Inside Zimbabwe Inc

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 Figure 1) including 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; 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 and a director of Woolworth Trading until the end of 1990. He is also a director of Oporto Investments, Galant Distribution, Galhold Investments, 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 the Figure showing 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.