Inside Zimbabwe Inc

You cannot appreciate why Mugabe and his henchmen are clinging so
tenaciously to power until you know how much they have to lose

ALTHOUGH CORRUPTION within the Zimbabwean government is notorious,
journalists have persistently failed to find proof of corruption in
the case of President Robert Mugabe himself. The only time that
anything really juicy emerged was during the US Senate hearings into
the collapse of the Abu Dhabi-based Bank of Credit and Commerce
International (BCCI) in 1992. According to the published testimony of
BCCI officials the bank had secured preferential banking rights in
Zimbabwe by bribing Mugabe and Vice-President Joshua Nkomo in
1980-81.

One official, Nazir Chinoy, described how the bank's emissary,
Aluauddin Sheikh, "carried a bag with him . . . he went off to see
President Mugabe and when they talked they wanted me out of the
room".
Chinoy and other officials said the bag had been full of cash and
that
Sheikh left it with Mugabe. Another official, Akbar Bilgrami,
testified that "We paid Mugabe and Nkomo. I was at the Park Lane
branch [in London]. BCCI was approached to look after the expenses of
the delegates [at the Lancaster gate talks on Zimbabwean
independence], which were paid. In addition, we paid £500,000 pounds
from the Park Lane branch. Someone from Mr Naqvi's office came to
Park
Lane and picked up the money. I don't think that Ian Smith was
getting
paid by us." BCCI did indeed acquire special banking rights in
Zimbabwe that it retained until the bank's collapse.

To understand how politics and money work in Zimbabwe one has to
begin
with the fact that Zanu-PF is more than just a political party. It
owns two companies, the M & S Syndicate, set up even before
independence in 1980, and Zidco Holdings (of which M & S holds 55 per
cent of the shares), set up straight afterwards.

Through these two companies the party has a vast range of interests,
see [2]Figure 1 (Zidco Holdings). Many of its holdings are apparent
in
the figure. Those that are not are Treger Holdings, producers of
building materials, hardware etc; Ottawa, a property management
company; Catercraft, which runs the catering at Harare airport and
also supplies all domestic and international flights out of Harare;
Zimdam, M&S's investment arm; Woolworth Trading, which supplies the
Zimbabwean armed forces, government central stores and other
ministries and departments; and Zidlee Enterprises, which controls
the
duty free shops at Beit Bridge, Harare City and Harare Airport, also
supplying diplomats with a range of goods. Zidlee is believed to be
particularly useful to Zanu-PF high-ups who want to move foreign
exchange in or out of the country.

In effect Zidco allowed the party to take a share in a whole range of
enterprises set up in Zimbabwe. This also allowed key members of the
political elite access to its profits, though how much goes to whom
is
not a public fact. Attempts at Zanu-PF congresses to get the party's
treasurer, Emmerson Mnangagwa, to divulge the accounts of Zidco and M
& S have always failed; though he did reveal in 1992 that Zanu-PF's
assets were then worth Z$486 million.

The key to Zidco is the Joshi family. The Joshis are part of the
Asian
diaspora scattered across east and southern Africa, a community that,
thanks to the chronic insecurity it has had to face in recent years,
now frequently has a footing in Britain too. The Joshis, a family of
Malawian Asians with a house in Romford, Essex, have played a key
role
under the Mugabe regime. Jayan Joshi, who was based in Britain in the
1970s, extended considerable assistance to Zanu activists sent on
scholarships to Britain from the guerrilla camps in Mozambique.

After independence Mugabe invited Jayan and his brother Manoo to run
Zidco. Through their offices Rambhai Patel, a Kenyan Asian who now
lives near Chislehurst in Kent, put up the equity capital for Zidco,
of which he still owns 45 per cent. Patel, now in his 80s, is a
legend
in the Asian community, having greatly increased the fortune his
merchant father left him. He is famous not just for his wealth and
business acumen but as an eminence grise. He is the owner of Unicorn
Export-Import, based in London, which owns his share of Zidco. In
1984
he visited Zimbabwe and cemented his relationship with Mugabe by
making a $50,000 contribution to Zanu-PF funds. The Joshis retain
strong personal links to the Mugabes - Jayan's daughter Heena, for
example, is a close friend of the president's wife, Grace, and sits
on
the board of Grace's pet charity, the Children's Rehabilitation
Trust.
Having played a key part in the contract for the new Harare
international airport Heena now has a leading role in Oryx Diamonds.

Zidco's directors are the two Joshi brothers, and Emmerson Mnangagwa
and Sidney Sekeramayi - the two men who have controlled the Central
Intelligence Organisation ever since independence. Both are extremely
close to Mugabe. The president has tried to push Mnangagwa forward as
his possible successor but the former minister of justice is too
unpopular for that to succeed. Despite his defeat in the June
election, Mugabe has made Mnangagwa speaker of parliament with a
brief
to keep the Movement for Democratic Change under control. Sekeremayi,
clung on to his seat in the June election by just 63 votes, a result
which the MDC is challenging in the courts. Mugabe has abolished his
ministry of security abolished and moved him into the presidential
office instead, thus increasing the president's personal control over
the CIO.

Thus Mnangagwa and Sekeramayi not only know, both literally and
figuratively, where all the political bodies are buried but are also
privy to all the party's financial secrets - which they control.
Mnangagwa was chairman of M & S for many years. He is also a director
of Oporto Investments, Galant Distribution, Galhold Investments,
Woolworth Trading, Treasure Holdings and National Blankets.

