Rot at sovereign wealth fund exposed

Zimbabwe’s sovereign wealth fund reportedly paid a ‘grossly inflated’ $1.6bn to unknown private individuals to buy their shares in a mining conglomerate with recent links to Kudakwashe Tagwirei, a controversial presidential adviser and ruling party donor accused of corruption. The Daily Maverick reports that the massive debt-fuelled transfer of public wealth, an amount equivalent to 5% of the nation’s GDP, to Kuvimba Mining House, is exposed in an investigation by The Sentry, a US-based investigative organisation that tracks corruption. The Sentry said evidence acquired by the Zimbabwean media outlet, The NewsHawks, indicated that the funds were used by the Mutapa Investment Fund to purchase shares in Kuvimba, which owns about a dozen gold, lithium, nickel and platinum mines. ‘The Sentry’s analysis suggests that Mutapa paid a grossly inflated price for the shares,’ it said. The report noted that until recently, the state had owned 65% of Kuvimba and private investors had held 35% of the shares. However, The NewsHawks in April revealed that Mutapa had bought out the private investors for $1.6bn using government debt.

DM notes that the report said that Mutapa had received $1.9bn in government loans to revive failing state-owned enterprises, more than 20 of which it has shares in. The report says that if The NewsHawks investigation was correct, then about four-fifths of this $1.9bn debt had been used to pay a few private anonymous shareholders in Mutapa. The Sentry in 2021 revealed how Tagwirei was a secret owner of up to 35% of Kuvimba. It revealed then that Kuvimba’s private investors included Pfimbi Resources, a company controlled by Tagwirei. Pfimbi was owned by two trusts: the Kudakwashe Tagwirei Trust, whose beneficiaries were his family, and the Eagles Trust, whose beneficiaries were unknown.

Full Daily Maverick report