ZIMBABWEAN business tycoon Kudakwashe Regimond Tagwirei
(pictured), accused of capturing the state for personal gain alongside with the
Presidium, has been slapped with sanctions by the United States government,
which will no doubt affect his huge business empire.
Tagwirei and his energy firm Sakunda Holdings were added to
the sanctions list on Wednesday by the United States Department of the
Treasury’s Office of Foreign Assets Control (Ofac). There was already
speculation that Tagwirei and Sakunda could be sanctioned in this manner. For
example, in October 2019, the Netherlands-based multinational commodity trading
company, Trafigura Group Pte Ltd indicated that it intended to buy out Sakunda
Holdings from the local entity Trafigura Zimbabwe under which oil firm Puma
Energy operates.
At the time, Trafigura Pvt Ltd held a minority stake of 49%
in Trafigura Zimbabwe, with Sakunda Petroleum holding a controlling stake of
51%. But, in December 2019, Trafigura Pvt Ltd announced it had signed an
agreement to become the 100% owner of Trafigura Zimbabwe a deal which is
awaiting regulatory approval.
“Definitely this is going to affect him (Tagwirei). He has
got a lot of assets outside Zimbabwe so definitely the ways things are going
they will be frozen there,” a source privy to this matter to told the Zimbabwe
Independent.
“He has got assets in one of the offshore jurisdictions
like Mauritius and three other countries and I think it will be very difficult
to transact using those offshore companies.”
“But, businesswise, it’s not going to really affect our
economy as a whole as Tagwirei’s empire spreads across all sectors of the
economy. Tagwirei could have a net worth close to US$1 billion,” the source
said.
Financial expert Persistence Gwanyanya said transactions
with these sanctioned parties were going to be affected
“The effect of sanctions is that the transactions relating
to Sakunda and his outside business partners will be significantly affected,
especially those involving the United States dollar…so the operations of the
affected companies are going to be affected by the mere fact of Sakunda being
placed on the sanctions list.”
He said the sanctions would also affect business dealings
of Sakunda Holdings and Tagwirei with local firms who will seek to distance
themselves from both.
Since the former late Zimbabwe president Robert Mugabe’s
2017 departure, Tagwirei has been using a combination of opaque business
dealings and his relationship with President Emmerson Mnangagwa to grow his
business empire and rake in millions of US dollars, according to Ofac.
Tagwirei’s dealings with the leadership have also resulted
in Sakunda Holdings enjoying the lion’s share of Zimbabwe’s fuel market which
is where they are expected to be most hurt. “It is a big win for players who
are then going to fill in the gap that has been left by Sakunda Holdings because
it has been dominating in the business space in this country. The fact that
Sakunda is going to be impacted negatively will create some space for other
players,” Gwanyanya said.
Tagwirei and Sakunda’s connection to fuel was mainly
through the Reserve Bank of Zimbabwe’s monthly foreign currency allocations or
letters of credit to import fuel.
RBZ governor John Mangudya said none of the letters of
credit for foreign currency used to import fuel were made on behalf Sakunda
Holdings.
“If you check all the schedules, I don’t see schedules of
Sakunda on the LCs for the purpose of the fuel. All fuel companies, called the
oil marketing corporate companies of Zimbabwe, such as Total and Engen, those
are the companies that we see,” he told the Independent yesterday.
“Who established the LCs? These are established by
commercial banks so, because they are done at that level, it means it is at
that commercial bank level where that compliance are done. So, before they come
to us for allocations or the LCs they first have to go through the commercial
banks. They must first pass the compliance levels of the commercial banks
before they get anything from us. We are still studying the communication from
Ofac and its implications on Zimbabwe. That is the official position. Obviously
when Ofac issues rules, they need compliance”.
Mangudya said commercial banks which represent Tagwirei and
Sakunda Holdings will be affected as they have to comply with the Ofac rules.
“The onus is on the commercial bank who Sakunda and
Tagwirei deal with to ensure compliance with Ofac. They don’t just come over to
the RBZ,” he said.
In July 2019, it was also reported that Tagwirei possibly
held about 30% shares of one of Zimbabwe’s largest financial institutions, CBZ
Holdings, through the company Akribos Capital, which is said to be linked to
the businessman.
In an interview with the Independent in February, CBZ
Holdings chairperson Marc Holtzman, when asked of Tagwirei’s involvement in the
financial institution said:
“Yes, I have met him. I know most of our major
shareholders…”
CBZ Holdings was already dealing with a US$3,8 billion
penalty which had been slapped on the bank by Ofac, making the involvement of
Tagwirei in the institution also problematic. Zimbabwe Independent
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