Mnangagwa is also chairman of Fibrolite, a joint venture with a
Portuguese businessman, Armando Godinko. Fibrolite exports over US$1
million of asbestos a year. The interaction between Mnangagwa's
political, financial and intelligence roles - CIO operatives still
call him "the son of God" because of his close ties to Mugabe - was
revealed in 1995. Godinko's son, Luis, the owner of the Mirage
nightclub, was arrested for the abduction and rape of a 17-year-old
girl. When the immigration authorities sought to cancel Luis's
residence permit Mnangagwa got the CIO to swear that Luis was one of
their key operatives and a vital source of information, so that the
charges were dropped in the national interest. The principal
immigration officer, Elias Mbedze, did not have such a high opinion
of
Luis, calling him "a dangerous guy" and "a graduate in crime" - Luis
was at the time appealing against a conviction for bribing a police
officer.

Mnangagwa has also played a key role in the expansion of Zanu-PF's
financial interests into the Democratic Republic of the Congo. In May
1999 he admitted that he had introduced a Chinese arms company, two
transport companies, a banking group and a power company to Laurent
Kabila and that they had all established businesses there. One of
Zidco's subsidiaries, the First Bank Corporation, then set up in
Kinshasa. In addition two other business associates of Mnangagwa went
into business ferrying arms and supplies between Zimbabwe and the
DRC,
Billy Rautenbach's Wheels of Africa company and the head of the
Zimbabwean army, General Vitalis Zvinavashe, with his company,
Zvinavashe Transport. Mnangagwa then helped to broker an arms deal
for
Kabila of 21,000 AK-47s and US$53 million of heavy arms, all from
China. Mnangagwa also works closely with John Bredenkamp, who boasts
of being the biggest single supplier of arms to the Congo.

In late 1998 Zimbabwean forces in the DRC suffered heavy casualties
and lost several helicopter gunships. Mugabe sent Mnangagwa and
Sekeramayi to the DRC to assess the situation - thus provoking the
near resignation of the defence minister, Moven Mahachi, who found
that they actually had far greater control over the army than he did.
For the army top brass report directly to Mnangagwa, who is so
heavily
involved that he actually sustained a hand wound at the war front.
Mugabe has instructed him to oversee his Congo military operations,
giving him unparalleled military clout - which he has used to help
Billy Rautenbach gain a long list of mining concessions in the Congo.

The press reported that Rautenbach has rewarded various Congolese and
Zimbabwean politicians with large ex gratia payments for favours
received, though this did not prevent the DRC's minister of mines
from
cancelling all deals with him in March 1999 and effectively throwing
him out of the DRC. No such accidents happen to Mnangagwa. When Roger
Boka's United Merchant Bank went bust in 1998, it was found to have
lent Mnangagwa large sums. Despite that he seems to have some
difficulty in paying his rates: in June 1999 Harare city council
revealed that Mnangagwa was Z$410,231 in arrears on his rate
payments.

Zimbabwe's involvement in the DRC goes back much further than the
current war. When Zimbabwean troops were pulled out of Mozambique in
1988, South African businessmen - to Harare's fury - were quick to
scoop up the most lucrative deals there in the wake of the civil war.
Mugabe vowed this would not happen twice. In 1996 Mugabe gave Kabila
US$5 million to finance his rebellion against Mobutu. Just before
Kinshasa fell to Kabila, Zimbabwe Defence Industries (owned by the
government) concluded a US$53m deal to supply Kabila with everything
from food to uniforms and mortar bombs. ZDI was then used to
spearhead
Zimbabwe's economic penetration of the DRC. The company is extremely
secretive but in 1993, the last year when it gave out such
information, its directors included Zvinavashe and another Mugabe
intimate, Perence Shiri, the former head of the terrifying 5 Brigade.

Gradually the efforts of Shiri, Zvinavashe and Mnangagwa have led to
the network of interests seen in [3]Figure 2 (Zimbabwe's military
interests in the DRC). Zvinavashe and his brother are also directors
of Osleg (Operation Sovereign legitimacy) which, following the
Chinese
model, is seen as the economic wing of the Zimbabwean armed forces.
Osleg wanted, above all, to get its hands on the mining concessions
that Kabila had promised. The first such venture was with
Comiex-Congo, producing a new joint company, Cosleg. There followed a
joint venture with the Omani-owned Oryx Natural Resources to form
Oryx-Zimcon. In January 2000 Oryx Natural Resources bought Petra
diamonds and rechristened it Oryx Diamonds - in which Zidco holds
237,000 shares.

Despite the rows which have enveloped Oryx Diamonds since - its
flotation on the London stock exchange was blocked and its director,
Moses Anafu, forced to resign from the Commonwealth Observer Group
sent to monitor Zimbabwe's election in June - all these interests are
intact. All the indications are that Zimbabwe's political and
military
elites continue to draw large profits from their incursion into the
DRC. It is just as well for Zidco has fallen on evil days within
Zimbabwe - as any enterprise must given the parlous state of the
economy. Jayan Joshi now spends much of his days playing solitaire on
his computer for, thanks to the disastrous policies of his long-time
associate, Robert Mugabe, there is precious little else for him to
do.

Focus 19, September 2000.

Helen Suzman Foundation