THE Zimbabwe National Army (ZNA)-owned Glass Finish Investments Pvt Ltd has reportedly received US$40 million to date in management fees in diamond mining concern Anjin despite not paying a cent for the stake, the Zimbabwe Independent has learnt.
Government sources told the Independent this week the military-owned company acquired the Zimbabwe Mining Development Corporation (ZMDC)’s 40% stake in Anjin in 2010, and has been receiving management fees from mining operations in the Marange district of Manicaland.
The ZMDC, along with other diamond mining companies Marange, Mbada and DMC, have all been targeted by the Zimbabwe Revenue Authority (Zimra) for tax arrears amounting to US$45 million.
Zimra sources gave the breakdown of the amounts allegedly owed by the diamond mining companies as follows: Marange US$5 million, Mbada US$22, 4 million, DMC US$11 million and ZMDC US$18,3 million.
They said the latter’s arrears “accrued from capital gains tax after it sold its 40% shareholding in Anjin in 2010 to Glass Finish which is a ZNA company,” said a source, adding “Glass Finish has to date received US$40 million in management fees despite not paying a cent for the shareholding.”
Another source said Glass Finish had received a total of US$78 million from Anjin since the company started trading diamonds in 2011. It is not clear whether the US$78 million included profit sharing proceeds, management fes and dividends.
Anjin, in which invested at least US$100 million, is thought to be three times smaller than Mbada Diamonds in size and output. Mbada recently announced it surpassed US1billion in total revenues grossed since it started operations in 2009.
The Chinese have been accused of creaming off US$200million from Anjin.
ZMDC refused to comment after initially promising to respond to emailed questions on this and other issues last week.
Zimbabwe’s diamond mining industry has been plagued by allegations of opacity, corruption and under-remittance of proceeds to Treasury, with the country’s cash-strapped government finally taking steps to plug leakages and bring sanity to the industry.
Previous investigations by this paper revealed how an intricate web of Chinese and Zimbabwean military networks control the country’s biggest diamond mining company, Anjin Investments (Pvt) Ltd, through front or nominee companies designed to camouflage the involvement of security forces.
Anjin is a joint venture between a Chinese firm, the Anhui Foreign Economic Construction (Group) Co Ltd, a large construction company which sources say is connected to the military-industrial complex in China, and Matt Bronze Enterprises which was formed by the Ministry of Defence/Zimbabwe Defence For ces through Glass Finish.
According to Global Witness, which monitors natural resource-related conflict and corruption, Brigadier-General Charles Tarumbwa holds a third of Anjin shares on behalf of the Ministry of Defence.
Tarumbwa reportedly bought Glass Finish as a shelf company from Prudentius Kativhu and Tinashe Kunze in 2009.
Anjin directors are listed as Chinese nationals Jiang Zhaoyao, who is the general manager, Chen Qing, Peng Zheng, Li Zhongiqi, Huang Xianjue and Tarumbwa, the only Zimbabwean director listed, as the company secretary and principal officer.
Tarumbwa was in 2006 listed by the United Nations as a Judge Advocate General at the Ministry of Defence and was on the EU sanctions list.
However, Anjin has in the past denied that the Zimbabwean military and police have a stake in the company.
“Anjin Investments has never been controlled by the Zimbabwean military or police. It is Anhui and Matt Bronze that benefit from Anjin Investments,” the company said. “As for how the government-related company Matt Bronze distributes its benefits, the Chinese side knows nothing at all.”
However, it has since been established Matt Bronze and Glass Finish are military-controled investment vehicles.