WORLD NEWS TOMORROW LONDON – The United Kingdom government has raised concerns with Virgin Islands officials about VI-registered companies that are allegedly involved in allowing members of the Zimbabwean “secret police” to profit from the country’s diamond trade.

The UK’s House of Commons hosted a debate on Zimbabwe’s “blood diamonds” on July 17 to discuss the link between the country’s minerals trade and alleged human rights abuses.

During the debate, members discussed a report published in June by the non-profit group Global Witness that alleged members of Zimbabwean’s Central Intelligence Organisation had used a network of companies, including some registered in the VI, to disguise funding the group had reportedly received from Sam Pa, a Chinese businessman.

Alistair Burt, a Conservative Party MP, said that discussions about the matter, and about the identity of the beneficial owners of the VI-registered companies, are ongoing.

“The question of governance and transparency in diamond revenue flows therefore remains genuinely difficult to answer,” he said, adding, “We have discussed this with partners. … We have raised concerns about the handling of diamond finance with the British Virgin Islands.”

This week the Zimbabwe Independent, which has over the years been investigating the goings-on at Marange diamond fields, carries the third instalment of the latest Global Witness report, Financing A Parallel Government?, which makes interesting revelations about Chiadzwa.

This week the report by the UK-based non-governmental organisation which campaigns against natural resource-related conflict, corruption and associated environmental and human rights abuses exposes how Zimbabwe’s security forces direct shadowy companies as a means to fund their agenda off-budget. The Global Witness reports sheds light on activities unfolding at Marange diamond fields, detailing who is involved and the intricate networks comprising the Chinese and Zimbabwe’s security forces, the army, police and intelligence services dealing in diamonds, cotton and property sectors.

Members of the CIO are directors of three interlinked companies:

Sino-Zimbabwe Development (Pte) Ltd, registered in Singapore on June 12 2009, with directors: Lo Fong Hung, Veronica Fung Yuen, Jimmy Zerenie, Gift Kalisto Machengete and Pritchard Zhou;
Strong Achieve Holdings Ltd, registered in the British Virgin Islands on March 23 2009, with authorised signatory: Masimba Ignatius Kamba;
Sino-Zimbabwe Development (Pvt) Ltd, incorporated in Zimbabwe on May 14 2010, with directors: Masimba Ignatius Kamba and Lo Fong Hung.

Global Witness, through information obtained from several sources within the Central Intelligence Organisation (CIO), has identified three of the Zimbabwean directors of these companies as members of the CIO.

The first, Gift Kalisto Machengete, is a director of the Zimbabwean company Sino-Zimbabwe Development (Pvt) Ltd, and holds 51% of that company’s shares, according to records held at the Zimbabwean company registry. Multiple sources from within the secret police identify Dr Machengete as a director of finance and administration in the CIO. Machengete is also currently a board member of the Grain Marketing Board (GMB), and on its website he has publicly listed his career history as including employment as a research economist in the President’s Department (parent department of the CIO) from 1985-1991.

He was also Head of Coordination and Secretariat in the President’s Department in 1998; Acting High Commissioner at the Zimbabwean High Commission in Malaysia; and from 2006 he was appointed as deputy director Administration and Finance in the President’s Department.

Further, there is a company called Sino-Zim Diamonds Ltd, registered in Hong Kong on April 15 2010. This shares a director, Jimmy Zerenie, with Sino-Zimbabwe Development (Pvt) Ltd, but Global Witness has no information to suggest that the CIO has any role in this Hong Kong company, nor that the directors or staff of Sino-Zim Diamonds Ltd had any knowledge of any CIO involvement in “Sino-Zimbabwe Development”.

The second, Pritchard Zhou, is a director of Sino-Zimbabwe Development (Pvt) Ltd. According to Zimbabwe’s company register, Zhou has been identified as a CIO operative by several sources within the secret police. In 2005 he was a minister counsellor at the Zimbabwean Embassy in South Africa. He is presently director of the Zimbabwe National Heritage Trust.

The third, Masimba Ignatius Kamba, is identified by one source as holding a leadership position within the Zimbabwean company, Sino-Zimbabwe Development (Pvt) Ltd, although he does not appear in the Zimbabwean company register. He is, however, listed as a director of Sino-Zimbabwe Development (Pte) Ltd, registered in Singapore, and as the authorised signatory for Strong Achieve Holdings Ltd, registered in the British Virgin Islands. Several credible sources within the CIO identified Kamba as another CIO member.

In addition Kamba was named in the media as a senior member of the CIO when, in 2010, he was the beneficiary of the unlawful seizure of Silverton Estate, a commercial farm. During the seizure of the farm, Kamba told the owners he was director of finance in the President’s Office. This claim was publicly repeated in 2010 in the newsletter of the Office of the Zimbabwe Prime Minister (MDC), which alleged that Kamba is the director of administration in the CIO.

In some of the court documentation surrounding the farm seizure Kamba is sometimes described as Ignatius Kamba, and once gives his address as Private Bag 0095, Gaborone, the address of the Sadc secretariat in Botswana.

There are also several public reports of men named Ignatius Kamba, Masimba Kamba or IM Kamba, who may be the same man, but Global Witness has not been able to confirm they are one and the same person. In 1998 Kamba was a counsellor in Zimbabwe’s Mission to the European Union. In 2004 in a list of the Reserve Bank of Zimbabwe’s governing board an IM Kamba was publicly listed as acting director of Economics in the President’s Department. A man named Masimba Kamba was appointed to the board of the National Oil Company of Zimbabwe in 2006. Finally, in 2011, a Masimba Kamba attended, as a Sadc representative, an Asean-EU High Level Expert Workshop on Preventive Diplomacy and International Peace Mediation, held in Indonesia.

Sino-Zimbabwe Cotton Holdings, a company which Global Witness believes to be in effect the same firm as Sino-Zimbabwe Development (Pvt) Ltd, is accused of being represented by senior Zanu PF politicians and serving and retired CIO officers during a 2010 dispute over the company’s behaviour in the cotton industry. In court documents senior Zanu PF government officials are alleged to have “spearheaded” the entry of the company into Zimbabwe. These officials include Saviour Kasukuwere, the Minister of Youth Development, Indigenisation and Empowerment, Nicholas Goche, Minister of Transport and Assistant Commissioner Martin Kwainona, a police officer and member of President Mugabe’s personal bodyguard.

Goche and Kasukuwere are on both the EU and US sanctions lists, while Kwainona is on the EU sanctions list.

Global Witness interviewed some of the parties to the dispute. They alleged that during meetings between the parties, Sino-Zimbabwe Cotton Holdings was represented by former members of the CIO. On one occasion, a currently serving senior member of the CIO represented Sino-Zimbabwe Cotton Holdings. At district level Global Witness interviewees identified local Sino-Zimbabwe Cotton Holdings representatives as CIO officers, who were permanently based in the areas where they operated and were well known to locally-based cotton companies.

Sam Pa’s apparent financial support for the CIO undermines Zimbabwean democratic processes and institutions. By its very nature, off-budget financing of the security sector undermines Zimbabwean democratic processes and institutions. The GNU should decide its spending priorities through collective agreement in cabinet. Zimbabwe’s National Security Council should set a national security strategy, and the GNU should raise taxes to fund these priorities. The process of managing expenditure and raising revenues should be carried out by the Ministry of Finance, overseen by the cabinet of the GNU.

These processes should be scrutinised by parliament. Off-budget financing undermines democracy by allowing security forces to set, and fund, their own agenda.

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