News / Local
'Tagwirei gift to Guvamatanga a bribe'
10 Oct 2021 at 20:32hrs | Views
Treasury secretary George Guvamatanga's acceptance of lavish gifts from corruption-accused business tycoon Kudakwashe Tagwirei is legally questionable, lawyers have said.
Guvamatanga spared no expense last Friday while celebrating his 50th birthday with three South African performers – Mafikizolo, Makhadzi and Louis Mhlanga – flown in to entertain selected guests.
Tagwirei, the biggest beneficiary of government contracts in the last five years, showered gifts on the government paymaster, pledging a private jet, US$50,000 in spending money, an executive box at the Emirates Stadium in London and a shirt signed by Arsenal captain, Pierre-Emerick Aubameyang.
"We're on sanctions, but we make things happen over there (in the United Kingdom)," Tagwirei boasted, referring to travel and financial sanctions imposed on him by the United Kingdom in July for "poisoning the well of democracy" through corruption.
Lawyer Tinomudaishe Chinyoka, who has been on President Emmerson Mnangagwa's legal team, said Tagwirei's gift to Guvamatanga reeked of corruption.
"Nothing about that gift passes the corruption smell test. Given the allegations against the giver and how he benefits from certain decisions by the ministry of finance, the question ‘what is he paying for' is a valid one," Chinyoka said.
"With enough digging, it might not be hard to conclude it's also unlawful."
Prominent legal eagle Advocate Thabani Mpofu said the gift by Tagwirei was a bribe.
Mpofu told ZimLive: "The evidently turpius gift shows that both the giver and the receiver have received an education in fraud. It is completely reprehensible and drags the department of finance into moral defilement.
"It is impossible to ignore the fact that the two are in an ongoing relationship over which serious questions have been and continue to be raised. Guvamatanga is the government paymaster and Tagwirei is the biggest beneficiary of some of the most shady and undue payments made under this government."
Mpofu said Guvamatanga had fallen foul of section 170(1)(a) of the Criminal Law (Codification and Reform) Act and Tagwirei's actions could be penalised under the same anti-bribery law in section 170(1)(b).
The cited law says:
(1) Any
(a) agent who obtains or agrees to obtain or solicits or agrees to accept for himself or herself or any other person any gift or consideration as an inducement or reward
(i) for doing or omitting to do, or having done or omitted to do, any act in relation to his or her principal's affairs or business; or
(ii) for showing or not showing, or having shown or not shown, any favour or disfavour to any person or thing in relation to his or her principal's affairs or business;
knowing or realising that there is a real risk or possibility that such gift or consideration is not due to him or her in terms of any agreement or arrangement between himself or herself and his or her principal;
or
(b) person who, for himself or herself or any other person, gives or agrees to give or offers to an agent any gift or consideration as an inducement or reward
(i) for doing or omitting to do, or having done or omitted to do, any act in relation to his or her principal's affairs or business; or
(ii) for showing or not showing, or having shown or not shown, any favour or disfavour to any person or thing in relation to his or her principal's affairs or business;
knowing or realising that there is a real risk or possibility that such gift or consideration is not due to the agent in terms of any agreement or arrangement between the agent and his or her principal; shall be guilty of bribery.
Said Mpofu: "The penalty for this kind of criminal misconduct is a period of up to 20 years in prison. Section 170(2) aids the prosecution with the presumption that a gift given under these circumstances is given as a bribe. The bribery can be in respect of a transaction that has already taken place or it may be in respect of future indeterminate transactions.
"Effectively, the onus is on the two to demonstrate the purity of their relationship. This is the kind of issue that any self-respecting Anti-Corruption Commission must become seized with."
At the heart of the lawyers' concerns is that Tagwirei, through his company Sakunda Holdings, managed an opaque US$3 billion programme called Command Agriculture which a parliamentary committee said was a scheme to fleece the public purse with zero accountability.
Sakunda Holdings redeemed government treasury bills at up to ten times their official value, accelerating the devaluation the Zimbabwe dollar and increasing the price of essentials such as food, fuel and medicines.
Through his company, Fossil Group, Tagwirei is also receiving millions of dollars from treasury for road construction contracts, while another of his companies, Landela Investments, has reportedly received US$110 million from the government to import buses, a contract that was awarded without going to tender.
