Zimplats Caught in ‘Panama Papers’ Furor
Zimbabwe Sunday Mail
Photo: A worker drives a vehicle at Zimplats’ Ngwarati Mine in Mhondoro-Ngezi May 30, 2014. Leaked documents allege Zimplats used an offshore company to pay management salaries without the knowledge of the Reserve Bank of Zimbabwe. — Reuters
Allegations that salaries of management at Zimplats, the country’s biggest platinum miner, were paid via an offshore company has renewed interest in the role mining companies play in siphoning resources from host countries.
If true, it means the managers did not pay taxes for money earned in Zimbabwe, and could also be a breach of the Exchange Control Regulations and the Anti-Money Laundering Act.
A recent Reserve Bank of Zimbabwe report says the country lost US$3 billion through illicit financial flows between 2009 and 2012, while Africa as a whole lost US$3 trillion during that period.
Central bank Governor Dr John Mangudya has said Zimbabwe lost more than US$500 million in illicit financial flows in 2015.
Dr Mangudya said, “There is no company or firm in Zimbabwe that is authorised to operate offshore accounts for the purpose of paying its senior managers who are Zimbabweans and working in Zimbabwe. That practice bodes around externalisation and thus typical case of illicit financial flows.
“Zimbabwe is not aware of that practice, which, if proven, is a blatant violation of the country’s exchange control policy. Violation of exchange control rules and regulations is punishable offense.”
The allegations against Zimplats are part of a broad investigation into use of offshore tax havens, leading to calls for “an urgent full investigation” by Zimplats’ South African majority shareholder, Implats.
The so-called Panama Papers were first provided to German newspaper Suddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists.
That group co-ordinated a comprehensive review with reporting partners from 76 countries.
Documents from Panamanian law firm Mossack Fonseca indicate that accountants at Northern Wychwood used Mossack Fonseca to register a company called HR Consultancy in the Isle of Man to handle payments to senior Zimplats managers.
“We receive the funds to cover the total salaries from Zimplats and pay the managers accordingly,” said leaked correspondence dated November 5, 2012.
The documents claim the senior managers to be paid by HR Consultancy were Zimbabwean citizens, but no names or figures were listed.
Zimplats denied any involvement with HR Consultancy or knowledge of the said transactions.
“Zimbabwe Platinum Mines Private Limited has no relationship with the companies listed,” said Busi Chindove, Zimplats head of corporate affairs.
Zimplats is 87 percent owned by Implats.
Implats spokesman Johan Theron said, “As far as I could establish, we have never conducted any business with such an entity (HR Consultancy),” Theron said.
He said Implats had “prioritised transparency in all our dealings and gone out of our way to transact fairly, openly, and to transact and pay taxes in the countries in which we operate as far as possible”, and said they would “initiate an urgent full investigation into the purported Zimplats links with the Zimbabwe authorities”.
It is said Northern Wychwood still updates HR Consultancy’s certificate of incumbency, with the latest filing done through Mossack Fonseca last year.
Documents identify the shareholder of HR Consultancy as Hanoverian Limited, based in the British Virgin Islands. Hanoverian Limited lists Palatinate Limited as its corporate director.
In turn, Palatinate Limited’s directors are Hanoverian Limited, Bryan Campion Ellis, Peter Whitney Fearnhead and Shaun Fergusson Cairns.
Asked if Northern Wychwood provided consultancy services to Palatinate, Hanoverian and HR Consultancy, Northern Wychwood accountant Donna Summers said: “We do not comment on matters pertaining to our clients.”
Mossack Fonseca corporate liaison officer Jordan Spencer also refused to comment on his company’s relationship with HR Consultancy, Zimplats or Northern Wychwood: “We are not allowed to give any information about our clients to third parties.”
A source of funds or wealth declaration form signed by Palatinate in July 2015 said it was a director of Northern Wychwood Limited client companies, and listed Zimbabwe, South Africa, United Kingdom and the Isle of Man as countries where it had operations.
Cairns, Ellis and Fearnhead were yet to comment at the time of publishing.
Fearnhead was a director at the now dissolved African Minerals Development Limited. Ellis is a Zimbabwe-born accountant who once worked for British firm FIHZL. Cairns has said he worked for De Beers before setting up a trust fund in the Isle of Man in 1993 and lists an email address at Northern Wychwood as his own.
The Panama Papers highlight how billions of dollars are hidden offshore by the world’s elite, with major banks creating of hard-to-trace shell companies in the British Virgins Islands, Panama and other offshore havens.
