THE mafia may enjoy an image romanticised by blockbuster movies such as Sopranos and The Godfather, but in real life they are reportedly Italy’s biggest business with an annual turnover of €140 billion, according to a report released in January by that country’s business group Confesercenti.
The report also claims that with about €65 billion in cash, the mafia is more liquid than any other Italian bank.Extortion, coercion and blackmail are the biggest sources of revenue for these organised criminal gangs who routinely intimidate businesses and for those who refuse to co-operate, violence and cold-blooded murder are handy tools in the mafia’s gory toolbox.
Although intimidation and violence are not common in the Zimbabwean business environment, blackmail and murky multi-million dollar mining deals involving shadowy Chinese and Russian business networks could signal the increasing foothold of shady underworld criminal webs in local business and political circles.
With the discovery of diamonds and other minerals, there are so many Chinese, Russian, Israeli and Lebanese networks — which overlap and are intertwined in many areas — doing business, mainly gangland-style, while siphoning and salting away the proceeds of corrupt transactions offshore.
The involvement of the Zimbabwean military and other security networks in the underworld deals seems to be aiding and abetting the looting, especially of the Marange diamond fields.
As a result, proceeds from the sale of diamonds from the rich Chiadzwa fields remain largely unaccounted for, at least according to Finance minister Tendai Biti who has lately been complaining diamond proceeds fall short of revenue projections.
A recent report on Zimbabwe by Global Witness, titled Financing a Parallel Government in Zimbabwe?, exposes the military’s dodgy involvement in diamond mining at Chiadzwa.
The military seems to be working closely with the Chinese mainly involved in Marange and Russians in mining deals where there is no transparency and accountability. The Russians are involved in diamond mining at Charleswood Estates in Chimanimani, as well as exploring and mining diamonds and platinum along the mineral-rich Great Dyke.
Charleswood Estates were seized from MDC-T treasurer Roy Bennett by government.
International media reports have linked Russians to the supply of military hardware to Zimbabwe in return for minerals. The Chinese are also said to be doing the same.
The Chinese have invested in Zimbabwe through Sino-Zimbabwe Development, a company registered in Zimbabwe, Singapore and the British Virgin Islands, although it has now ceased operations in Marange.
According to Global Witness, Sino-Zimbabwe is owned by a shadowy Chinese character, Sam Pa — who also uses the aliases Antonio Famtosonghiu Sampo Menezes, Xu Jinghua and Sam King — and Zimbabwe’s dreaded spy agency, the Central Intelligence Organisation.
Pa controls companies generally known as the Queensway syndicate. The Queensway syndicate is a shadowy Hong Kong-based syndicate accused of a range of crimes including corruption, profiteering with African natural resources while breaking terms of licence agreements, fuelling conflicts, interfering with elections, illegally trafficking diamonds and, less plausibly, being a secret arm of the Chinese government.
Global Witness says Sino-Zimbabwe is involved in diamond mining, cotton and property sectors. Among the properties Sino-Zimbabwe owns are Livingstone House, Gecko Gardens Hotel, the Pangolin Lodge and Imba Matombo Lodge — all located in Harare.
Another prominent figure in Sino-Zimbabwe is Russian-Israeli diamond magnate Lev Leviev, renowned as the world’s biggest cutter and polisher of diamonds.
In 2010, Mines and Mining Development minister Obert Mpofu admitted certain officials associated with Mbada and Canadile — the two companies he personally approved to joint-venture with government to mine diamonds in Chiadzwa — had “questionable records”.
He told a Parliamentary Portfolio Committee on Mines and Energy this was normal as it was “virtually impossible to find reputable partners in the diamond industry”.
Mpofu’s admission provided an insight into the otherwise increasingly murky world of joint ventures in Zimbabwe.
Mbada is a joint venture between the Zimbabwe Mining Development Corporation and Grandwell Holdings, a company registered in Mauritius and a subsidiary of New Reclamation Group (Reclaim), a South African scrap metal-recycling company.
The corporate ownership and shareholder structure of Mbada and Canadile remains largely cloaked in mystery.
Canadile is now defunct.
Until 2011, Grandwell was wholly-owned by Reclaim. In the last financial year, 25% of Mbada was passed on to a third party, Transfrontier, which has an opaque company structure shrouded in secrecy. The beneficial owners of Transfrontier are unknown.
The fact that Mbada, Transfrontier and associated companies are in places with zero rates of corporate tax such as Mauritius, Hong Kong, British Virgin Islands and Dubai, raises questions on where these firms pay their taxes and whether these arrangements are good deals for Zimbabwe.
In 2010, Zimbabwe blacklisted Core Mining shareholders and directors from the country for their alleged involvement in corruption, bribes and fraud at Marange. The blacklisted individuals include Robert van der Merwe, Yehuda Licht, Arnold Neil Lange, Subithry Naidoo, Kuberin Packrisamy, Marco Chiotti, Minesh Bungwadeen, Viken Arslanian, Komalin Packirisamy, Vejayanakumar Pickirisamy, Adrian Taylor and Allan John Sawyer.
Political analysts say the emergence of shadowy organisations and dodgy characters does not augur well for Zimbabwe’s economic development and democracy.
Media Centre director Earnest Mudzengi said diamonds could eventually have disastrous consequences for Zimbabwe.
“This is a potentially disastrous development that, if not checked, may take us to the extremes of a failed state. Remember what happened in Sierra Leone, Somalia and such other states?” Mudzengi said.
“We may end up on the fringes of warlordism if this orgy of unrestrained looting, unprofessional and unethical behaviour is not nipped in the bud.”
South African-based analyst Ricky Mukonza said these developments are symptomatic of the sanctions-busting activities similar to those of the Rhodesian era, and they only profit a few brave and risky merchants.
“The primary motive for a regime facing sanctions is survival and for the dealers, it’s money. Because of the high risks involved, they make huge profits. So the events in Marange are nothing new but something that emanated from the sanctions period,” he said.
Another political analyst Jonathan Gandari concurred, saying the mafia are a danger to the state as has been witnessed in Mexico.
“The mafia and corruption are cousins,” said Gandari.
“The emergence of the mafia should not only be frowned at, but be nipped in the bud because it is a cancer on the soul of society. Mafia has ruined countries like Mexico beyond repair.”