Tagwirei has also concluded an opaque deal with the government, combining his mining assets with those of the government to form a company called Kuvimba. Tagwirei's mines were formally owned by Sotic, one of whose shareholders, South African Christopher Fourie, refused to sign off on the transaction.
When Tagwirei fell ill last year with Covid-19 earlier this year, Fourie revealed that Guvamatanga took over negotiations to ensure he goes away quietly, the Financial Times reported.
"Kuda is currently incapacitated… happy to talk to you though," Guvamatanga, a former chief executive of the former unit of Barclays in Zimbabwe, told Fourie in messages which date from a period earlier this year when Tagwirei was flown overseas for treatment.
"I can assist on this matter but not when you are threatening everyone like this," he said. "You need to focus on what you personally want to get out from all this. Everything else will not help you."
In another message, Guvamatanga said: "In the absence of KT (Kudakwashe Tagrirei) I have been speaking to Obey on your matter. To enable me to push for a solution may you send me a summary of what you would regard as a full and final settlement claim. It is in our interest to have this matter urgently resolved amicably."
The Obey that Guvamatanga was referring to is Obey Chimuka, an associate of Tagwirei who fronts some of his companies, including the Fossil Group which is involved in road construction and imports agricultural products and chemicals for the government.
Fourie told the Financial Times he sent Guvamatanga a proposed deal to sell his shares in Pfimbi, a subsidiary of Sotic, to Tagwirei.
Fourie said Guvamatanga and Tagwirei "appeared to be very close and I would classify them as personal friends." Meeting the civil servant to discuss Tagwirei's business affairs was "probably not appropriate," Fourie admitted. But, he added, "it is the only way business is done in Zimbabwe."
Tinashe Murapata, an economic analyst, said: "From a corporate governance perspective, Guvamatanga should refuse the gift from Tagwirei.
"From a public finance perspective, it spells disaster when the main beneficiary of the condonation bill (parliament pardon for over expenditure) is gifting the country's treasurer."
The lawyer Chinyoka believes Guvamatanga has committed a sackable offence, describing him as "tone deaf and exhibiting misplaced arrogance" after he stood up at his birthday to declare that he would be topping up Mhlanga's performance fee five-fold.
"It's not like he is doing an amazing job: the currency is tanking under his watch. He should be fired," Chinyoka said.
On Sunday, Guvamatanga defended his extravagant party, and his pledge to pay five times more than he was charged by Mhlanga, the jazz musician. Guvamatanga said Mhlanga would find the money in his account in South Africa – raising potential breaches of exchange control regulations.
"I worked for a big international bank for 30 years and I was paid in offshore accounts. There are millions in that account," Guvamatanga told The Standard.
"My package at Barclays, including my bonus was US$3 million. It is all above board. I have a known offshore account, and have interests across most sectors of the economy, from insurance to agriculture to distribution and others.
"I cannot pretend to be poor."
ZimLive is reliably informed that Guvamatanga recently splashed on 1,000 head of cattle for his state-of-the-art dairy farm in Chivhu. The cows were bought from Botswana and Namibia, one source said.
On Sunday, questions were also being raised about the quantum of Guvamatanga's payout by Barclays when he left the struggling bank in 2017.
The Zimbabwe Independent newspaper reported at the time that he had been forced out as managing director with a US$354,000 exit package.
Guvamatanga's civil service salary is RTGS$170,000, about US$1,900 at the government's discredited official rate, or US$1,000 on the black market where most foreign currency transactions are traded.
Remarked one banker: "He keeps making these endless references to his Barclays payoff. Has he been living without expenditure?"
Guvamatanga, finance minister Mthuli Ncube and central bank governor John Mangudya decided in 2019 to end dollarisation and convert all United States dollar balances to Zimbabwe dollars at a rate of 1:1, wiping out savings as the relaunched currency quickly lost value.
"Guvamatanga is out of touch with reality and common sense," said Chinyoka. "He sits at the top of a ministry that's daily making dodgy decisions which erode the value of our pensions and savings.
"No-one cares about his riches. What matters is that he is the CEO of the ministry that made our money worthless by the stroke of a pen, a ministry which is failing to stabilise our currency. The ministry that changed us from being USD millionaires to ZWL millionaires.
