Zim company named in probe

Panama Papers point to alleged exchange control and tax evasion

A LEADING Zimbabwe company with South African connections has been named in the explosive Panama Papers as allegedly having set up an offshore company to pay executive salaries.

Zimplats Holdings‚ which is linked to South African mining company Implats, allegedly set up the offshore company without the knowledge of the Reserve Bank of Zimbabwe and so breached the country’s exchange control laws.

The allegations are now being investigated in detail by a Voice of America (VOA) radio station team.

According to documents leaked to German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists (ICIJ)‚ HR Consultancy was allegedly set up for the sole purpose of receiving funds and remunerating Zimplats’ senior managers.

According to internal data, the offshore provider was Northern Wychwood, which registered HR Consultancy in the Isle of Man and sought the services of Panama-based lawyers Mossack Fonseca to facilitate the registration.

The documents say the shareholders and directors at HR Consultancy are corporations and the senior managers to be paid by HR Consultancy are Zimbabweans.

However‚ the names of the supposed recipients were not listed‚ nor the amount of money allegedly paid to the managers over the years.

It was also not clear how the funds were to be channelled to the offshore company.

But it was on record that Northern Wychwood continues to update HR Consultancy’s certificate of incumbency‚ with the latest filing having been done with Mossack Fonseca last year.

Zimplats denied having a relationship with HR Consultancy or Northern Wychwood.

A senior corporate lawyer who spoke to VOA’s Studio7 said on condition of anonymity the fact that Northern Wychwood continued to pay fees to Mossack Fonseca meant HR Consultancy was still doing the work it was established to do.

An expert on banking practices in Zimbabwe‚ who also requested to remain anonymous‚ said that if the allegations were true Zimplats would have been illegally externalising money and dodging paying taxes on the part of its Zimbabwean managers.

Zimbabwe Central Bank governor John Mangudya said any company using such practices would be in blatant violation of exchange control policy, which was a punishable offence.

A Mossack Fonseca spokesman refused to comment.

Contacted for comment, Zimplats corporate affairs head Busi Chindove said Zimplats had no relationship with the companies listed.

Johannesburg-based Implats owns 87% of Zimplats.

Implats spokesman Johan Theron said: “We don’t subscribe to the use of such services at all.”

A recent central bank report claimed Zimbabwe lost $3-billion (R44-billion) through illicit financial flows between 2009 and 2012. Africa lost $3-trillion (R44-trillion) in illicit financial flows during the same period.