Zimbabwe's leading platinum-mining firm, Zimplats Holdings, allegedly used an offshore company to pay salaries for senior managers in violation of exchange control laws, according to documents leaked from a Panamanian law firm.
The allegations are part of a wide-ranging investigation into the global use of offshore tax havens that has led to calls for “an urgent full investigation” by Zimplats' majority shareholder, the South African firm Implats.
The so-called Panama Papers were first provided to the German newspaper Suddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists. That group coordinated a comprehensive review with reporting partners from 76 nations, including VOA’s Zimbabwe Service.
The documents from the Panamanian law firm Mossack Fonseca indicate that accountants Northern Wychwood used Mossack Fonseca to register a company named HR Consultancy in the Isle of Man to handle payments for senior managers of Zimplats Holdings limited.
“We receive the funds to cover the total salaries from Zimplats and pay the managers accordingly,” said a leaked correspondence dated November 5, 2012.
The documents claim that the senior managers to be paid by HR Consultancy are Zimbabwean citizens, but they do not list the names of the supposed recipients or the amounts allegedly paid.
Zimplats denies any involvement with HR Consultancy or transactions outlined in the leaked documents.
“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 the South African firm Implats.
Implats spokesman Johan Theron said Implats has no knowledge of HR Consultancy.
“As far as I could establish, we have never conducted any business with such an entity,” Theron said.
He said Implats has “prioritized 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.
Initiating 'full investigation'
He welcomed the Panama Papers disclosure and said Implats “will initiate an urgent full investigation into the purported Zimplats links with the Zimbabwe authorities.”
Documents reviewed by the VOA Zimbabwe Service program Studio7 show that Northern Wychwood continues to update HR Consultancy’s certificate of incumbency, with the latest filing done through Mossack Fonseca last year.
Zimbabwe Central Bank Governor John Mangudya said Zimplats’ alleged behavior would not be in line with government policy.
“There is no company or firm in Zimbabwe that is authorized to operate offshore accounts for the purpose of paying its senior managers who are Zimbabweans and working in Zimbabwe. That practice bodes around externalization and thus typical case of illicit financial flows,” said Mangudya in a written statement.
“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,” he explained.
The law firm 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 whether Northern Wychwood provides consultancy to Palatinate, Hanoverian and HR Consultancy, Northern Wychwood accountant Donna Summers told VOA: “We do not comment on matters pertaining to our clients.”
Repeated calls for further comment from Summers went unanswered.
Mossack Fonseca corporate liaison officer Jordan Spencer also refused to comment on his company’s relationship with HR Consultancy, Zimplats or Northern Wychwood, telling VOA, “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 last year said it is a director on Northern Wychwood Limited client companies. It lists Zimbabwe, South Africa, United Kingdom and Isle of Man as countries where its activities are conducted.
Directors Cairns, Ellis and Fearnhead did not respond to requests for comment.
Fearnhead was a director at the now dissolved African Minerals Development Limited. Ellis is a Zimbabwe-born accountant who once worked for the British firm FIHZL. Cairns posted on an old students’ social network that he worked for De Beers before setting up a trust fund in Isle of Man 1993. He lists an email address at Northern Wychwood.
Zimbabwe former Minister of Finance Tendai Biti oversaw Central Bank operations between 2009 and 2013.
Biti told VOA that if Zimplats set up an offshore company to pay salaries for its managers, then the managers at Zimplats also evaded paying taxes since they were being remunerated for work they did on Zimbabwean soil.
He said externalizing funds would violate several laws, including the Exchange Control Regulation of 1996, the Serious Offenses Act, and the Anti-Money Laundering Act.
A recent Zimbabwe Central Bank report says the country lost $3 billion through illicit financial flows between 2009 and 2012, while Africa as a whole lost $3 trillion in illicit financial flows during the same period.
Central Bank Governor Mangudya told the media in December that Zimbabwe lost more than $500 million in illicit financial flows in 2015 -- money which should have benefited the country’s struggling economy, he added.
The Panama Papers highlight the extent of shady offshore dealings that have robbed many countries of billions of dollars in taxes.
In its report, ICIJ said major banks are the big drivers behind the creation of hard-to-trace shell companies in the British Virgins Islands, Panama and other offshore havens.
The ICIJ said the revelations in this unprecedented global investigation into more than 11.5 million secret files are the first to highlight the extent of secret business done by banks, law firms and other middlemen that hide extraordinary – and often illegal – wealth.
Suddeutsche Zeitung reporting found tax authorities from several countries, including Germany, Britain, Iceland and the United States, have also acquired internal Mossack Fonseca data from a whistleblower. But the newspaper said that information trove is smaller and older than the documents released Sunday.
In February 2015, a cache of Mossack Fonseca documents obtained by German authorities led to a series of raids on German banks by investigators looking into possible money laundering and tax evasion.
Several banks – among them Germany's second-largest bank, Commerzbank – agreed to pay millions of euros in fines for helping customers evade taxes.
According to Suddeutsche Zeitung, German authorities are also considering legal action against Mossack Fonseca due to possible contribution to tax evasion.
The African Network of Centers for Investigative Reporting (ANCIR) contributed to this article.