financing a parallel government zimbabwe€¦ · Development (Pvt) Ltd, registered in Zimbabwe; Sino Zimbabwe Development (Pte) Ltd, registered in Singapore, and Strong Achieve Holdings

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FINANCING A

PARALLELGOVERNMENT?

The involvement of the secret police and military inZimbabwe’s diamond, cotton and property sectors

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Executive Summary

This report reveals how Zimbabwe’sfeared secret police, the CentralIntelligence Organisation (CIO), appearsto have received off-budget financingfrom Sam Pa, a businessman based inHong Kong; and how members of theCIO are directors of a group ofcompanies, Sino ZimbabweDevelopment*, registered in Zimbabwe,Singapore and the British Virgin Islands.

Several well informed sources have toldGlobal Witness Sam Pa (AKA AntonioFamtosonghiu Sampo Menezes, XuJinghua and Sam King) holds leadershippositions in a network of companiesknown as the Queensway syndicate. Thesyndicate was the subject of a detailedstudy by the Economist in 2011. Thisstudy concluded that syndicate has atrack record of opaque ‘resources forinfrastructure’ deals across sub-SaharanAfrica. Despite the official soundingnames of its companies, such as ChinaInternational Fund and AfricaDevelopment Corporation, the syndicateis largely owned by private Hong Kongbusiness interests. Until recently someof the key companies, such as ChinaSonangol International Ltd, were alsopartly controlled by a leading Angolanpolitician, Manuel Vicente, the formerhead of Angola’s state oil companySonangol. Finally, the Economisthighlighted that two companies in thesyndicate, China Sonangol International(S) Pte Ltd and CIF Singapore Pte Ltd,are noted for an ethically dubious dealwith the Guinean military junta in 2009,

signed just weeks after security forceskilled over 150 protestors and raped over100 women in a stadium.

This briefing extends the Economist’sanalysis of the Queensway syndicate’sactivities in Zimbabwe. Several reliablesources within the secret police havepassed information to Global Witnessdemonstrating how Sam Pa appears tohave provided a significant sum ofmoney, said by one CIO document seenby Global Witness to be $100 million, tothe CIO. The same sources,corroborated by another source withfirsthand knowledge of the deal, alsodescribe how Sam Pa provided 200Nissan pick-up trucks to the CIO. Inreturn, Sam Pa received diamonds andaccessed business opportunities in thecotton and property developmentsectors. As figure 1 shows we also usecompany registry records and sourceswithin the secret police to identify threeZimbabwean directors (Gift KalistoMachengete, Pritchard Zhou andMasimba Ignatius Kamba) of SinoZimbabwe Development in Zimbabwe,Singapore and the British Virgin Islandswho are members of the CIO, and whichwe therefore believe to be companieswhich are controlled in part by membersof the Zimbabwean secret police. GlobalWitness invited Sam Pa and the directorsof Sino Zimbabwe Development tocomment on our findings, and they havenot done so.

There are three reasons why thesedevelopments are of concern.

* In this document we refer to ‘Sino Zimbabwe Development’ as shorthand for three companies: Sino ZimbabweDevelopment (Pvt) Ltd, registered in Zimbabwe; Sino Zimbabwe Development (Pte) Ltd, registered in Singapore, and StrongAchieve Holdings Ltd, registered in the British Virgin Islands. In the Zimbabwean media and other public sources there arealso occasional references to Sino Zimbabwe Holdings (Pvt) Ltd and Sino Zimbabwe Cotton Holdings (Pvt) Ltd, but there isno record of these companies at the Zimbabwean company register. We have been informed by reliable sources that theseunregistered companies are in effect the same company as Sino Zimbabwe Development (Pvt) Ltd – assertions backed bythe fact that Jimmy Zerenie, a known director of Sino Zimbabwe Development (Pvt) Ltd, represented Sino ZimbabweHoldings (Pvt) Ltd in the media during a cotton dispute in 2010. Finally it should be noted that ‘Sino ZimbabweDevelopment’ is unrelated to other companies with similar names: Sino Zim Cement Company (SZCC), registered inZimbabwe, and Sino-Zim Mining Corporation Ltd and Sino-Zim Mining Resource Company Ltd, both registered in Hong Kong.In this document any reference to ‘Sino Zimbabwe’ or ‘Sino Zimbabwe Development’ should be taken to mean companieswith connections to the Queensway syndicate rather than SZCC, Sino-Zim Mining Corporation Ltd or Sino-Zim MiningResource Company Ltd.

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First, by its very nature any off budgetfinancing for the secret policeundermines democratic processes andinstitutions in Zimbabwe. Off budgetfunding subverts civilian and democraticcontrol of the CIO, and allows the secretpolice to set, and fund, its own agenda.Second, Sam Pa’s likely financial supportfor the CIO may undermine Zimbabweandemocracy more directly. According totwo sources, one senior Zimbabweangovernment official and one sourcewithin the CIO, the secret police isengaged in ‘Operation Spiderweb’, covertactivities designed to discredit seniorfigures from the opposition Movement for

Democratic Change (MDC) includingPrime Minister Morgan Tsvangarai,Finance Minister Tendai Biti, and IndustryMinister Welshman Ncube. According tothe single source within the CIO Sam Pa’smoney was allocated specifically toOperation Spiderweb. However, by theirvery nature, such claims about secretintelligence agencies are difficult to verifyand should be treated with caution.Third, members of the CIO have beenrepeatedly identified as perpetrators ofviolence in the recent past, and thereforeSam Pa’s apparent material assistancemay fund future human rights abuses inthe run up to the forthcoming election.

Figure 1: Ownership structure of Sino Zimbabwe Development group and Sino ZimDiamond Ltd (see annex 2 for details).*

Key - companies controlled in part by CIO members

JimmyZerenie

Gift KalistoMachengete

AleroLtd

(BVI)

Goal AchieveHoldingsLtd (BVI)

China InternationalFund Ltd (HK)

New Bright Int’l Dev Ltd (HK)

Dayuan Int’l Development (HK)

Wu YangBeijing Tian Qiao CulturalDevelopment Company (HK)

Lo Fong Hung Veronica Fung Yuen

Sino Zim Development (Pvt)(Zimbabwe)

Directors:Lo Fong HungVeronica Fung YuenJimmy ZerenieGift Kalisto MachengetePritchard Zhou

Sino Zim Development Pte(Singapore)

Directors:Masimba Ignatius KambaLo Fong HungAlain Fanaie (joined late 2011)*

Sino Zim Diamond Ltd(Hong Kong)

Directors:Eliezer NefussyJimmy Zerenie

MIL Company Ltd(HK)

Directors:Lo Fong HungMoshe Hallak

Transferred$50m to

Owns30%

Owns49%

Owns51%

Owns80%

Owns20%

Owns50%

Owns50%

Strong AchieveHoldings (BVI)

Authorisedsignatory:Masimba IgnatiusKamba

Owns30%

Star DelightHoldings (BVI)

Authorisedsignatory:Lo Fong Hung

Owns70%

Owns30%

Owns0.0001%

Owns70%

Owns69.9999%

Owns1% Owns 99%

Holds

Directors:Veronica Fung YuenLo Fong Hung



* Alain Fanaie only joined Sino Zimbabwe Development Pte, and other companies in the Queensway syndicate, in late 2011,after the events described in this report.

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Anjin is likely part-owned and part-controlled by the Ministry of Defence

This report also revisits earlier GlobalWitness research into a large diamondmining company, Anjin Investments (Pvt)Ltd. Our last report established thepartial control exercised by figures fromthe Zimbabwean military, police andMinistry of Defence over the firm’sexecutive board. This current briefingreports the results of research intoAnjin’s ownership. Zimbabweancompany records reveal that a seniormilitary lawyer in the Ministry of Defenceholds 50 per cent of Anjin’s shares.Together with factors such as thepresence of the Permanent Secretary ofthe Ministry of Defence on Anjin’sexecutive board, these company recordshave led Global Witness to conclude thathalf of a large diamond mining companyis likely part-owned and part-controlledby the Zimbabwean Ministry of Defence,military and police.

The MDC Finance Minister has statedthat the Treasury has not received anyrevenues from Anjin. Global Witness hasreceived copies of receipts from Anjin forpayments to other government bodiesbut not the Zimbabwe Revenue Authorityand we conclude that the FinanceMinister’s claim is plausible. This leavestwo possibilities: that Anjin has usedrevenues earned so far to recoupsignificant capital expenditure, or thatrevenues have been diverted to thecompany’s part owners in the militaryand police. Anjin is a large diamondmining company. It claims to be theworld’s largest, and a well informedindustry observer has told us that, interms of size, Anjin could be “the next DeBeers”. If these claims are true, thenone explanation is that significant sumsof money could flow to the Zimbabweanmilitary.

Key RecommendationsGlobal Witness believes that the activities of Sam Pa, Sino Zimbabwe Development (Pvt) Ltd andAnjin Investments (Pvt) Ltd should be investigated by relevant authorities to see if their actionsundermine Zimbabwean democratic institutions or risk funding future human rights abuses andtherefore meet the threshold for being placed on targeted sanctions lists.

The MDC Finance Minister, when discussing Anjin, feared that “there might be a parallelgovernment somewhere in respect of where these revenues are going.” This is a seriousaccusation, with profound consequences for Zimbabwe’s Government of National Unity. TheSouthern African Development Community (SADC) plays an active role in mediating the politicalprocess in Zimbabwe. SADC facilitators should give the problem of off-budget financing ofsecurity forces a high priority in forthcoming negotiations, with the aim of securing democratic,civilian control over the budgets for the security services. It may also be necessary for SADC toappoint an expert panel to investigate these claims.

Reform of Zimbabwe’s partisan security forces requires democratic and civilian control of theirbudgets. Zimbabwe’s Government of National Unity (GNU) should pass legislation banningserving and recently retired members of the military, police, the CIO and other members of thesecurity services from control over, or beneficial ownership of, mining companies.

Consumers should not buy diamonds originating from Zimbabwe’s Marange mines until they canbe certain they will not fund the Zimbabwean secret police, military and police. Companiesshould conduct due diligence investigations into the source of their rough diamonds. OECDmember states should ask the OECD to work with industry and other interested parties to drawup supplementary guidance on how supply chain due diligence could operate in the diamondssector.

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1. Background

ZANU PF may use violence to winZimbabwe’s next election, due by 2013

ZANU PF, which for many years has beenthe governing party in Zimbabwe, hasrepeatedly used violence as a politicalstrategy. The fear of dissent, whetherreal or imagined, lay behind thegovernment’s ‘Gukurahundi’ campaignfrom 1982 to 1987, which killed anestimated 10,000 to 20,000 people. 1

During the last dozen years partisansecurity forces and ZANU PF supportersused intimidation and abuses in the2000, 2002 and 2008 elections. Theviolence in 2008 used against civil societyand supporters of the oppositionMovement for Democratic Change (MDC)was particularly intense. The organizedcampaign involved widespread andsystematic abuses, which “led to thekilling of up to 200 people, the beatingand torture of 5,000 more, and thedisplacement of about 36,000 people,”and was perpetrated by, among others,members of the ZANU PF-controlledsecurity forces.2

Security forces sought off-budgetsources of funding after the MDC tookcontrol of the Ministry of Finance

After the 2008 election, and followingmediation by the Southern AfricanDevelopment Community (SADC), aGovernment of National Unity wasformed. ZANU PF retained control of keysecurity ministries such as the President’sOffice (responsible for the CentralIntelligence Organisation), Defence, andthe Ministry of Mines and MiningDevelopment. The MDC took control ofthe Prime Minister’s office and theMinistry of Finance. The loss of controlof the Ministry of Finance set the stagefor a behind-the-scenes struggle forsources of off-budget financing forpartisan security forces, loyal to PresidentMugabe and ZANU PF.

