Zimbabwean company believed to be siphoning money out of Botswana through transfer pricing
Zimbabwean company believed to be flouting Botswana forex, company and nancial
More than three Zimbabwean ministers implicated in the scandal
Team of Zimbabwean investigators was recently in Botswana
Zimbabwean ministers making clandestine efforts to buy Botswana based company in shady deal
A number of Zimbabwean ministers face investigation for allegedly using the Botswana based Ramotswa / Tswana Steel & Iron Co for corrupt ends.
Indications are that the company has also been flouting Botswana’s company regulations, foreign exchange regulations and financial regulations.
Information passed to The Sunday Standard suggests that the company may have sneaked millions of pulas out of Botswana to South Africa through the backdoor, using transfer pricing.
The company is currently being investigated by the Zimbabwean National Economic Conduct Inspectorate (NECI) for possible transfer pricing.
This follows a case in which the Botswana based company paid R1.6 million to Macsteel in South Africa for “technical services” under questionable circumstances.
Other questionable money transfers out of Botswana include payments of US$5 million and R 6.4 million to the Mineral Marketing Corporation of Zimbabwe.
The Zimbabwean parent company Zisco, which is owned by the Zimbabwean company, is also believed to have used the Botswana Company to sneak money out of the country into Botswana.
Zisco is said to have overpaid more than US$500 000 to purchase Ramotswa\Tswana Steel. It was suspected to have been a way of transferring money to Botswana on the pretext of acquiring the company by Zisco officials.
Ramotswa\Tswana Steel is also accused of flouting Botswana’s foreign exchange regulation. According to a report by the NCI the Botswana based company has been buying forex on the black market from Zimbabwean company officials based in Botswana.
It has also emerged that Zimbabwean ministers were using the Botswana Company as a piggy bank.
For example the company has spent more than P100 000 on hotel expenditure for the Indegenisation and Empowerment Minister Samuel Mumbengegwi, Science and Technology Minister Sithembiso Nyoni, Higher Education Minister Stan Mudenge and the late ZANU PF Member of Parliament Tirivari Mudariki.
The company is also feared to have evaded Botswana’s tax by making suspicious donations to ghost beneficiaries. It has also emerged that in some instances, the company cooked purchase orders, selling steel billets as scrap metal and manipulating supply of contracts.
The company is also at the centre of a row in Zimbabwe, as it has emerged that senior Zimbabwean politicians are making clandestine efforts to buy it in a shady US$3 million deal.
Sources said top politicians working with Ramotswa/Tswana MD, James Chininga, and his business manager, Shelton Chivhere, were trying to acquire the companies that had proved to be critical to Zisco’ operations. The two subsidiaries are owed money by Zisco and have made a lot of payments on behalf of their parent company.
NECI investigators who recently went to Botswana to investigate the Zisco corruption discovered plans were already underway to sell the two subsidiaries for US$3 million by repaying their parent firm funds that were used to purchase them in 2001.
Zisco, the largest public enterprise and only integrated steelworks north of the Limpopo, is registered as a private company, which is owned 91 percent by the government. The other 9 percent is owned by six different shareholders.
Its group of companies includes Zisco Distribution Centre, which sells its products, Lancashire Steel that produces items like brick force, gates and galvanised wire, Zisco Mines dealing in iron ore, Ramotswa/Tswana Steel which manufactures steel products and the Ziscosteel Agricultural Manufacturing Company that makes ox-drawn ploughs, scotchcarts and hoes.
The steel giant also has subsidiaries in South Africa, Namibia and Zambia. Zisco owns these entities 100%.