‘Panama cases to be investigated’
Happiness Zengeni and Tinashe Makichi
RESERVE Bank of Zimbabwe governor Dr John Mangudya said any of the offshore investment vehicles listed on the leaked Panama Papers which will be found to have been involved in the externalisation of foreign exchange will be investigated.
The Governor’s remarks comes after the International Consortium of Investigative Journalists released names of over 280 Zimbabweans, including prominent business people with links to offshore investment vehicles.
The Panama Papers are 11,5 million leaked documents that detail financial and attorney-client information for more than 214 488 offshore entities. The leaked documents were created by Panamanian law firm and corporate service provider Mossack Fonseca.
The leaked documents illustrate how wealthy individuals, including public officials, are able to keep personal financial information private. While the use of offshore business entities is often not illegal, ICIJ found that some of the shell corporations were used for illegal purposes, including tax evasion, and evading international sanctions.
Zimbabweans who are on the Panama Papers list, include Sable Wood Real Estate Limited whose beneficiary is James Redding Ramsay. Also notable on the list is local mining expert, Victor Gapare (Enua Limited), Jackson Murehwa (Dick Hudson Limited), Gavin Sainsbury (Pride Services) Geoffrey George Bain (Skimmer International Limited), Alex Mhembere (HR Consultancy Services Limited), and Glen Stutchbury (Nyati) among other notable names.
Though the full details of the leaked documents are yet to be released with ICIJ also releasing the names of beneficial owners of offshore shell companies, there are suspicions that some of them were involved in externalisation.
“Those found with illegal cases will be investigated. We also expect all the executives involved in such shenanigans as externalisation to make restitution by remitting funds back to Zimbabwe,” Dr Mangudya told The Herald Business last week.
He said externalisation was done by taking advantage of the over-liberalisation of the foreign exchange market in Zimbabwe under the guise of free funds.
“The externalisation of foreign exchange by Zimbabwean executives as highlighted in some of the Panama Papers is the tip of the ice berg of such untoward or unbecoming activities by Zimbabweans.
“As we earlier stated, such activities were done by taking advantage of the over liberalisation of the foreign exchange market in Zimbabwe under the guise of free funds,” said Dr Mangudya.
Dr Mangudya said it is a pity that people have been taking money out of the country through illicit means and the central bank is looking at setting up instruments to curb this problem.
“Externalisation of that nature bodes around morally blameworthy. That money which they externalised was generated by exporters whom we are trying to incentivise to produce more foreign exchange. Let’s not make the country poorer by externalisation,” said Dr Mangudya.
He said Zimbabweans must exercise self-discipline in the management of foreign exchange to transform the economy.
Speaking at the Zimbabwe Chamber of Commerce dialogue on cash challenges last week Dr Mangudya said the central bank continues to see suspicious transactions happening every day.
“Most of these funds are actually externalised through the normal banking system. There is much externalisation in this economy. These unscrupulous businesspeople are taking money.
“We are feeding the looters. You take money from a poor country to a rich country,” he said.
Dr Mangudya said Zimbabwe was not a poor country in terms of foreign exchange having exported over $1,7 billion between 1990 and 1996 and over $3,6 billion from 2010 to 2015 but it was losing between $1 billion and $2 billion a year through externalisation. He said as such there was need for to tighten policies on cash externalisation and stabilise the economy by removing the import dependency syndrome.