For example, as can be seen from theletter below, in 2010 the CommissionerGeneral of the Zimbabwe Republic Police(ZRP), using the name of Security SelfReliance Enterprises (Pvt) Ltd, applied fora concession in the diamond mining fieldsof Marange.3 While this particularrequest was not granted, two other jointventure companies were established:

- Sino Zimbabwe Development(Pvt) Ltd, with interests in diamonds,cotton and property, was established in2009. Section 2 of this report sets outevidence to support our belief that thiscompany was set up to provide off-budget financing for Zimbabwe’s secretpolice, the Central IntelligenceOrganisation (CIO).- Anjin Investments (Pvt) Ltd, alarge joint venture diamond miningcompany, was established in December2009. Although Anjin was the subject ofGlobal Witness’ last briefing4 onZimbabwe, in section 3 we expand ouranalysis of the company and set outevidence to support our belief that Anjinwas set up to provide off-budget fundingfor the Zimbabwean military and police.

Figure 2. Request for Marangeconcession for the Zimbabwean Police

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2. Off-budget funding of the CIO?This section first describes theorganisational structure of the CIO, andits close relationship with the Office ofthe President. Second, we allege thatthree Zimbabwean directors of SinoZimbabwe Development are members ofthe CIO. Third, we describe allegationsthat a Hong Kong businessman namedSam Pa provided a large sum of money,and two hundred vehicles, to the CIO.Fourth, we describe how off-budgetfinancing undermines Zimbabwe’sdemocratic institutions and we raise thepossibility that any financial and materialassistance provided to the CIO couldfund future human rights abuses. Finallywe argue that the information providedto Global Witness justifies theinvestigation of Sam Pa and SinoZimbabwe Development (Pvt) Ltd to seewhether they should be placed oninternational sanctions lists.

The Central Intelligence Organisationlies within the Office of the President

The Central Intelligence Organisation isZimbabwe’s intelligence agency - or‘secret police’. It is a violentorganisation, loyal to the President ratherthan Zimbabwe’s Government of NationalUnity. It has its roots in the colonialregime’s police ‘Special Branch’. Theorganisation is reported to have about3,000 personnel, together with a networkof informers and agents. In each ofZimbabwe’s ten provinces the CIO isrepresented by a Provincial IntelligenceOfficer; with District Intelligence Officersand Ground Coverage teams providinglocal intelligence and internal securityfunctions.

Centrally, the CIO is divided into fivebranches.5

- Internal branch. Responsible forinternal security. This is the mostpoliticised branch of the CIO and is

responsible for many of the human rightsabuses attributed to the CIO;- External branch. Responsible forexternal security, including the handlingof CIO operatives attached toZimbabwe’s foreign embassies;- Security branch. Responsible forVIP security and governmentinstallations;- Economics branch. Responsiblefor advising the government oneconomic policy, divided into the PolicyPlanning Unit and the Economic AnalysisUnit; and the- Administrative branch.Responsible for finance, personnel,training and transport.

The CIO has no independent statutorybasis and is instead established as aDepartment in the Office of thePresident.6 Indeed CIO operativesfrequently identify themselves asmembers of the President’s Office.7

Official CIO finances are obscured in theZimbabwean Treasury’s 2012 Blue Bookby being amalgamated with otherspending by the Office of the Presidentand Cabinet. The estimates for thisbudget line are US$121m in 2011, risingto US$206m in 2014.8 This budget isnot subject to audit by the ComptrollerGeneral or any parliamentary oversight.

Global Witness believes that membersof the CIO set up a joint venture withHong Kong businessman, Sam Pa

The CIO sought off-budget sources offunding after the MDC took control of theMinistry of Finance. In 2009-10members of the CIO set up SinoZimbabwe Development, with Hong Kongbusinessman Sam Pa. Together with hisassociates Ms. Veronica Fung Yuen andMs. Lo Fong Hung, Mr. Pa runs anopaque network of companies known asthe Queensway syndicate (see box 1).

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Several well placed sources within thesecret police have told Global Witnessthat Sam Pa provided large sums offunding to the CIO. This has beencorroborated by a leaked CIO document,seen by Global Witness, which claimsthat by early 2010 Sam Pa had sent $100million to the secret police, and suggeststhat the money was paid into CIOaccounts rather than to the Ministry ofFinance. If true, this is a significant sum:in 2011 the budget of the CIO’s parentdepartment, the Office of the Presidentand Cabinet, was US $121m). Such asum would free the CIO from having toseek funding from the Ministry ofFinance, and would give the CIOconsiderable freedom to set its ownagenda.

The same sources allege that Sam Padelivered two hundred Nissan NP300Hardbody pick up trucks to Zimbabwe.The delivery of Nissan vehicles wasconfirmed by separate sources with firsthand knowledge of the delivery,interviewed by JR Warner of the AfricaCenter for Strategic Studies, author of aforthcoming report on the Queenswaysyndicate’s exploitation of fragile statesin Africa. There is also a

contemporaneous news report fromFebruary 2010 which reported that “Thecountry’s notorious Central IntelligenceOrganisation (CIO) is reported to havepurchased an unspecified number ofNissan twincab trucks for as yetunexplained reasons. … [O]urcorrespondent in Bulawayo reports thateach CIO ‘district’ was given 5 vehicles touse in their operations. … 4 of thesetrucks (3 white and 1 grey), whoseregistration numbers start with ABM, arealready in use and parked outside theCIO provincial headquarters at MagnetHouse in Bulawayo. Information remainssketchy but sources with links in theagency confirmed the vehicles wereassembled in South Africa and the CIOtook delivery of them in January.”9

In return for this assistance, SinoZimbabwe Development (Pvt) Ltd wasgranted opportunities in the diamond,cotton and property sectors. Thesebusiness activities, and the structure ofthe companies, are detailed in theannexes to this report.

Figure 3: Sam Pa in Zimbabwe. Mr Pa is businessman who is reported to holdleadership positions in a number of companies within the Queensway syndicate.

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Box 1: The Queensway syndicate

The Queensway syndicate is a network of over sixty companies led by privatebusiness interests in Hong Kong, many of which have their company addressregistered at 10/F Two Pacific Place, 88 Queensway, Hong Kong.10 The primaryshareholders of the syndicate are two individuals: Ms. Lo Fong Hung and Ms.Veronica Fung Yuen. Mr. Sam Pa (AKA Antonio Famtosonghiu Sampo Menezes, XuJinghua and Sam King) is also widely reported to hold leadership positions in anumber of the companies within the Queensway syndicate. Together theseindividuals and companies have collaborated with a number of differentgovernments and entities across Africa and elsewhere, including most prominently,with the Angolan national oil company Sonangol.

The syndicate is known both for its opacity and, on occasion, its ethically dubiousapproach to doing business. In Guinea, China Sonangol International (S) Pte Ltdand CIF Singapore Pte Ltd, signed a multi-billion dollar resource-for-infrastructure11

deal with the military junta on 10 October 2009, just weeks after government forceshad killed over 150 protestors, and raped over 100 women, in a sports stadium.12

While the contract had been in negotiation before the massacre, the signing of thedeal, which the Economist reported included the subsequent transfer of US $100million13 to the junta, had the effect of giving material aid to a pariah regime whichshortly afterwards was placed under African Union and European Union sanctions.

The syndicate specializes in resource-for-infrastructure deals in which the right toexploit natural resources are granted in exchange for the building of railways,housing, roads and public utilities. While much of its revenue comes from Angolanoil contracts, the syndicate has been known to operate in a number of othercountries, including Argentina, Congo-Brazzaville, Guinea, Singapore, Tanzania, theUnited States of America, Venezuela and Zimbabwe.

Figure 4: The Syndicate’s new office, at 89 Queensway, Hong Kong

Image courtesy of Tripadvisor.

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Global Witness believes that three ofthe Zimbabwean directors of SinoZimbabwe Development are membersof the CIO

Members of the CIO are directors ofthree interlinked companies:*

- Sino Zimbabwe Development (Pte) Ltd,registered in Singapore on 12 June 2009,with directors: Lo Fong Hung, VeronicaFung Yuen, Jimmy Zerenie, Gift KalistoMachengete and Pritchard Zhou;- Strong Achieve Holdings Ltd, registeredin the British Virgin Islands on 23 March2009, with authorised signatory:Masimba Ignatius Kamba;- Sino Zimbabwe Development (Pvt) Ltd,incorporated in Zimbabwe on 14 May2010, with directors: Masimba IgnatiusKamba and Lo Fong Hung.

Global Witness, through informationobtained from several sources within theCIO, has identified three of theZimbabwean directors of thesecompanies as members of the CIO.

The first, Gift Kalisto Machengete, is adirector of the Zimbabwean companySino Zimbabwe Development (Pvt) Ltd,and holds 51% of that company’s shares,according to records held at theZimbabwean company registry. Multiplesources from within the secret policeidentify Dr. Machengete as a Director ofFinance and Administration in the CIO.14

Dr. Machengete is also currently a boardmember of the Grain Marketing Board(GMB), and on its website he has publiclylisted his career history as includingemployment as a research economist inthe President’s Department (parentdepartment of the CIO) from 1985-1991;Economic Councillor at the Zimbabwean

* Further, there is a company called Sino ZimDiamonds Ltd, registered in Hong Kong on 15 April2010. This shares a director, Jimmy Zerenie, withSino Zimbabwe Development (Pvt) Ltd, but GlobalWitness has no information to suggest that theCIO has any role in this Hong Kong company, northat the directors or staff of Sino Zim DiamondsLtd had any knowledge of any CIO involvement in‘Sino Zimbabwe Development’.

Embassy in China in the 1990s; Head ofCoordination and Secretariat in thePresident’s Department in 1998; ActingHigh Commissioner at the ZimbabweanHigh Commission in Malaysia; and from2006 he was appointed as DeputyDirector Administration and Finance inthe President’s Department. 15

The second, Pritchard Zhou, is a directorof Sino Zimbabwe Development (Pvt)Ltd, according to Zimbabwe’s companyregister. Mr. Zhou has been identified asa CIO operative by several sources withinthe secret police. In 2005 he was aMinister Counsellor at the ZimbabweanEmbassy in South Africa.16 He ispresently Director of the ZimbabweNational Heritage Trust.17

The third, Masimba Ignatius Kamba, isidentified by one source as holding aleadership position within theZimbabwean company, Sino ZimbabweDevelopment (Pvt) Ltd, although he doesnot appear in the Zimbabwean companyregister. He is, however, listed as adirector of Sino Zimbabwe Development(Pte) Ltd, registered in Singapore, and asthe authorised signatory for StrongAchieve Holdings Ltd, registered in theBritish Virgin Islands. Several crediblesources within the CIO identified Mr.Kamba as another CIO member.

In addition Mr. Kamba was named in themedia as a senior member of the CIOwhen, in 2010, he was the beneficiary ofthe unlawful seizure of Silverton Estate, acommercial farm.18 During the seizure ofthe farm Kamba told the owners that hewas Director of Finance in the President’sOffice. This claim was publicly repeatedin 2010 in the newsletter of the office ofthe Zimbabwe Prime Minister (MDC),which alleged that Mr. Kamba is theDirector of Administration in the CIO.19

In some of the court documentationsurrounding the farm seizure Mr. Kambais sometimes described as IgnatiusKamba, and once gives his address as

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Private Bag 0095, Gaborone, the addressof the SADC secretariat in Botswana.