"He led those decisions, but they didn't affect him. He obviously knew it was coming, and if he still has millions in United States dollars, it's legitimate to ask how he managed that when we couldn't."
Guvamatanga spared no expense last Friday while celebrating his 50th birthday with three South African performers – Mafikizolo, Makhadzi and Louis Mhlanga – flown in to entertain selected guests.
Tagwirei, the biggest beneficiary of government contracts in the last five years, showered gifts on the government paymaster, pledging a private jet, US$50,000 in spending money, an executive box at the Emirates Stadium in London and a shirt signed by Arsenal captain, Pierre-Emerick Aubameyang.
"We're on sanctions, but we make things happen over there (in the United Kingdom)," Tagwirei boasted, referring to travel and financial sanctions imposed on him by the United Kingdom in July for "poisoning the well of democracy" through corruption.
Lawyer Tinomudaishe Chinyoka, who has been on President Emmerson Mnangagwa's legal team, said Tagwirei's gift to Guvamatanga reeked of corruption.
"Nothing about that gift passes the corruption smell test. Given the allegations against the giver and how he benefits from certain decisions by the ministry of finance, the question ‘what is he paying for' is a valid one," Chinyoka said.
"With enough digging, it might not be hard to conclude it's also unlawful."
Prominent legal eagle Advocate Thabani Mpofu said the gift by Tagwirei was a bribe.
Mpofu told ZimLive: "The evidently turpius gift shows that both the giver and the receiver have received an education in fraud. It is completely reprehensible and drags the department of finance into moral defilement.
"It is impossible to ignore the fact that the two are in an ongoing relationship over which serious questions have been and continue to be raised. Guvamatanga is the government paymaster and Tagwirei is the biggest beneficiary of some of the most shady and undue payments made under this government."
Mpofu said Guvamatanga had fallen foul of section 170(1)(a) of the Criminal Law (Codification and Reform) Act and Tagwirei's actions could be penalised under the same anti-bribery law in section 170(1)(b).
The cited law says:
(1) Any
(a) agent who obtains or agrees to obtain or solicits or agrees to accept for himself or herself or any other person any gift or consideration as an inducement or reward
(i) for doing or omitting to do, or having done or omitted to do, any act in relation to his or her principal's affairs or business; or
(ii) for showing or not showing, or having shown or not shown, any favour or disfavour to any person or thing in relation to his or her principal's affairs or business;
knowing or realising that there is a real risk or possibility that such gift or consideration is not due to him or her in terms of any agreement or arrangement between himself or herself and his or her principal;
or
(b) person who, for himself or herself or any other person, gives or agrees to give or offers to an agent any gift or consideration as an inducement or reward
(i) for doing or omitting to do, or having done or omitted to do, any act in relation to his or her principal's affairs or business; or
(ii) for showing or not showing, or having shown or not shown, any favour or disfavour to any person or thing in relation to his or her principal's affairs or business;
knowing or realising that there is a real risk or possibility that such gift or consideration is not due to the agent in terms of any agreement or arrangement between the agent and his or her principal; shall be guilty of bribery.
Said Mpofu: "The penalty for this kind of criminal misconduct is a period of up to 20 years in prison. Section 170(2) aids the prosecution with the presumption that a gift given under these circumstances is given as a bribe. The bribery can be in respect of a transaction that has already taken place or it may be in respect of future indeterminate transactions.
"Effectively, the onus is on the two to demonstrate the purity of their relationship. This is the kind of issue that any self-respecting Anti-Corruption Commission must become seized with."
At the heart of the lawyers' concerns is that Tagwirei, through his company Sakunda Holdings, managed an opaque US$3 billion programme called Command Agriculture which a parliamentary committee said was a scheme to fleece the public purse with zero accountability.
Sakunda Holdings redeemed government treasury bills at up to ten times their official value, accelerating the devaluation the Zimbabwe dollar and increasing the price of essentials such as food, fuel and medicines.
Tagwirei has also concluded an opaque deal with the government, combining his mining assets with those of the government to form a company called Kuvimba. Tagwirei's mines were formally owned by Sotic, one of whose shareholders, South African Christopher Fourie, refused to sign off on the transaction.
