Shadowy deals with Iran breach IMF rules

Zimbabwe could be in further trouble with the International Monetary Fund following revelations that the government, through the Office of the President, formed secret companies to trade with Iran.


A confidential document addressed to the IMF that was leaked to The Zimbabwean this week indicates that the Ministry of State for Presidential Affairs (MSPA), headed by Didymus Mutasa, set up several shadowy companies. Two of them were formed in 2010 to trade in oil and refined petroleum products with Iran.

Established in 2009 after the formation of the Government of National Unity, the MSPA falls directly under and reports to President Robert Mugabe, but its mandate remains mysterious.

The 79-page document reports that its main purpose was to form parallel structures to those of the GNU, whereby the Zanu (PF) side of the coalition would run its own finances without being subjected to oversight by any institution, including the Ministry of Finance and the IMF.

“The unofficial purpose of the MSPA was to provide a parallel system of off-the -books financing outside the scrutiny of anyone, whether the political opposition or Bretton Woods institutions,” says the report.

The IMF’s Articles of Agreement oblige member countries to furnish it with information such as the establishment of oil trading companies with Iran, but the Reserve Bank of Zimbabwe has not done so to date.

In June 2003, the IMF Executive Board suspended Zimbabwe’s voting rights after the country scored badly in policy implementation and was failing to service its ballooning debt. The report says the MSPA “set up numerous front companies and “set out to engage in transactions worth hundreds of millions of dollars with no apparent disclosures or oversight”.

Lionshow Trading (Pvt) Limited was registered locally and then incorporated in the Emirate of Ras al Khaimah, part of the United Arab Emirates, as Lionshow Resources Limited. The establishment of the two companies followed various high level meetings between the MSPA and several Iranian ministries, including the Ministry of Petroleum and that of Defence and Logistics, mostly for the purchase of oil products.

It is noteworthy that just before the companies were formed, Iranian Prime Minister Mahmoud Ahmadinejad, paid a controversial visit to Zimbabwe in April 2010. “During the visit, Iran’s Deputy Minister for International Affairs (in the) Ministry of Petroleum, Noghrehkar Shirazi, and…Mutasa, executed an agreement entitled ‘Memorandum of Understanding on Oil Co-operation between (the) Islamic Republic of Iran and (the) Republic of Zimbabwe’,” says the document.

At the time, there was speculation that Mugabe and Ahmadinejad had signed an agreement for Iran to mine uranium in Zimbabwe.

In June 2010, states the report, Retired Brigadier General Asher Walter Tapfumaneyi, who was the Principal Director in the MSPA and is a former senior secret intelligence operative, travelled to Tehran, the Iranian capital, for negotiations with the petroleum ministry.

Mutasa also visited Tehran 12 months later, but the report does not indicate the purpose or outcome of the trip. The oil products were to be shipped through Beira, but it remains unclear if any shipments were made or how the ministry would finance the purchases.

An incumbency certificate issued on December 21 2011 curiously mentions Tapfumaneyi as the major shareholder in the Emirates-based Lionshow Resources Limited, with 50 percent shareholding. This was despite the fact that he was the principal director in Mutasa’s ministry that claimed that the company was a government “front agent”.

Gerald Nqobile Mlotshwa (25 percent) and Tangisayi Tapera (25 percent) are the other shareholders on the certificate. In what could reveal a sharp conflict of interest, Mlotshwa, a lawyer, is understood to have numerous links to the government and has represented Mutasa and Tapfumaneyi in the past.

He has also legally represented the National Indigenisation and Economic Empowerment Board (NIEEB) and the Zimbabwe Mining Development Company (ZMDC) – both heavily involved in diamond mining. He is a senior partner at Titan Law Chambers, which is registered as the office of the locally based Lionshow Trading (Pvt) Limited.

Repeated efforts to get a comment from Mutasa were unsuccessful as his number was not reachable. Justice Minister Emmerson Mnangagwa recently told Parliament that Mutasa was ill.

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