There are also several public reports ofmen named Ignatius Kamba, MasimbaKamba or I.M. Kamba, who may be thesame man, but Global Witness has notbeen able to confirm that they are oneand the same person. In 1998 anIgnatius Kamba was a Counsellor inZimbabwe’s Mission to the EuropeanUnion.20 In 2004 in a list of the ReserveBank of Zimbabwe’s governing board anI.M. Kamba was publicly listed as ActingDirector of Economics, in the President’sDepartment.21 A man named MasimbaKamba was appointed to the board ofthe National Oil Company of Zimbabwe(NOCZIM) in 2006.22 Finally, in 2011, aMasimba Kamba attended, as a SADCrepresentative, an ‘ASEAN-EU High LevelExpert Workshop on PreventiveDiplomacy and International PeaceMediation’, held in Indonesia.23

Sino Zimbabwe Cotton Holdings, acompany which Global Witness believesto be in effect the same company as SinoZimbabwe Development (Pvt) Ltd, isaccused of being represented by seniorZANU PF politicians and serving andretired CIO officers during a 2010 disputeover the company’s behaviour in thecotton industry. In court documents24

senior Zanu-PF government officials arealleged to have “spearheaded” the entryof the company into Zimbabwe. Theseofficials include Hon. SaviourKasukuwere, the Minister of YouthDevelopment, Indigenization andEmpowerment; Hon. Nicholas Goche,Minister of Transport; and AssistantCommissioner Martin Kwainona, a policeofficer and member of PresidentMugabe’s personal bodyguard unit.25 Mr.Goche and Mr. Kasukuwere are on boththe European Union (EU) and UnitedStates sanctions lists, while Mr. Kwainonais on the EU sanctions list: all three areaccused of sponsoring violence.26

Global Witness interviewed some of theparties to the dispute. They alleged thatduring meetings between the parties,Sino Zimbabwe Cotton Holdings wasrepresented by former members of theCIO. On one occasion, a currentlyserving senior member of the CIOrepresented Sino Zimbabwe CottonHoldings.27 At District levels also GlobalWitness interviewees identified local SinoZimbabwe Cotton Holdingsrepresentatives as CIO officers, whowere permanently based in the areaswhere they operated and were wellknown to locally based cottoncompanies.28

Sam Pa’s apparent financial supportfor the CIO undermines Zimbabweandemocratic processes and institutions

By its very nature off-budget financing ofthe security sector underminesZimbabwean democratic processes andinstitutions. The cross-party Governmentof National Unity (GNU) should decide itsspending priorities through collectiveagreement in cabinet. Zimbabwe’sNational Security Council should set anational security strategy, and the GNUshould raise taxes to fund thesepriorities. The process of managingexpenditure and raising revenues shouldbe carried out the Ministry of Finance,overseen by the cabinet of the GNU.These processes should be scrutinized byParliament. Off budget financingundermines Zimbabwean democracy byallowing security forces to set, and fund,their own agenda.

However, Sam Pa’s apparent support forthe CIO may undermine Zimbabweandemocracy more directly. According to asource within the organisation, the CIOhas allocated funding from Sam Patowards:- the planned construction of a CIOtraining college. This is not to beconfused with the Military DefenceCollege being constructed by AnhuiForeign Economic Construction (Group)

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and paid for with the profits from AnjinInvestments (Pvt) Ltd;29

- two covert operations termedOperation Black Hawk and OperationSpiderweb, designed to discredit PrimeMinister Tsvangarai, Finance Minister Biti,and Hon. Welshman Ncube ahead of thenext election;- the training of CIO operativesjamming the radio stations Voice ofAmerica and SW Radio Africa. Thejamming is said to take place from alocation in Hillside, Harare, off theChiremba Road;- the training of South Sudaneseintelligence operatives by the CIO at theCIO Training Academy in St Patricks Rd,Hatfield in Harare, and in Juba, SouthSudan.30

The existence of Operation Spiderwebhas been independently confirmed by asenior Zimbabwean government official.We have not been able to corroboratethe existence of other programmes,including Operation Black Hawk.Moreover, even if these programmesexist, it is difficult to directly link onesource of finance with a particularprogramme as funding can be fungible.Further, even if true, there is no evidenceto suggest that Sam Pa was aware ofhow his donation was spent, although hecould have reasonably foreseen suchexpenditure, given the poor reputation ofthe CIO. Nevertheless, if it is true thatthe CIO is engaged in covert activities todiscredit senior politicians from theMovement for Democratic Change, thenthis has the propensity to directlyundermine Zimbabwean democraticprocesses and institutions.

Sam Pa’s apparent financial supportfor the CIO could fund future humanrights abuses

It is also possible that off-budgetfinancing of the CIO could fund futurehuman rights abuses in the run up to thenext election. Local human rights groupshave compiled detailed reports setting

out how members of the CIO wereinvolved in organising the violence in the2008 election, which focused onsupporters of the opposition MDC. Forexample:- in Muzarabani North and Southand Mazowe North a CIO operative wasallegedly in charge of local bases wherevictims were murdered;31

- in Mount Darwin South a seniorCIO official is alleged to have partfinanced the Zanu PF district office whichorganised the violence in the district;32

- in Makoni South a CIO operativewas allegedly in charge of a local base atwhich an MDC supporter was beaten;33

- in Nyanga North a CIO operativewas in charge of the DDF Ruwangwebase from where MDC supporters wereallegedly intimidated;34

- a CIO official was sued by theDirector of the Zimbabwe Peace Project,Jestina Mukoko, for his alleged role inher abduction and torture in 2008.35

More recently, unconfirmed news reportshave identified CIO agents using Nissanpick up trucks in a number of allegedhuman rights violations:- In January 2012 a mechanic,Bornface Mvemve, was test driving anMDC owned vehicle in Msasa, Harare. Itwas reported that, as he was driving, agrey Nissan Hardbody double cab withno number plates overtook his car andsuddenly blocked his way. Three menassaulted him, poured beer over him,smashed the MDC vehicle’s windowsand then left the scene.36

- In January 2011 an MDC activistJulius Mutavira Gono of ward 10,Madzimure village, Chiredzi Southconstituency was reported to have beenbeaten in broad daylight by threemembers of the CIO who drove to hishouse in a Nissan twin cab with unmarkedplates.37

- In August 2011 three CIO agentswho were reported to be intimidatingMDC activists ahead of constitutionaloutreach meetings in the Chipinge,Chipinge South and Musikavanhu

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constituencies used white Nissan doublecabs with the registration platesABM****, ABM****, and ABM****.After the exposure of these registrationdetails by SW Radio Africa the numberplates were removed by the CIO.38

While there are some similaritiesbetween these reports (for example, theABM number plates seen in bothBulawayo and Chipinge – see page 7) it

is impossible to know whether these arethe same vehicles donated by Sam Pa tothe CIO.

The next election will inevitably lead toheightened political tensions. Whileabuses are not inevitable, ZANU PF’s useof violence as an electoral strategy atpast elections means that there is a riskthat CIO agents will be deployed tointimidate and attack political opponents.

Figure 5: CIO operative photographing Global Witness staff during KimberleyProcess Review mission to Zimbabwe, 2010

Recommendation

Global Witness believes that the activities of Sam Pa, Sino Zimbabwe Development (Pvt)Ltd and Anjin Investments (Pvt) Ltd should be investigated by relevant authorities to see iftheir actions undermine Zimbabwean democratic institutions or risk funding future humanrights abuses and therefore meet the threshold* for being placed on targeted sanctionslists.

* Executive Order 13469, setting out the basis for including someone on the U.S. sanctions list ,includes those persons orentities determined “to be owned or controlled by, directly or indirectly, the Government of Zimbabwe or an official or officialsof the Government of Zimbabwe … to have engaged in actions or policies to undermine Zimbabwe’s democratic processesor institutions … to be responsible for, or to have participated in, human rights abuses related to political repression inZimbabwe … to be engaged in, or to have engaged in, activities facilitating public corruption by senior officials of theGovernment of Zimbabwe … to have materially assisted, sponsored, or provided financial, material, logistical, or technicalsupport for, or goods or services in support of, the Government of Zimbabwe, any senior official thereof, or any personwhose property and interests in property are blocked …”.

EU Council Regulation 314/2004 includes Article 2 which states: “It shall be prohibited … to provide financing or financialassistance related to military activities, including in particular grants, loans and export credit insurance, for any sale, supply,transfer or export of arms and related materiel, directly or indirectly to any person, entity or body in, or for use in Zimbabwe.”Article 6 of the Regulation states “All funds and economic resources belonging to individual members of the Government ofZimbabwe and to any natural or legal persons, entities or bodies associated with them as listed in Annex III shall be frozen.… No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural or legalpersons, entities or bodies listed in Annex III. … The participation, knowingly and intentionally, in activities the object oreffect of which is, directly or indirectly, to promote the transactions referred to [above] shall be prohibited.” It is to Annex III, alist of sanctioned individuals and entities, to which we argue Sam Pa, Anjin and Sino Zimbabwe Development should beadded.

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3. Off-budget funding of the military by Anjin?

Global Witness previously wrote aboutAnjin Investments (Pvt) Ltd in ourbriefing Diamonds: A Good Deal forZimbabwe? Here we restate some of theevidence setting out the extent ofZimbabwean military and police controlof the company and introduce newevidence on the ownership of Anjin. Thissection first explains the controversysurrounding Marange diamonds. Second,we describe how Anjin is ostensibly ajoint venture between a previouslyunknown Zimbabwean company and aChinese construction firm. Third, wereveal that half of Anjin’s shares are heldby Zimbabwe’s Judge Advocate Generaland set out our belief that these sharesare held on behalf of the ZimbabweanMinistry of Defence. To conclude, weassess a new claim that Anjin has notpaid any taxes to the MDC controlledMinistry of Finance.

The situation in the Marange diamondfields has evolved from small scalemining accompanied by violence, tolarge modern mining operationsgranted concessions in controversialcircumstances

The discovery of diamonds at Marange in2006 resulted in the arrival of manythousands of small scale miners. Thisperiod was characterized by violence,smuggling, corruption and intimidation ofdiamond diggers. In the autumn of 2008the government launched OperationHakudzokwi or ‘You will not return’ –designed to secure the Marange diamondfields for government control. Soldiers,police and helicopter gunships weredeployed, resulting in the killing andwounding of many artisanal miners.39

After Operation Hakudzokwi, thegovernment began to grant concessionsin Marange. The first to receiveconcessions were two previouslyunknown firms named Mbada Diamonds(Pvt) Ltd and Canadile Miners (Pvt) Ltd.Fifty percent of Mbada is owned byGrandwell Holdings registered inMauritius, and 49.99 per cent ofGrandwell is now owned by TransfrontierMining, in turn owned by a network ofcompanies registered in secrecyjurisdictions.40 Canadile soon collapsedand its concession was taken over byMarange Resources (Pvt) Ltd, whollyowned by the parastatal ZimbabweMining Development Corporation(ZMDC). Press reports indicate that thenew chair of Marange Resources isretired Colonel Tshinga Dube, head ofZimbabwe Defence Industries (an entitywhich is on the EU and US sanctionslists).41

More recent concessions include SinoZimbabwe Development (Pvt) Ltd (whoare reported to have left theirconcession, and whose activities aredescribed in more detail in annex 1);Diamond Mining Corporation, a jointventure between the ZMDC and PureDiam, a company registered in Dubai,United Arab Emirates; and AnjinInvestments (Pvt) Ltd.42

There are now four companies miningdiamonds in earnest in Marange: Mbada,Marange Resources, Diamond MiningCorporation and Anjin. These areestablished operations using up-to-datetechnology, with modern securityprotocols.