When Tagwirei fell ill last year with Covid-19 earlier this year, Fourie revealed that Guvamatanga took over negotiations to ensure he goes away quietly, the Financial Times reported.
"Kuda is currently incapacitated… happy to talk to you though," Guvamatanga, a former chief executive of the former unit of Barclays in Zimbabwe, told Fourie in messages which date from a period earlier this year when Tagwirei was flown overseas for treatment.
"I can assist on this matter but not when you are threatening everyone like this," he said. "You need to focus on what you personally want to get out from all this. Everything else will not help you."
In another message, Guvamatanga said: "In the absence of KT (Kudakwashe Tagrirei) I have been speaking to Obey on your matter. To enable me to push for a solution may you send me a summary of what you would regard as a full and final settlement claim. It is in our interest to have this matter urgently resolved amicably."
The Obey that Guvamatanga was referring to is Obey Chimuka, an associate of Tagwirei who fronts some of his companies, including the Fossil Group which is involved in road construction and imports agricultural products and chemicals for the government.
Fourie told the Financial Times he sent Guvamatanga a proposed deal to sell his shares in Pfimbi, a subsidiary of Sotic, to Tagwirei.
Fourie said Guvamatanga and Tagwirei "appeared to be very close and I would classify them as personal friends." Meeting the civil servant to discuss Tagwirei's business affairs was "probably not appropriate," Fourie admitted. But, he added, "it is the only way business is done in Zimbabwe."
Tinashe Murapata, an economic analyst, said: "From a corporate governance perspective, Guvamatanga should refuse the gift from Tagwirei.
"From a public finance perspective, it spells disaster when the main beneficiary of the condonation bill (parliament pardon for over expenditure) is gifting the country's treasurer."
The lawyer Chinyoka believes Guvamatanga has committed a sackable offence, describing him as "tone deaf and exhibiting misplaced arrogance" after he stood up at his birthday to declare that he would be topping up Mhlanga's performance fee five-fold.
"It's not like he is doing an amazing job: the currency is tanking under his watch. He should be fired," Chinyoka said.
On Sunday, Guvamatanga defended his extravagant party, and his pledge to pay five times more than he was charged by Mhlanga, the jazz musician. Guvamatanga said Mhlanga would find the money in his account in South Africa – raising potential breaches of exchange control regulations.
"I worked for a big international bank for 30 years and I was paid in offshore accounts. There are millions in that account," Guvamatanga told The Standard.
"My package at Barclays, including my bonus was US$3 million. It is all above board. I have a known offshore account, and have interests across most sectors of the economy, from insurance to agriculture to distribution and others.
"I cannot pretend to be poor."
ZimLive is reliably informed that Guvamatanga recently splashed on 1,000 head of cattle for his state-of-the-art dairy farm in Chivhu. The cows were bought from Botswana and Namibia, one source said.
On Sunday, questions were also being raised about the quantum of Guvamatanga's payout by Barclays when he left the struggling bank in 2017.
The Zimbabwe Independent newspaper reported at the time that he had been forced out as managing director with a US$354,000 exit package.
Guvamatanga's civil service salary is RTGS$170,000, about US$1,900 at the government's discredited official rate, or US$1,000 on the black market where most foreign currency transactions are traded.
Remarked one banker: "He keeps making these endless references to his Barclays payoff. Has he been living without expenditure?"
Guvamatanga, finance minister Mthuli Ncube and central bank governor John Mangudya decided in 2019 to end dollarisation and convert all United States dollar balances to Zimbabwe dollars at a rate of 1:1, wiping out savings as the relaunched currency quickly lost value.
"Guvamatanga is out of touch with reality and common sense," said Chinyoka. "He sits at the top of a ministry that's daily making dodgy decisions which erode the value of our pensions and savings.
"No-one cares about his riches. What matters is that he is the CEO of the ministry that made our money worthless by the stroke of a pen, a ministry which is failing to stabilise our currency. The ministry that changed us from being USD millionaires to ZWL millionaires.
"He led those decisions, but they didn't affect him. He obviously knew it was coming, and if he still has millions in United States dollars, it's legitimate to ask how he managed that when we couldn't."
Source - zimlive
