The BVI is a tax haven that has been used to stash away laundered money and capital siphoned out of countries through tax evasion. “It has never been clear why the board led by Moxon decided to set up parallel investment vehicles in the BVI. That was never fully explained to shareholders and we must know what is happening with those companies and how they are performing,” said one of the shareholders.
“We cannot run business in such shady ways. Shareholders have the right to be informed about what is happening with their shares. That is best practice the world over.”
The BVI has become home for thousands of companies that evade tax in their home countries, among them shady cartels from China, Europe and Africa. It does not ask for most taxes normally charged around the world, among them income, capital gains, gift, inheritance and value added taxes. It charges only nominal fees for the establishment of companies that is usually speedy.
The companies have bled home countries of investment of billions of dollars through the externalisation of profits and investment capital.
$11.7 million transferred to BVI
Moxon, in his role as chairman of Meikles, presided over the setting up of subsidiaries and investment as well business growth vehicles in the BVI. One was Gondor Capital, a shareholder company that owes Meikles an initial $11.7 million transferred to it in 2008.
“Gondor’s operations in the BVI are shrouded in secrecy. The almost $12 million it received in 2008 must have accumulated a lot in terms of interest but nothing is being said about this. Statements produced make thin reference to that offshore company, which represents funds due from another of Moxon’s companies called Coolbay,” said another shareholder on condition of anonymity.
Gondor assumed the liability and is purportedly holding the funds for Meikles’s regional expansion. Shareholders expect that the mysterious funds should have accrued a return on investment or been paid back to Zimbabwe.
Unhappy shareholders told The Zimbabwean that Moxon should prove these funds exist and an independent board should determine the future use of the funds to alleviate the burden of heavy borrowings and to save jobs in Zimbabwe.
Gondor, which was registered in the BVI on March 29, 2011 was supposed to generate some $200m that would be used to grow business in Zimbabwe. In 2011, a Meikles statement described the investment in Gondor as “a decisive move by the major shareholders to mobilise upwards of $200million for investment in Meikles and Zimbabwe and augurs well for the future growth of the company and its subsidiaries”.
The failure to mobilise the $200m or so, stockholders said, could be in violation of the RBZ terms of approval of the transaction.
Mentor Africa Limited is another BVI domiciled outfit that shareholders are in the dark about.
Shareholders have been told that “Mentor Africa Limited is a significant private equity group being established to invest in Africa and emerging markets.” The 2011 Meikles annual report stated that Mentor, which also has South African origins, was holding some $4.5 million on behalf of a South Africa based subsidiary hospitality entity, Cape Grace Group.
“Interestingly, Mentor Africa Limited is also a company registered in the BVI, protected by all the benefits of the jurisdiction. Shareholders have not been told where the trading results of the investment accrue,” said another shareholder.
Cape Grace Hotel, which is owned by the Cape Grace Group, is registered in the BVI as well as South Africa. Moxon, Brett Till, Stephen Levenburg and Russell Peters are its directors. “There is need for Moxon to explain the decision to domicile Gondor, Mentor and Cape Grace Hotel in the BVI and how they are financially performing. Ass shareholders, we will have no choice but to push for Moxon to step down as executive chairman of the board,” said the third shareholder.
Moxon has deferred questions from The Zimbabwean to the Meikles company secretary, Thabani Mpofu, who has stated that he would not “dignify the questions with our response”.
Post published in: Business