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Figure 6: Marange diamond fields, concession blocks

Key- Anjin operates in block C and Eii.- Mbada operates in block A, P, the top half of concession block I, and an area North of block A and I- Diamond Mining Corporation operates in blocks Ei, and F.- Sino Zimbabwe operated in blocks H and D.- Marange Resources operates in block B, K, J and G, and the bottom half of block I.

Anjin is ostensibly a joint venturebetween Matt Bronze (Pvt) Ltd and aChinese construction company

Anjin Investments (Pvt) Ltd is a jointventure between Matt Bronze (Pvt) Ltd, apreviously unknown Zimbabwean firm,and Anhui Foreign Economic ConstructionGroup (AFEC(G)), a large Chineseconstruction company.

In Zimbabwe AFEC(G) is building a newNational Defence College. The deal isfinanced by a US$98 million loan fromthe Chinese state-owned Exim Bank43

and it has been reported in the press that

the terms of the loan include a provisionfor repayment of the debt using revenuesfrom Anjin.44

The letter below from the ZimbabweanMinistry of Mines describes Matt Bronzeas the company “which the ZimbabweMinerals Development Corporation(ZMDC) used to cooperate and signagreements with Anhui Foreign EconomicConstruction (Group)”.

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Figure 7. Letter from Ministry of Mines to Anjin, 2010

Global Witness has visited theZimbabwean company registry to look atthe records for Matt Bronze (Pvt) Ltd.The directors there are listed as Mr.Shelton Wandai Kativhu and Ms.Pennelope Rujeko, two individuals whohave no public profile in the miningsector. The company was incorporatedon 24 April 2008, and records its addressas the 9th Floor, Travel Centre, Corner of3rd St and Jason Moyo Avenue, Harare.

Other directors, shareholders andbeneficial owners of Matt Bronze are notrecorded. The following paragraphs setout the reasoning for our belief that MattBronze is a front company for theZimbabwean Ministry of Defence, militaryand police.

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Half of Anjin’s shares are held by aZimbabwean military lawyer…

The company records for Anjin itself arerevealing. Anjin Investments (Pvt) Ltd’sdirectors are listed at the registry asJiang Zhaoyao, Chen Qing, Peng Zheng,Li Zhongqi, Huang Xianjue, all withChinese nationality. The onlyZimbabwean director listed is thecompany secretary and principal officer,Brigadier-General Charles Tarumbwa. Anaffidavit records a resolution makingAnjin a joint venture between MattBronze (Pvt) Ltd, the principal officer ofwhich is Tarumbwa, and Anhui ForeignEconomic Construction (Group). Theagreement was signed by Peng Zheng onbehalf of AFEC(G) and Tarumbwa forMatt Bronze. The company register alsostates that Anjin’s share capital is madeup of US$2,000, consisting of 2,000ordinary shares, which are shared equallybetween Tarumbwa and Zheng.

So who is this Brigadier General CharlesTarumbwa, who owns half of Anjin? In2006 the United Nations listed Tarumbwaas Judge Advocate General at theMinistry of Defence.45 In 2011 theInternational Committee of the Red Crossrecords his identity as a military lawyer atthe Ministry of Defence.46 Tarumbwa islisted on the current EU sanctions listbecause he was “directly involved in theterror campaign waged before and duringthe elections” in Manicaland and MutareSouth.47

Tarumbwa played a role in a pastattempt to set up a military owned jointventure. He is also the companysecretary for Russzim Mining, a companyregistered in 2006. Company records forRusszim Mining includes correspondencefrom Zimbabwe Defence Industries (ZDI)registering Russzim as a joint venture,and appointing retired Colonel TshingaDube (head of ZDI) to sign articles ofassociation with Russzim. The recordsalso include a letter from T.K. Maphosa,the Permanent Secretary at the Ministry

of Defence at the time of Russzim’sincorporation, advising that a waiver ofregistration fees has been granted.

…and Anjin’s executive board is partlycontrolled by the Zimbabwean police,military, and Ministry of Defence

The Chinese members of the executiveboard Mr. Jian Qingde, Mr. Jiang Diaru,Mr. Tian Shiyue, Mr. Jiang Zhaoyao, andMr. Li Renfu, Mr. Zhang Shibin and Ms.Lu Qingxia.48

The Zimbabwean executive boardmembers of Anjin are:- Mr. Martin Rushwaya, thepermanent secretary in the Ministry ofDefence;49

- Mr. Oliver Chibage, acommissioner in the Zimbabwe RepublicPolice (ZRP);50

- Ms. Nonkosi M. Ncube, acommissioner in the ZRP;51

- Mr. Munyaradzi Machacha, aZANU PF director of publications;52

- Mr. Mabasa Temba Hawadi, adirector of Marange Resources (Pvt) Ltd,a subsidiary of the ZMDC;53

- Mr. Morris Masunungure, acurrent or retired officer in the ZimbabweDefence Forces (ZDF);54

- Mr. Romeo Daniel Mutsvunguma,a retired colonel in the ZDF alleged byHuman Rights Watch to haveparticipated in violence in 2008.55

We wrote to Anjin Investments to givethem a chance to comment on themakeup of their board. Anjin’s (Chinese)General Manager replied that“Zimbabwean members of the executiveboard of Anjin Investments (Pvt) Ltd areappointed by Zimbabwean government.Chinese side [sic] pays close attention tothe operation management and partner’scooperation of the company, as for thestatus and political background ofZimbabwean members, it is notreasonable for us to investigate orresearch. Please kindly understand.”56

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Figure 8. At the occasion of the granting of the mining licence Anjin executives meetPresident Robert Mugabe and Minister of Defence Hon. Emmerson Mnangagwa.

It is possible that the Marangeconcession was granted to Anjin bythe Defence Minister EmmersonMnangagwa, a front-runner to succeedPresident Mugabe

It has been alleged by an MDCparliamentarian that Anjin’s miningconcession was granted by DefenceMinister Emmerson Mnangagwa whenthe minister of mines was on leave andMnangagwa was acting Minister ofMines.57 Mnangagwa is one the frontrunners to succeed 88 year old PresidentRobert Mugabe as the leader of ZANU PF,and recently declared that he was “readyto rule”.58 Global Witness has not beenable to independently confirm that it wasMnangagwa who granted the licence but,as can be seen from the photo above, hewas present when Anjin was granted itsmining licence.

Global Witness put this allegation to AnjinInvestments, who said instead thatPresident Mugabe granted theconcession: “We hereby explain thatAnjin Investments (Pvt) Ltd was awardeda concession in the Marange diamondfields, the concession was issued byMinistry of Mines and granted by HisExcellence President Mugabe personallyby legal procedures.”59

Global Witness believes that Anjin ispart owned and part controlled by theZimbabwean military, police andMinistry of Defence

It is possible, just, that Matt Bronze is agenuine mining company which owns halfof Anjin. It is also possible that BrigadierGeneral Tarumbwa owns half of Anjin’sshares in a personal capacity, or on behalfof well connected individuals. However,Global Witness believes that it is morelikely that Matt Bronze is a front for themilitary and police as corporate entities.Factors such as Tarumbwa’s formal roleas a senior law officer at the Ministry ofDefence, the involvement of Tarumbwaand the former Permanent Secretary ofthe Ministry of Defence in theincorporation of Russzim, the presence ofthe current Permanent Secretary onAnjin’s Executive Board, and the possiblerole of Defence Minister Mnangagwa ingranting the mining licence, lead us toconclude that Anjin is likely to be part-owned and part-controlled by theZimbabwean military, police and Ministryof Defence.

This claim is denied by Anjin who wrote tous: “Anjin Investments (Pvt) Ltd hasnever been controlled by Zimbabweanmilitary or police. It is AFECC and Matt

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�

Bronze (Pvt) Ltd that benefits from AnjinInvestments (Pvt) Ltd.”60

Global Witness wrote to AnjinInvestments to ask for their response toclaims that they provide money to theMinistry of Defence, military and police.They denied the allegation and wrote“Such a phenomenon has never beenfound during the operation of AnjinInvestments (Pvt) Ltd.” When confrontedwith the statement that the Ministry ofDefence, military and police are the realbeneficial owners of Matt Bronze theywrote that “As for how the government-related company Matt Bronze (Pvt) Ltddistributes its benefits, Chinese sideknows nothing at all.”61

Finance Ministry reports non-paymentof taxes by Anjin

In Zimbabwe’s 2012 national budget theMDC-controlled Ministry of Finance setout expenditure totalling US$3.4 billion,and specified that additional spendingthat would occur only if the Treasuryreceived US$600 million from diamondrevenues promised by the ZANU PF-controlled Ministry of Mines.

However, to date diamond revenues haveyielded little. In May 2012 the MDCFinance Minister stated that the Treasuryhad only received $30.4 million fromdiamond companies for the period 1January to 21 March 2012, and that Anjinhad paid nothing to the Treasury since itbegan trading:

We have not received a singlecent from Anjin, yet Anjin isseven times bigger than some

of the other (diamond) companies.Clearly, we fear as the ministry of financethat there might be a parallelgovernment somewhere in respect ofwhere these revenues are going, and arenot coming to us. There is opaquenessand unaccountability surrounding ourdiamonds.”62

Global Witness put this complaint to AnjinInvestments. They responded that theallegation was “pure rumour” andprovided copies of payment vouchers toGlobal Witness. The vouchers indicatethat Anjin conducted four sales betweenFebruary and May 2012 totalling US$93.2 million, and used those revenuesto pay US$14.9 million in royalties andcommissions to the Minerals MarketingCorporation of Zimbabwe (MMCZ) and$2.7 million in resource depletion fees tothe Zimbabwe Minerals DevelopmentCorporation (ZMDC). There was noindication that any taxes had yet beenpaid to the Zimbabwe Revenue Authority.It may be that the MMCZ or ZMDC havenot yet passed on proceeds to theZimbabwean Treasury. It is possiblethat early revenues are being used torecoup significant capital expendituresincurred by Anjin, said by KimberleyProcess monitors to be $380m by late2011 (for more on the Kimberley Processsee box 2).63 However, it is clear that,while payments have been made to theMMCZ and ZMDC, the claim - that Anjinhas not yet paid any taxes to theZimbabwean Ministry of Finance - isplausible.

Anjin is a large operation and shouldgenerate significant profits for itsowners

Kimberley Process monitors have notedthat at present five independentprocessing plants are in operation atAnjin, with a further two plants underconstruction.64 Rapaport research, anindustry analyst, reported that “theconcession owned by Anjin hasproduction of 750,000 carats a monththat is expected to rise to approximately1.2 million carats a month after theimplementation of two new processingunits.”65 A director of Anjin is reported tohave claimed that it is now the world’slargest diamond company:

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�We are now the largestdiamond company in the worldand this has been confirmed by

KPC [Kimberly Process Certificationscheme]. We are the largest diamondmining company in the world because wehave surpassed the KPC minimumrequirements. We are the largest interms of the size of our area of operationand the amount of ore we are capable ofprocessing every day. We are also largein terms of the field, we have got thelargest deposits in the world.”66

Global Witness initially dismissed suchclaims as bombastic, but one informedindustry observer has told us that, interms of size, Anjin could be “the next DeBeers.” If we are right in our analysis,then the Zimbabwean military, police andthe Ministry of Defence part-own andpart-control half of a large and potentiallyvery profitable diamond company.