— Online-Business Reporter
Photo: A worker drives a vehicle at Zimplats’ Ngwarati Mine in Mhondoro-Ngezi May 30, 2014. Leaked documents allege Zimplats used an offshore company to pay management salaries without the knowledge of the Reserve Bank of Zimbabwe. — Reuters
Allegations that salaries of management at Zimplats, the country’s biggest platinum miner, were paid via an offshore company has renewed interest in the role mining companies play in siphoning resources from host countries.
If true, it means the managers did not pay taxes for money earned in Zimbabwe, and could also be a breach of the Exchange Control Regulations and the Anti-Money Laundering Act.
A recent Reserve Bank of Zimbabwe report says the country lost US$3 billion through illicit financial flows between 2009 and 2012, while Africa as a whole lost US$3 trillion during that period.
Central bank Governor Dr John Mangudya has said Zimbabwe lost more than US$500 million in illicit financial flows in 2015.
Dr Mangudya said, “There is no company or firm in Zimbabwe that is authorised to operate offshore accounts for the purpose of paying its senior managers who are Zimbabweans and working in Zimbabwe. That practice bodes around externalisation and thus typical case of illicit financial flows.
“Zimbabwe is not aware of that practice, which, if proven, is a blatant violation of the country’s exchange control policy. Violation of exchange control rules and regulations is punishable offense.”
The allegations against Zimplats are part of a broad investigation into use of offshore tax havens, leading to calls for “an urgent full investigation” by Zimplats’ South African majority shareholder, Implats.
The so-called Panama Papers were first provided to German newspaper Suddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists.
That group co-ordinated a comprehensive review with reporting partners from 76 countries.
Documents from Panamanian law firm Mossack Fonseca indicate that accountants at Northern Wychwood used Mossack Fonseca to register a company called HR Consultancy in the Isle of Man to handle payments to senior Zimplats managers.
“We receive the funds to cover the total salaries from Zimplats and pay the managers accordingly,” said leaked correspondence dated November 5, 2012.
The documents claim the senior managers to be paid by HR Consultancy were Zimbabwean citizens, but no names or figures were listed.
Zimplats denied any involvement with HR Consultancy or knowledge of the said transactions.
“Zimbabwe Platinum Mines Private Limited has no relationship with the companies listed,” said Busi Chindove, Zimplats head of corporate affairs.
Zimplats is 87 percent owned by Implats.
Implats spokesman Johan Theron said, “As far as I could establish, we have never conducted any business with such an entity (HR Consultancy),” Theron said.
He said Implats had “prioritised transparency in all our dealings and gone out of our way to transact fairly, openly, and to transact and pay taxes in the countries in which we operate as far as possible”, and said they would “initiate an urgent full investigation into the purported Zimplats links with the Zimbabwe authorities”.
It is said Northern Wychwood still updates HR Consultancy’s certificate of incumbency, with the latest filing done through Mossack Fonseca last year.
Documents identify the shareholder of HR Consultancy as Hanoverian Limited, based in the British Virgin Islands. Hanoverian Limited lists Palatinate Limited as its corporate director.
In turn, Palatinate Limited’s directors are Hanoverian Limited, Bryan Campion Ellis, Peter Whitney Fearnhead and Shaun Fergusson Cairns.
Asked if Northern Wychwood provided consultancy services to Palatinate, Hanoverian and HR Consultancy, Northern Wychwood accountant Donna Summers said: “We do not comment on matters pertaining to our clients.”
Mossack Fonseca corporate liaison officer Jordan Spencer also refused to comment on his company’s relationship with HR Consultancy, Zimplats or Northern Wychwood: “We are not allowed to give any information about our clients to third parties.”
A source of funds or wealth declaration form signed by Palatinate in July 2015 said it was a director of Northern Wychwood Limited client companies, and listed Zimbabwe, South Africa, United Kingdom and the Isle of Man as countries where it had operations.
Cairns, Ellis and Fearnhead were yet to comment at the time of publishing.
Fearnhead was a director at the now dissolved African Minerals Development Limited. Ellis is a Zimbabwe-born accountant who once worked for British firm FIHZL. Cairns has said he worked for De Beers before setting up a trust fund in the Isle of Man in 1993 and lists an email address at Northern Wychwood as his own.
The Panama Papers highlight how billions of dollars are hidden offshore by the world’s elite, with major banks creating of hard-to-trace shell companies in the British Virgins Islands, Panama and other offshore havens.
— Online-Business Reporter
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