ncube announced that Kuvimba had paid a dividend of US$5.2 million to state agencies, including one charged with compensating White farmers for land seized two decades ago.
According to documents seen by Bloomberg, David Brown, chief executive officer of both Sotic and Kuvimba as of June, told Sotic’s shareholders one month before Ziwa was founded, that Mauritius was increasingly being seen as a tax haven.
He also argued that moving the company’s assets to a Zimbabwean subsidiary would encourage “local co-investment” in mines that needed “significant capital investment,”
Brown told them that restructuring the company was necessary to address “the negative press the company has been subjected to over the past weeks.”
He said that Mauritius had been included in the G7 countries’ Financial Action Task Force’s grey list, which forces strict monitoring to combat money laundering and had also been blacklisted by the European Union. Brown said:
Management is proposing to the shareholders that they create a subsidiary in Zimbabwe, and proceed with a restructure of the ownership of the company’s assets such that the Zimbabwean assets are held by a Zimbabwean holding company.
In conversations with Bloomberg in July, Brown said he’s also a director of Ziwa but doesn’t know who its shareholders are.
Brown also confirmed that assets held by Mauritius-based Sotic are now part of Kuvimba but declined to comment further.
While Zimbabwe government officials have repeatedly denied that Tagwirei has any connection to Kuvimba, Bloomberg in May reported that Kuvimba holds assets that were until at least late last year part-owned by Tagwirei.
The publication cites company documents, emails and transcripts of Whatsapp conversations between executives as proof.
The government has as recently as July declined to say how Kuvimba came to possess the assets, which include choice mineral deposits and mines that it says are worth $2 billion.
The sanctions also prohibit U.S. citizens from doing business with him, and his assets in the U.S. are frozen and must be reported to the U.S. Treasury.