Recommendations

Global Witness believes that the activities of Anjin Investments (Pvt) Ltd should beinvestigated by relevant authorities to see if their actions undermine Zimbabweandemocratic institutions or risk funding future human rights abuses and therefore meet thethreshold for being placed on targeted sanctions lists.

The MDC Finance Minister’s allegation that “there might be a parallel governmentsomewhere in respect of where these revenues are going” is a serious accusation, withprofound consequences for Zimbabwe’s Government of National Unity. The SouthernAfrican Development Community (SADC) plays an active role in mediating the politicalprocess in Zimbabwe. SADC facilitators should give the problem of off-budget financing ofsecurity forces a high priority in forthcoming negotiations, with the aim of securingdemocratic, civilian control over the budgets for the security services. It may also benecessary for SADC to appoint an expert panel to investigate these claims.

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Box 2: Regulation of the diamond industry

The Kimberley Process (KP) is a certification scheme for rough diamonds set up in 2003to prevent diamond-fuelled conflict and human rights violations. Global Witnessinvested over ten years in establishing the scheme and attempting to make it effective.However, the scheme is no longer fit for purpose and Global Witness left the KP in2011. Among the reasons for our withdrawal are: first, the definition of conflictdiamonds is asymmetric – only applying to rebel groups, not governments such asZimbabwe which commit human rights abuses. Second, the KP only applies to part ofthe supply chain, covering rough diamonds not polished gems. Third, the scheme hasfailed to enforce its own rules and deals, including not dealing effectively with conflictdiamonds from Côte d’Ivoire, and rule breaking by Venezuela. While the United Stateshas taken the chair of the Kimberley Process promising reform, we remain scepticalthat a club which includes states such as Zimbabwe, and which requires unanimousagreement on any rule change, will implement effective reforms.

The most egregious failure of the KP over the past three years relates to Zimbabwe.The scheme has given the green light to diamond exports from several opaque jointventure companies operating in the area, including Anjin, Marange Resources, DiamondMining Corporation, and Mbada. (Sino Zimbabwe Development never went into fullproduction and so was never certified.) Kimberley Process monitoring inspectorsinvestigated security and anti-smuggling procedures at firms such as Anjin, but neverasked about the true beneficial owners of these companies, nor about revenue flows.This blind spot allows KP members, for example, to permit exports from Anjin, acompany part-controlled, and part-owned, by the Zimbabwean military and police.

Global Witness believes that diamonds should be brought into the supply chain duediligence frameworks applicable to other conflict minerals. Such frameworks couldcover the whole supply chain, could engage industry in the process, and would not berestricted to the narrow KP definition of a conflict diamond. Due diligence frameworkswould encourage and require companies to know: who their suppliers are, under whatconditions diamonds are mined and processed, and who benefits financially from theirproduction and sale. Such a framework would require diamond companies to have aconflict minerals policy; to conduct supply chain risk assessments, including on-the-ground checks on suppliers; to take remedial action to deal with any problemsidentified; to commission independent third party audits of their due diligencemeasures; and to publicly report results.

Recommendation:

Consumers wanting clean diamonds should not buy gems originating from the Marangemines until they can be certain they will not fund the Zimbabwean secret police,military and police. Companies should conduct due diligence investigations into thesource of their rough diamonds. The Organisation for Economic Coordination andDevelopment (OECD) has drawn up voluntary supply chain due diligence guidance forcompanies working in conflict-affected or high-risk areas. It has also drawn up‘supplements’ setting out how such a framework should apply in the gold, tantalum,tungsten and tin sectors. For diamonds too OECD member states should ask the OECDto work with industry and other interested parties to draw up a ‘diamonds supplement’.

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4. Conclusions and recommendations

The violence perpetrated by ZANU PFand partisan security forces in the 2008election followed similar outbreaks duringthe elections of 2000, 2002 and 2005.Global Witness fears that the nextelection, due by summer 2013, may alsobe accompanied by violence. The role ofthe military, police and CIO in pastviolence underscores the need forsecurity sector reform. A crucial part ofany reform must be civilian anddemocratic control of the budgets ofsecurity organs. Off-budget financingallows security forces to set their ownagendas and fund operations from theirown resources.

The cabinet of a democratically electedZimbabwean government should exercisecontrol of the Central IntelligenceOrganisation’s budget, via the Ministry ofFinance. This would allow thegovernment to have oversight of theCIO’s strategic direction and to ensurethat its activities match the priorities setby Zimbabwe’s National Security Council.

The likely part-ownership and part-control of Anjin by the Ministry ofDefence, military and police and theapparent part-ownership and part-controlof Sino Zimbabwe Development, by theCIO, create vehicles for off budgetfinancing of the security sector and by itsvery nature this undermines Zimbabweandemocracy.

Sam Pa appears to have provided asignificant amount of money, whichaccording to a CIO document wasUS$100m, to the secret police (this is alarge sum: in 2011 the budget of theCIO’s parent department – the Office ofthe President and Cabinet – wasUS$121m). Together with the apparentprovision of vehicles for use by the CIO,these actions undermine Zimbabwe’sdemocratic processes and institutions.The CIO may have used this money toactively undermine senior MDC politiciansthrough covert activities under thecodename “Operation Spiderweb”.

Recommendations to the international community

The activities of Sam Pa, Sino Zimbabwe Development (Pvt) Ltd and AnjinInvestments (Pvt) Ltd should be investigated by relevant authorities to see if theiractions undermine Zimbabwean democratic institutions or risk funding future humanrights abuses and therefore meet the threshold for placing them on targetedsanctions lists.

1) The processes by which Sino Zimbabwe Development and Anjin Investmentswere awarded their Marange concessions were opaque. The ZMDC has claimed inpublic to be the joint venture partner for Sino Zimbabwe Development and Anjin (seeannex 2 for more details).67 By falsely portraying itself as the joint venture partnerin these deals, the ZMDC deliberately obfuscates the true beneficiaries of theMarange concessions currently held by Anjin and previously held by Sino ZimbabweDevelopment and intentionally provides cover for the Zimbabwean CIO, police andmilitary. The ZMDC should be retained on targeted sanctions lists.

2) The Southern African Development Community (SADC) plays an active role inmediating the political process in Zimbabwe. SADC facilitators should give theproblem of off-budget financing of security forces a high priority in forthcoming

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negotiations, with the aim of securing democratic, civilian control over the budgetsfor the security services. It may also be necessary for SADC to appoint an expertpanel to investigate these claims of a parallel government.

3) The widespread use by the Queensway syndicate of companies registered inthe British Virgin Islands, a secrecy jurisdiction, is designed to obscure the beneficialownership of companies such as Sino Zimbabwe Development. In the case of StrongAchieve Holdings Ltd, Global Witness believes that the company is controlled by amember of the Zimbabwean secret police. The Financial Action Task Force, which isthe intergovernmental body that sets the global anti-money laundering standards,should adopt a standard that requires every jurisdiction to collect and list publicly thebeneficial ownership information for any company incorporated in that jurisdiction.

4) Diamonds traded by Sino Zimbabwe Development (Pvt) Ltd or Sam Pa mayhave financially benefited the Zimbabwean secret police. Similarly, Anjin diamondsmay benefit the Zimbabwean military and police. Companies in the diamond supplychain should conduct due diligence investigations into the source of their roughdiamonds and, if concerned, refuse to purchase diamonds sourced from Anjin, SinoZimbabwe Development or Sam Pa’s Marange diamond buying operation.

The Organisation for Economic Coordination and Development (OECD) has drawn upvoluntary supply chain due diligence guidance for companies working in conflictaffected or high risk areas. It has also drawn up supplements setting out how sucha framework should apply in the gold, tantalum, tungsten and tin sectors. Fordiamonds too OECD member states should ask the OECD to work with industry andother interested parties to draw up a supplement on diamonds.

Consumers should not buy diamonds originating from the Marange mines until theycan be certain they will not fund the Zimbabwean secret police or military.

Recommendations for Zimbabwe’s Government of National Unity

5) Zimbabwe’s Government of National Unity (GNU) should pass legislationbanning serving and recently retired members of the military, police, the CIO andother members of the security services from control over, or beneficial ownership of,mining companies.

6) The GNU should publish all mining concession contracts and other relevantagreements. The government should also immediately review all other contracts inthe Marange diamond fields, and audit concession allocation procedures andoperations conducted so far, to see whether they represent a good deal forZimbabwe.

7) The GNU should design new transparent and fair concession allocationprocedures designed to maximize public benefit.

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Annex 1: Activities of Sino Zimbabwe DevelopmentIn this section we set out theZimbabwean business activities of SinoZimbabwe Development (Pvt) Ltd, whichGlobal Witness believes to be a jointventure between the CIO and Sam Pa ofthe Queensway syndicate.

Sino Zimbabwe Development (Pvt) Ltdhas a small but not insignificant presencein Zimbabwe. The Queenswaysyndicate’s arrival in 2009 saw reports68

of an US$8 billion deal involving:- the construction of a railway linebetween Harare to Chitungwiza;- improved electrification andsignalling on the Harare-Gweru rail line;- improvements to Harare’s airport;- an investment to restart goldmining at the Connemara mine;- an US$500m partnership with theReserve Bank of Zimbabwe, with itssubsidiary Fidelity Printers and Refiners,to purchase gold from local miners.69

However, while Memoranda ofUnderstanding were signed, few, if any,of these projects materialised and reportsof US$8 billion deals are overblown. Inpractice the Queensway syndicate’spresence in Zimbabwe centres aroundthree activities: diamonds, cotton, andproperty deals. The following sectionsdetail these business activities in turn.

Diamonds

Several reliable sources have told GlobalWitness that Sam Pa has been involvedin two diamond-related operations: abuying programme, and a miningconcession in the Marange fields. At thetime of publication, in June 2012, SinoZimbabwe Development still employs atleast six individuals in Zimbabwe whodescribe themselves as involved in thediamond industry, including as cuttersand polishers, indicating that thecompany may still be involved in thediamond trade in some way.70

CIO documents seen by Global Witnessreveal that Sam Pa has been buying highquality diamonds sourced from Marangediamond mines from 2008 until at leastsummer 2011.71 This was reported oncontemporaneously in 2009 by Africa-Asia Confidential: “China InternationalFund moved to set up a purchasingoperation at the Marange diamondmines, which have been controlled bysoldiers and bosses of the rulingZimbabwe African National Union-Patriotic Front, in another example of itsbrashness and political insensitivity.” 72

The CIO documents describe how hesigned a two year contract to buydiamonds in exchange for providingfunding for both the Zimbabwe DefenceForces and the CIO73 and would arrive atmonthly intervals at Harare airport in awhite Airbus A319CJ private jet(registered as VP-Bex) and depart withdiamonds. The presence, but not thefrequency, of this plane at Harare airportcan be corroborated using publicsources.74

In a concession allocation processinvolving no open bidding ortransparency Sino ZimbabweDevelopment (Pvt) Ltd was awarded aconcession in the Marange diamondfields in early 2011, after which itembarked on a short period ofexploration.75 This phase, involvingsampling of the concession area was ledby Samicor (the trading name for SakaweMining Corporation (Pty) Ltd, a companyregistered in Namibia, and 76% ownedby Samicor BVI, which is in turn ownedby LL Mining Corporation, registered inIsrael. In an interview with Ha’aretz, anIsraeli newspaper, LL Mining is describedas controlled by Lev Leviev, a diamondmagnate.76 Samicor personnel Grant Rau(Chief Geologist)77 and Eli Sher (MineManager)78 were active in the SinoZimbabwe Development concession inthe Marange diamond fields.79 During

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this phase Zimbabwean cutters andpolishers were recruited by SinoZimbabwe Development, and sent toNamibia80 to be trained by LLDDiamonds, another company owned byLev Leviev.81 Global Witness has seen noevidence to indicate that Mr. Leviev, Mr.Sher, Mr. Rau, Samicor, LL MiningCorporation, or LLD Diamonds or theirdirectors or beneficial owners knew ofthe role of the CIO in Sino ZimbabweDevelopment.

