Wednesday, July 6, 2022

Botswana loses millions in Zimbabwe sanction busting scheme

The Botswana government is believed to have been cheated out of millions of Pula through a Zimbabwe government sponsored sanction busting strategy that involved setting up companies that siphoned money out of Botswana through transfer pricing, tax evasion and violation of foreign exchange regulations.

The Botswana Revenue Services (BURS) this week raided the offices of FCZ Timbers in Gaborone, a subsidiary of Allied Timbers Zimbabwe (Altim Timbers) which is wholly owned by the government of Zimbabwe.

Sunday Standard investigations have turned up information that FCZ Timbers, the Gaborone based company which is run by a Chief Executive Officer based in Zimbabwe and is audited by the Zimbabwe-based Ernst & Young, owed BURS millions in tax.

This comes a few years after Ramotswa Steel, a subsidiary of the Zimbabwean government-owned Zisco Steel closed shop amid reports that it was evading tax, running up losses through transfer pricing and siphoning money out of Botswana by violating foreign currency regulations.

FCZ Timbers and Ramotswa Steel are believed to be among a number of companies operated by the Zimbabwean government in Botswana as part of an elaborate sanction busting strategy by the Mugabe administration to raise the much needed foreign currency. Sources close to BURS say the tax man has set out to sniff out other companies operated by the Zimbabwean government in Botswana.

Sunday Standard was able to establish that FCZ Timbers started operating in Botswana more than a decade ago with branches in Phakalane, Palapye and Francistown as well as Gaborone and its local partner was motivational speaker, Raphael Sikwane. In an interview with Sunday Standard, Sikwane said, “It is true that I was a minority shareholder in FCZ Timbers.”

Sikwane says he left the company five years ago because its operations were secret.

“There was no transparency at all. As a responsible person, I would not want to sit in a board where things are done under the carpet,” he said.

Ananias Have, FCZ Divisional Manager South, would not discuss company business with Sunday Standard saying, “I am not allowed to speak to the press.”

A number of FCZ staff members who were surprised to learn that the company was wholly owned by the Zimbabwean government appealed to the Botswana government to intervene and ensure that they are given all their terminal benefits before the company leaves Botswana. BURS has impounded FCZ trucks and has flagged its fleet to ensure that the cars are not smuggled out of the country.

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