By April 2011 however Sino ZimbabweDevelopment had ceased operations andfiled an application for a newconcession.82 By January 2012 thecompany was reported to have left theconcession and claimed that its samplingshowed that mining was noteconomically viable in that zone. Theparastatal Zimbabwe MiningDevelopment Corporation has taken overthe concession area.83 It is not knownwhether Sino Zimbabwe Development(Pvt) Ltd has been granted a newconcession.

Cotton

In June 2010 the Zimbabwean CottonMarketing Technical Committee (CMTC),a statutory body under the Ministry ofAgriculture, granted a license to SinoZimbabwe Cotton Holdings (Pvt) Ltd topurchase cotton.84 Interviews withseveral sources have confirmed that thisfirm is in effect the same company asSino Zimbabwe Development (Pvt) Ltd;Sino Zimbabwe Cotton Holdings (Pvt) Ltdalso have been represented in the mediaby Jimmy Zerenie (also a director of SinoZimbabwe Development (Pvt) Ltd).However, we have not been able tolocate the documents listing directors forSino Zimbabwe Cotton Holdings (Pvt) Ltdat the company registry.

In court documents several senior ZanuPF government officials are alleged tohave “spearheaded” the entry of thecompany into Zimbabwe.85 Under the

terms of license Sino Zimbabwe Cottonwas obliged to comply with a number ofconditions, including to operate withinthe common buying system and not tobuy seed cotton that had already beencontracted to other farmers. Thecompany was quickly embroiled in a legaldispute with the Cotton GinnersAssociation Zimbabwe (CGAZ), theorganization which represents theZimbabwean cotton industry. In July2010, CGAZ filed a case86 at the HighCourt, in which they accused SinoZimbabwe Cotton of purchasing cottonalready contracted to other companiesand violating the terms of their license.Sino Zimbabwe Cotton denied theallegations entirely. In a media reportJimmy Zerenie, described as SinoZimbabwe Holding’s director, stated thatthe company had not “induced anycontracted farmers to breach the law”and that the application had misled thecourt.87 In the case against SinoZimbabwe Cotton, the judge ruled thatthe case had been brought in the wrongforum. CGAZ then made an application tothe Cotton Marketing TechnicalCommittee, asking them to withdrawSino Zimbabwe Cotton’s license. Duringmeetings between the parties, GlobalWitness was told that Sino ZimbabweCotton was represented by former (andone serving) members of the CIO.88

The dispute was settled out of court andGlobal Witness has seen no furtherevidence to suggest impropriety orimproper behaviour by Sino ZimbabweCotton Holdings in the cotton sector.

Property

Sino Zimbabwe Development are reportedin the press and in Zimbabweangovernment documents seen by GlobalWitness to have bought LivingstoneHouse, Gecko Gardens hotel andconference centre, Highlands Park Hotel,the Pangolin Lodge, and Imba MatomboLodge, all located in Harare.89

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Figure 9: Sam Pa is reported to travel in this private jet: A319 Airbus VP Bex

Photo courtesy of Jerome K via Flickr, Creative Commons license

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Annex 2: Structure of Sino Zimbabwe DevelopmentIn this section we describe the corporatestructure, directorships andshareholdings of related companies –first in Zimbabwe, then in Hong Kong,and finally in Singapore and the BritishVirgin Islands. Through this analysis weidentify which companies are controlledwholly or partially by members of theZimbabwean secret police.

Zimbabwe: Sino ZimbabweDevelopment (Pvt) Ltd

The Zimbabwe Mining DevelopmentCorporation (ZMDC) has claimed thatSino Zimbabwe Development isestablished as a joint venture with theZMDC.90 However, in reality this claimmerely provides cover for theinvolvement of CIO members.

Sino Zimbabwe Development (Pvt) Ltdwas incorporated in Zimbabwe on the14th May 2010. Its offices are at the 3rd

Floor Livingstone House, Samora MachelAvenue, Harare and 14 Selous Avenue,Harare. The Zimbabwean directors ofSino Zimbabwe Development (Pvt) Ltdare Gift Kalisto Machengete and PritchardZhou (see section 2). The non-Zimbabwean directors of Sino ZimbabweDevelopment (Pvt) Ltd are:- Lo Fong Hung, a Chinese citizen.Ms. Lo is a director of at least sixty othercompanies in the Queensway syndicate;- Veronica Fung Yuen, a Chinesecitizen and director of at least thirty othercompanies in the Queensway syndicate;- Jimmy Zerenie, with Singaporeancitizenship.

All of the non Zimbabwean directorsrecord the same residential address, inChisipite, Harare in company records.One source told Global Witness thatMasimba Ignatius Kamba (see section 2)holds a leadership position in thecompany, however, it has not beenpossible to confirm this.

Jimmy Zerenie holds 49 per cent of theshare capital of Sino ZimbabweDevelopment (Pvt) Ltd while Gift KalistoMachengete, owns the other 51 percent.91 Global Witness believes thatMachengete holds these shares on behalfof the CIO rather than for his personalbenefit, given his senior role in the CIO,the presence of other CIO members asdirectors, and the funding which sourcessay Sam Pa gave to the CIO.

Hong Kong: Sino Zim Diamond Ltd

Jimmy Zerenie is also a director of SinoZim Diamond Ltd, registered in HongKong. The other director of this HongKong company is Eliezer Nefussy, anIsraeli citizen resident in Namibia.92 Mr.Nefussy is also director of OrientTreasure International Trading Ltd, whichis registered in Hong Kong and owned inturn by Samicor, registered in Namibia.93

Mr. Nefussy is also the Chief Executive ofSamicor.94 The registered address ofSino Zim Diamond Ltd is 27/F, 8 Queen’sRoad Central, Hong Kong.

Global Witness has seen no evidence tosuggest that the CIO has any role in thisHong Kong company, Sino Zim DiamondLtd, nor that the beneficial owners,directors or staff of Sino Zim DiamondsLtd, Orient Treasure InternationalTrading, or Samicor had any knowledgeof any CIO involvement in ‘SinoZimbabwe Development’.

As can be seen in figure 10, 80 per centof Sino Zim Diamond Ltd is owned byMIL Company Ltd, also registered inHong Kong at 27/F, 8 Queen’s RoadCentral, Hong Kong. The two directorsof MIL Company Ltd are Lo Fung Hong ofthe Queensway syndicate and MosheHallak, an Israeli citizen.95 Mr. Hallak isalso a director of five other companiesregistered in Hong Kong: MosheInternational, Worldpro Development,

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Shine Star, Time Express, and LLD Asia.Four of these are owned by a variety ofBVI-registered entities.96 The fifth, LLDAsia, is wholly owned by LLD DiamondsLtd, registered in Israel. The otherdirector of LLD Asia is Moshe Leviev, LevLeviev’s brother.97 Global Witness hasseen no evidence to suggest that MosheHallak, Moshe Leviev or Lev Leviev, orany staff or directors of their companies,were aware of the role of the CIO in SinoZimbabwe Development.

MIL Company Ltd is in turn owned by twocompanies registered in the British VirginIslands: Alero Ltd and Goal Achieve HoldingsLtd. The registered address for Alero Ltd isDrake Chambers, Tortola, British Virgin Islands.The registered address for Goal AchieveHoldings Ltd is PO Box 957, OffshoreIncorporations Centre, Road Town, Tortola,British Virgin Islands.98 Goal Achieve HoldingsLimited’s company number is 1511954, and itwas incorporated on 28 November 2008, byOffshore Incorporations Limited, a companyformation agent.

Figure 10: Figure 1: Ownership structure of Sino Zimbabwe Development groupand Sino Zim Diamond Ltd.*

Key - companies controlled in part by CIO members

JimmyZerenie

Gift KalistoMachengete

AleroLtd

(BVI)

Goal AchieveHoldingsLtd (BVI)

China InternationalFund Ltd (HK)

New Bright Int’l Dev Ltd (HK)

Dayuan Int’l Development (HK)

Wu YangBeijing Tian Qiao CulturalDevelopment Company (HK)

Lo Fong Hung Veronica Fung Yuen

Sino Zim Development (Pvt)(Zimbabwe)

Directors:Lo Fong HungVeronica Fung YuenJimmy ZerenieGift Kalisto MachengetePritchard Zhou

Sino Zim Development Pte(Singapore)

Directors:Masimba Ignatius KambaLo Fong HungAlain Fanaie (joined late 2011)*

Sino Zim Diamond Ltd(Hong Kong)

Directors:Eliezer NefussyJimmy Zerenie

MIL Company Ltd(HK)

Directors:Lo Fong HungMoshe Hallak

Transferred$50m to

Owns30%

Owns49%

Owns51%

Owns80%

Owns20%

Owns50%

Owns50%

Strong AchieveHoldings (BVI)

Authorisedsignatory:Masimba IgnatiusKamba

Owns30%

Star DelightHoldings (BVI)

Authorisedsignatory:Lo Fong Hung

Owns70%

Owns30%

Owns0.0001%

Owns70%

Owns69.9999%

Owns1% Owns 99%

Holds




* Alain Fanaie only joined Sino Zimbabwe Development Pte, and other companies in the Queensway syndicate, in late 2011,

after the events described in this report.

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Singapore: Sino Zimbabwe Development(Pte) Ltd

The other 20 per cent of Sino ZimDiamond Ltd (Hong Kong) is owned bySino Zim Development Pte Ltd, registeredin Singapore. The directors of thisSingaporean company are:Masimba Ignatius Kamba, Lo Fong Hung,and Alain Fanaie. Mr. Kamba gives hisregistered address as the 7th Floor,Chester House, Corner of 3rd Street andSpeke Ave, Harare. Alain Fanaie is CEOof China Sonangol, another of theQueensway syndicate companies. Itshould be noted that Mr Fanaie joined inlate 2011, after the events described inthis report.99 There is nothing to suggestthat Mr. Fanaie was aware that MasimbaIgnatius Kamba was a member of theCIO, or aware of the role of the CIO inSino Zimbabwe Development Pte Ltd orSino Zimbabwe Development Pvt Ltd.

There is one record of a financial transferbetween the Singaporean andZimbabwean companies, further evidenceof a link between the two companies.According to the 2009 accounts of SinoZim Development Pte Ltd on 16November 2009 US$50 million wasdeposited into the Zimbabwean bankaccounts of Sino Zim Development PteLtd (the Singaporean company), to beheld in trust for Sino ZimbabweDevelopment (Pvt) Ltd, the Zimbabweancompany. This sum of money is notmentioned in the 2010 accounts of SinoZimbabwe Development Pte Ltd.Otherwise the Singaporean company wasdormant in 2010.100

British Virgin Islands

Sino Zimbabwe Development Pte Ltd isowned by Strong Achieve Holdings Ltd(30 per cent) and Star Delight HoldingsLtd (70 per cent), both registered in theBritish Virgin Islands, also at PO Box 957,Offshore Incorporations Centre, RoadTown, Tortola. The memorandum of

association for Sino ZimbabweDevelopment Pte Ltd states that Lo FongHung is the authorised signatory for StarDelight Holdings, and Masimba IgnatiusKamba is the authorised signatory forStrong Achieve Holdings (see figurebelow). Strong Achieve Holdings hascompany number 1525656, and wasincorporated on 23 March 2009 byOffshore Incorporations Limited. Thefact that Masimba Ignatius Kamba,someone who Global Witness believes isa member of the CIO, is the authorisedsignatory leads us to believe that thecompany is partially or wholly controlledby the Zimbabwean CIO.

Star Delight Holdings is ultimately ownedby companies in the Queenswaysyndicate (China International Fund,Dayuan International Development, NewBright International Development) and LoFong Hung and Veronica Fung Yuen.101

Star Delight Holdings has companynumber 1532737, and was incorporatedon 21 May 2009, again by OffshoreIncorporations Limited.

RecommendationRepresentatives of the CIO aredirectors in Sino Zimbabwe companiesregistered in Zimbabwe, Singapore,and the British Virgin Islands. TheFinancial Action Task Force, which isthe intergovernmental body that setsthe global anti-money launderingstandards, should adopt a standardthat requires each jurisdiction tocollect and list publicly the beneficialownership information for anycompany incorporated there.

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Figure 11: Extract from Memorandum of Association for Sino Zim Development PteLtd (Incorporated in the Republic of Singapore)

Box 3: Lev Leviev and the Queensway syndicate

Lev Leviev is a diamond magnate well known for helping to break De Beers’ hold on thediamond market, particularly through his interests in the Angolan and Namibian diamondsectors. The US-China Economic & Security Review Commission’s report on theQueensway syndicate, describes how Lev Leviev’s companies purchased 10% of aQueensway syndicate company, Artfield Group Limited, and sold several New Yorkproperties to China Sonangol, including the old JP Morgan building on Wall Street.102 InMay 2011 Leviev sold his 18% stake in Alrosa Co. Ltd’s Catoca diamond mine in Angolato China Sonangol.103

Although Eliezer Nefussy, Grant Rau, Eli Sher, Moshe Hallak, Moshe Leviev areassociated with Lev Leviev’s companies, there is no evidence that they or Lev Leviev hadany contact with Zimbabwe’s Central Intelligence Organisation, nor that they hadknowledge of off budget financing provided by Sam Pa to the CIO, or knowledge of thepresence of CIO members as directors of Sino Zimbabwe Development.

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1 Lloyd Sachikonye, When a State Turns on Its Citizens, 2011.2 Human Rights Watch, Perpetual Fear, March 2011, p.4.3 Global Witness visited the company registry in 2012, and there was no record of Security Self RelianceEnterprises.4 Global Witness, Diamonds: A Good Deal for Zimbabwe?, February 2012.5 Derek Matyszak, Research and Advocacy Unit, Zimbabwe’s Security Sector – Who Calls the Shots? 2011, andSouthern Africa Report Profile, Zimbabwe Security Forces, July 2011.6 In Zimbabwean statutes there are three glancing references to the organisation:- the Zimbabwean National Security Council Act where it is referred to as the “Department of State for

National Security”;- the Rural District Councils Act where it is referred to as the “President’s Department”;- the Provincial Councils Act, where it is referred to as “the organization known as the Central intelligence

Organization”.See Matyszak, ibid, available athttp://www.researchandadvocacyunit.org/index.php?option=com_docman&task=doc_download&gid=107&Itemid=90 (accessed 13 April 2012)7 See The Standard, CIO agent accused of rape, 11 June 2012, available athttp://www.thestandard.co.zw/local/35863-cio-agent-accused-of-rape.html, Zimeye, CIO spy arrested overZIFA Boss kidnapping, 29 February 2012, http://www.zimeye.org/?p=47737; Newsday, CIO rot exposed,http://www.newsday.co.zw/article/2012-03-31-cio-rot-exposed, 31 March 2012; SW Radio Africa, MDC-T MPthreatened by CIO over diamond revelations, http://www.swradioafrica.com/2011/10/31/mdc-t-mp-threatened-by-cio-over-diamond-revelations/ 31 October 2011, (all accessed 11 June 2012)8 Ministry of Finance, 2012 Blue Book, http://www.zimtreasury.org/downloads/929.pdf (13 April 2012)9 SW Radio Africa, CIO splash out US$5 million on 200 vehicles, 10 February 2010, available athttp://www.swradioafrica.com/news100210/cio100210.htm (accessed 10 April 2012)10 For further reading see US-China Economic & Security Review Commission, The 88 Queensway Group: ACase Study in Chinese Investors’ Operations in Angola and Beyond, 10 July 2009, available athttp://www.uscc.gov/The_88_Queensway_Group.pdf; Economist, The Queensway syndicate and the Africatrade, 13 August 2011, available at http://www.economist.com/node/21525847; Chatham House, Thirst forAfrican Oil, August 2009; Caixin, African Safari: CIF’s Grab for Oil and Minerals, available athttp://english.caixin.com/2011-10-17/100314766.html; Khadija Sharife, Africa: The Ties That Bind - China,Angola and Zimbabwe, 11 September 2009, available at http://allafrica.com/stories/201109300630.html andvarious blog posts at the China Africa Real Story blog, , available at http://www.chinaafricarealstory.com (alllast accessed 5 April 2012.)11 BBC News, Guinea and China ’agree big deal’, 13 October 2009, available athttp://news.bbc.co.uk/1/hi/8304418.stm (accessed 11 April 2012).12 The deal is discussed in detail at Foreign Policy, Is China’s Guinea deal for real?, 29 October 2009, availableat http://blog.foreignpolicy.com/posts/2009/10/28/is_the_guinea_china_deal_for_real and China in Africa:The Real Story, Was Guinea Bought by Beijing? and China International Fund’s New Bellzone-Kalia GuineaDeal, available at http://www.chinaafricarealstory.com/2010/03/earlier-this-week-chatham-house-british.htmland http://www.chinaafricarealstory.com/2010/06/china-international-funds-new-bellzone.html respectively.(accessed 11 April 2012)13 Economist, The Queensway syndicate and the Africa trade, 13 August 2011, available athttp://www.economist.com/node/21525847 (accessed 11 April 2012).14 Global Witness interviews, 2011 and 2012.15 Grain Marketing Board, GMB Board Members Brief Resumes, available athttp://www.gmbdura.co.zw/docs/Boardprofiles.pdf (accessed 3 April 2012).16 Pritchard Zhou was a speaker at an event on “Operation Murambatsvina” in 2005 at the Institute of SecurityStudies, available at http://www.iss.co.za/pgcontent.php?UID=8249 (accessed 3 April 2012)17 The Herald, Chiadzwa Impresses Civil Society, 9 March 2012, available athttp://www.herald.co.zw/index.php?option=com_content&view=article&id=35999:chiadzwa-impresses-civil-society-&catid=38:local-news&Itemid=131 (accessed 3 April 2012).18 See Zimbabwe Independent, Hopes looters will be prosecuted fade, 22 July 2010, available athttp://www.theindependent.co.zw/local/27387-hopes-looters-will-be-prosecuted-fade-.html , Silverton EstateP/L HC 982/2010, High Court, available athttp://cfuzim.org/index.php?option=com_content&view=article&id=373:silverton-estate-pl-hc-9822010&catid=44:legal-cases&Itemid=91 (accessed 3 April 2012).19 Land Abuse Exposed, The Newsletter of the Office the Prime Minister, 4 February 2012, available athttp://www.zimbabweprimeminister.org/index.php?option=com_phocadownload&view=category&id=5:&download=44:33&Itemid=85 (accessed 3 April 2012).20 Conference in support of the Inalienable Rights of the Palestinian People, UNISPAL, 24-25 April 1998,http://unispal.un.org/UNISPAL.NSF/0/25A87B6320DFC1FF0525663A0064476A (accessed 20 May 2012).

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21 Statement to the Diplomatic Community, Governor of the Reserve Bank of Zimbabwe, 2 April 2004, whichlists Kamba as a member of the Governor’s Advisory Board.22 The Herald, New Noczim Board Appointed, 2 March 2006, available athttp://www.zimbabwesituation.com/mar3a_2006.html#Z14 (accessed 3 April 2012)23 Indonesian Minister of Foreign Affairs website, Indonesia Offers ASEAN Style Conflict Mediation, available athttp://www.kemlu.go.id/_layouts/mobile/PortalDetail-NewsLike.aspx?l=en&ItemID=1559fc7e-3eed-4038-a1a1-1b706696a72e (accessed 15 May 2012)24 Application to the CMTC in the matter between: Cotton Ginners Association and Sino Zimbabwe CottonHoldings (Private Limited), pp. 52 (E2); 57 (E4), 59 (E5)25 Application to the CMTC in the matter between: Cotton Ginners Association and Sino Zimbabwe CottonHoldings (Private Limited), p.59(E6)26 EU Sanctions list, available at http://www.hm-treasury.gov.uk/d/finsanc_zimbabwe_commission_reg151_210212.pdf; and US sanctions list, available at:http://www.treasury.gov/ofac/downloads/t11sdn.pdf (accessed 11 April 2012).27 Global Witness interviews, 2011.28 Global Witness interviews, 2011 and 2012.29 See Global Witness, Diamonds: A good deal for Zimbabwe?, 2012.30 Global Witness Interviews, 2012.31 Sokwanele, Anatomy of Terror, 2011, appendices available athttp://www.sokwanele.com/system/files/MUZARABANI%20NORTH%20AND%20SOUTH.pdf andhttp://www.sokwanele.com/system/files/MAZOWE%20NORTH.pdf (accessed 13 April 2012)32 Sokwanele, Anatomy of Terror, 2011, appendices available athttp://www.sokwanele.com/system/files/Mt.%20DARWIN%20SOUTH.pdf (accessed 13 April 2012)33 Sokwanele, Anatomy of Terror, 2011, appendices available athttp://www.sokwanele.com/system/files/MAKONI%20SOUTH.pdf (accessed 13 April 2012)34 Sokwanele, Anatomy of Terror, 2011, appendices available athttp://www.sokwanele.com/system/files/NYANGA%20NORTH.pdf (accessed 13 April 2012)35 U.S. State Department, 2009 Human Rights report, Zimbabwe,http://www.state.gov/j/drl/rls/hrrpt/2009/af/135984.htm (accessed 13 April 2012)36 The Zimbabwean, CIO agents attack mechanic, 18 January 2012, available athttp://www.thezimbabwean.co.uk/news/zimbabwe/55736/cio-agents-attack-mechanic.html (10 April 2012)37 The Zimbabwean, CIO brutally assaults MDC-T activist, 7 January 2011, available athttp://www.thezimbabwean.co.uk/human-rights/36531/cio-brutally-assaults-mdc-t-activist.html (10 April 2012)38 We have purposely obscured the last four digits of these registration numbers. SW Radio Africa, SMS newsmessage throws Manicaland CIO into panic, 13 August 2010, available at:http://swradioafrica.com/news130810/sms130810.htm (accessed 10 April 2012).39 See Global Witness, Return of the Blood Diamond, 2010, and Human Rights Watch, Diamonds in the Rough,June 2009.40 Global Witness, Diamonds: A Good Deal for Zimbabwe?, February 2012.41 Financial Gazette, Tshinga Dube named Marange Resources chair,http://www.financialgazette.co.zw/companies-a-markets/11761-tshinga-dube-named-marange-resources-chair.html. EU Sanctions list, available at http://www.hm-treasury.gov.uk/d/finsanc_zimbabwe_commission_reg151_210212.pdf; and US sanctions list, available at:http://www.treasury.gov/ofac/downloads/t11sdn.pdf (accessed 11 April 2012).42 See Global Witness, Return of the Blood Diamond, 2010, and Diamonds: A Good Deal for Zimbabwe? 2012.43 Minister of Defence, Hon. Emmerson Mnangagwa, Speech to Zimbabwean Parliament 31 May 2011.44 "The related Zimbabwe side should establish an escrow account to secure the payment and repayment ofthe facility with revenue of Zimbabwe’s side’s benefits from Anjin Investments (Private) Limited. AnjinInvestments is the joint venture set up by Zimbabwe side and Anhui Foreign economic Construction (Group)Corp Limited. An agreement on the escrow account should be signed by Zimbabwe sides and the lender forthe purpose herein," Cited in The Financial Gazette, MDC-T Agrees to Mortgage Diamonds, 10 June 2011.45 United Nations, Office of Disarmament Affairs, 2006,http://www.un.org/disarmament/HomePage/ODAPublications/OccasionalPapers/PDF/OP12.pdf (accessed at 30May 2012)46 ICRC, Table of National Committees on International Humanitarian Law, last updated 31 October 2011,http://www.icrc.org/eng/assets/files/other/national-committes-icrc-30-10-2011-eng.pdf (accessed at 30 May2012)47 European Union, External Action Service, Financial Sanctions in Force,http://ec.europa.eu/external_relations/cfsp/sanctions/list/version4/global/e_ctlview.html, (15 June 2012).48 Corporate documents in possession of Global Witness, available on request, and Global Witness interviews,January 2012.

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49 Ministry of Defence website,http://www.mod.gov.zw/index.php?option=com_content&view=article&id=47&Itemid=53 (20 January 2012).50 The Herald, “Support Unit nabs 29,000, recovers guns”, 23 December 2011,http://www.herald.co.zw/index.php?option=com_content&view=article&id=29871:support-unit-nabs-29-000-recovers-guns&catid=46:crime-a-courts&Itemid=138 (accessed 20 January 2012).51 The Herald, Female police officers hailed, 12 October 2011,http://www.herald.co.zw/index.php?option=com_content&view=article&id=23539:female-police-officers-hailed&catid=38:local-news&Itemid=131 (accessed 20 January 2012).52 The Herald, Bulawayo to host Zanu-PF conference, 2 September 2011,http://www.herald.co.zw/index.php?option=com_content&view=article&id=20185:bulawayo-to-host-zanu-pf-conference&catid=37:top-stories&Itemid=130 (accessed 20 January 2012).53 Corporate documents in possession of Global Witness, available on request.54 The Herald, Foreign Defence Attaches Donate 40 Books to ZDF, 17 September 2004,http://allafrica.com/stories/200409170338.html (accessed 20 January 2012).55 Human Rights Watch, Zimbabwe: Bullets for Each of You, p.28, 2008.56 Letter from Anjin Investments to Global Witness, 1 June 2012, copy held on file with Global Witness.57 Hon. Chikwinya, Speech to Zimbabwean Parliament, 27 October 2011.58 Zimbabwe Independent, I’m ready to rule, says Mnangagwa, 11 May 2012,http://www.theindependent.co.zw/local/35465-im-ready-to-rule-says-mnangagwa.html (21 May 2012)59 Letter from Anjin Investments to Global Witness, 1 June 2012, copy held on file with Global Witness.60 Ibid.61 Letter from Anjin Investments to Global Witness, 1 June 2012, copy held on file with Global Witness.62 AFP, Chinese firm not paying diamond proceeds to Zimbabwe: FM, 18 May 2012,http://www.google.com/hostednews/afp/article/ALeqM5iMCC7ABe6LsIaIQ4YPO6y8XXfw9Q?docId=CNG.737c34631ca379f2d8a2a5ef902157c8.661 (accessed 21 May 2012)63 Kimberley Process, Compliance Verification Report on Anjin Investments, 2011.64 Kimberley Process, Compliance Verification Report on Anjin Investments, 2011.65 Rapaport, January 2012 Research Report.66 Cited in Zimbabwe Chronicle, Anjin Now World’s Largest Diamond Producer, 16 December 2011 (lastaccessed 31 January 2012).67 See for example speech by Godwills Masimirembwa, Chairman of the Zimbabwe Minerals DevelopmentCorporation, Illegal Sanctions: Challenges on Zimbabwe’s Mining Industry, The case of ZMDC, its subsidiaries,associated companies and joint ventures, 2011, available athttp://www.euromoneyconferences.com/downloads/Canada11/ECONOMIC_SANCTIONS_CHALLENGES_ON_ZIMBABWE_(2).pdf (accessed 10 April 2012).68 The Herald, Zimbabwe: Chinese Firms Pour Millions Into Country, 9 December 2009 and Africa AsiaConfidential, All That Glitters is Mine, December 2009.69 NAM news network, Zimbabwe’s Central Bank Launches $500m USD Gold Buying Programme, available athttp://www.namnewsnetwork.org/v2/read.php?id=102923 (accessed 4 April 2012)70 Public sources, available on request71 Global Witness interviews, 2010 - 2012.72 See Africa Asia Confidential, All That Glitters is Mine, December 2009:73 Global Witness interviews 2010-12.74 Public sources available to Global Witness, available on request.75 The Standard, Another Chinese firm at Chiadzwa, 13 March 2011 available athttp://www.thestandard.co.zw/business/28821-another-chinese-firm-at-chiadzwa.html (accessed 4 April 2012)76 Ha’aretz, Living by the Leviev Method, 28 June 2004, available at http://www.haaretz.com/print-edition/business/living-by-the-leviev-method-1.126783 (accessed 14 June 2012)77 Grant Rau Linkedin profile, available at http://www.linkedin.com/pub/grant-rau/29/b02/779 (4 April 2012)78 Eli Sher Linkedin profiles available at http://www.linkedin.com/pub/eli-s/28/90b/396 (4 April 2012)79 The Herald, Chiadzwa: President on fact-finding mission, 16 June 2011, available athttp://www.herald.co.zw/index.php?option=com_content&view=article&id=12783:chiadzwa-president-on-fact-finding-mission&catid=37:top-stories&Itemid=130 (accessed 4 April 2012)80 Public sources, available on request.81 AFI Group, Company Management Bios, available at http://www.afigroup-global.com/company_management.htm (accessed 12 June 2012)82 The Herald, Chiadzwa: President on fact-finding mission, 16 June 2011, available athttp://www.herald.co.zw/index.php?option=com_content&view=article&id=12783:chiadzwa-president-on-fact-finding-mission&catid=37:top-stories&Itemid=130 (accessed 4 April 2012)83 The Herald, ZMDC takes over Sino-Zim operations at Chiadzwa, 7 January 2012, available athttp://www.herald.co.zw/index.php?option=com_content&view=article&id=30823:zmdc-takes-over-sino-zim-operations-at-chiadzwa&catid=38:local-news&Itemid=131 (accessed 4 April 2012)

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84 Application to the CMTC in the matter between: Cotton Ginners Association and Sino Zimbabwe CottonHoldings (Private Limited), p. 5085 Application to the CMTC in the matter between: Cotton Ginners Association and Sino Zimbabwe CottonHoldings (Private Limited), p.59(E6)86 Application to the CMTC in the matter between: Cotton Ginners Association and Sino Zimbabwe CottonHoldings (Private Limited).87 Zimbabwe independent, Cotton furore: Ministers accused of aiding Chinese firms, 29 July 2010 and BBCAfrica, Trade body accuses Zimbabwean ministers of assisting Chinese firm, 30 July 201088 Global Witness interviews, 2011.89 Global Witness research, Africa Asia Confidential, Trading Partners, April 2011, available athttp://www.africa-asia-confidential.com/index.aspx?pageid=7&articleid=552 (accessed 4 April 2012)90 See for example speech by Godwills Masimirembwa, Chairman of the Zimbabwe Minerals DevelopmentCorporation, Illegal Sanctions: Challenges on Zimbabwe’s Mining Industry, The case of ZMDC, its subsidiaries,associated companies and joint ventures, 2011, available athttp://www.euromoneyconferences.com/downloads/Canada11/ECONOMIC_SANCTIONS_CHALLENGES_ON_ZIMBABWE_(2).pdf (accessed 10 April 2012).91 Company records, Zimbabwean company registry.92 Sino Zim Diamond Ltd Annual Return 2011.93 Orient Treasure International Trading Ltd Annual Return 2011. According to the Namibian Ministry of Mine’slicense information Samicor’s shareholders include: Samicor BVI 76% owned by LL Mining Corporation – Israel,Longlife Mining 10%, Government of Namibia 8%, National Youth Service 2%, Employees 4%.94 He has also been associated in the media with other companies such as Namibian Minerals Corporation(NAMCO), LL Biofuel Namibia.95 Hong Kong company records, held by Global Witness.96 Moshe International’s other director is Lo Fong Hung and it is owned by China Sonangol Mining Ltd (BVI)(90 shares) and Action Gear Ltd (BVI) (9 shares). Worldpro Development’s other directors are Lo Fong Hungand Francisco de Lemos Jose Maria, and Manuel Domingo Vicente and it is owned by World Noble HoldingsLimited (BVI). The other directors and owners of Shine Star are not yet listed at the time of writing. Theother director of Time Express is Lo Fong Hung and the company is owned by Best Effect Holdings Ltd (BVI)and All Prime Holdings Limted (BVI). All these BVI companies are registered at PO Box 957, OffshoreIncorporations Centre, Road Town, Tortola, British Virgin Islands.97 See Ha’aretz, Leviev’s diamonds to stay, but the rest of his businesses will leave, 1 January 2008, availableat http://www.haaretz.com/print-edition/business/leviev-s-diamonds-to-stay-but-the-rest-of-his-businesses-will-leave-1.236334 (accessed 14 April 2012).98 Hong Kong company documents on file with Global Witness.99 Africa-Asia Confidential, China Sonangol is Open for Business, October 2011, available at http://www.africa-asia-confidential.com/index.aspx?pageid=7&articleid=645 and China Sonangol website, available athttp://www.chinasonangol.com/eng/index.asp (accessed 4 April 2011).100 Sino Zimbabwe Development Pte Ltd annual accounts 2010101 Memorandum of association for Sino Zim Development Pte Ltd and other corporate documents held on fileby Global Witness. The role of China International Fund is made clear by Sino Zimbabwe Development Pte Ltdannual accounts for 2010 which make clear that China International Fund is an intermediate holding companyand New Bright International Development Ltd is the ultimate holding company.102 US-China Economic & Security Review Commission, The 88 Queensway Group: A Case Study in ChineseInvestors’ Operations in Angola and Beyond, 10 July 2009, available athttp://www.uscc.gov/The_88_Queensway_Group.pdf103 Bloomberg, Israel’s Leviev Sells 18% Stake In Angola Diamond Mine, Kommersant Says, 18 May 2011http://www.bloomberg.com/news/2011-05-18/leviev-sells-18-stake-in-angola-diamond-mine-kommersant-says.html (accessed 21 May 2012).

Global Witness is a UK-based non-governmental organisation which investigates the role ofnatural resources in funding conflict and corruption around the world.

References to ‘Global Witness’ in this report are to Global Witness Limited, a company limitedby guarantee and incorporated in England (Company No. 2871809).

Global Witness6th Floor, Buchanan House30 Holborn, London EC1N [email protected]

© Global Witness 2012

Documents

financing a parallel government zimbabwe€¦ · Development (Pvt) Ltd, registered in Zimbabwe; Sino Zimbabwe Development (Pte) Ltd, registered in Singapore, and Strong Achieve Holdings