Cape Town – US authorities are investigating an oil deal originally fronted by President Jacob Zuma’s nephew, mining magnate Khulubuse Zuma, the latest leak in the Panama Papers has revealed.
Federal authorities are in a tussle with hedge fund Och-Ziff Capital Management Group over a possible criminal guilty plea amid a five-year international bribery investigation, according to the Wall Street Journal this month.
The Justice Department wants the company to plead guilty, which would be rare for a major financial institution, the newspaper said.
The probe examined how the hedge fund company paid bribes to government officials to obtain an investment from Libya’s sovereign-wealth fund and in natural-resources deals in other African countries.
The authorities investigating this requested information from law firm Mossack Fonseca regarding communication with Foxwhelp and Caprikat - the Zuma link, the latest Panama Papers leak by South Africa's amaBhungane Centre for Investigative Journalism revealed.
The Panama Papers is a tranche of millions of leaked financial documents detailing a trove of billions sheltered in tax havens, and pocketed by political power players around the world.
It details the internal operation at Mossack Fonseca and shows how celebrities and world leaders have shuffled billions of dollars through banks and shell companies.
Zuma presented as owner
“The Panama Papers have provided the first clear indication that deals involving South Africans formed part of the US authorities’ probe into Och-Ziff’s suspected dodgy dealings,” amaBhungane revealed on BDLive on Monday.
“In 2010, Mr Zuma was presented as the owner of companies to which Democratic Republic of Congo President Joseph Kabila awarded oil rights,” the report says.
“The Panama Papers contain correspondence made in July and September last year, in which the British Virgin Island attorney-general ordered law firm Mossack Fonseca to produce all records in respect of Foxwhelp and Caprikat, the companies registered in the British Virgin Island that acquired the oil rights and are controlled by Mr Gertler. Under threat of a fine or imprisonment, Mossack Fonseca complied, the documents show.”
“The attorney-general’s correspondence indicated that the source of the request was the US probe of Och-Ziff.”
Khulubuse Zuma’s link to Caprikat
Earlier in April, News24 reported Khulubuse Zuma was linked to the Panama Papers leak due to Caprikat Limited, a company linked to him.
The company, established in the British Virgin Islands, scored a R100bn oil deal in the Democratic Republic of Congo.
A City Press investigation in 2010 discovered that President Zuma played a crucial role in the decision by DRC President Joseph Kabila to allocate two oilfields in the northeast of the country to his nephew.
Eight months before Kabila issued a decree for Khulubuse Zuma to bag two of the most prized oil licences in sub-Saharan Africa, Jacob Zuma met his DRC counterpart in Kinshasa, where they allegedly discussed the oilfields.
According to the report, Kabila appropriated the oilfields from Irish oil giant Tullow Oil and allocated them to Khulubuse Zuma months after the presidential summit.
Read more: Khulubuse Zuma's R100bn oil deal
In documents that News24 has perused, British Virgin Island tax authorities ordered the law firm to furnish further particulars, according to the documents, which about Zuma. A letter, sent to Mossack Fonseca by a Financial Investigation Agency official, gave the law firm seven days to hand over Zuma’s details. The ICIJ report listed Zuma as a "power player".
"Zuma was authorised to represent Caprikat Limited, one of two offshore companies that controversially acquired oil fields in the Democratic Republic of Congo. In late summer 2010, as published reports raised questions about the acquisition, British Virgin Islands authorities ordered Mossack Fonseca to provide background information on Zuma, which the law firm had not previously obtained."
Khulubuse Zuma responds
Khulubuse Zuma’s spokesperson, Vuyo Mkhize told News24 on 4 April that the report “seems to allege is that he has an association with a company, Caprikat, which is registered in the British Virgin Islands that he represented in concluding an oil deal which is a matter of record in this country”.
“He does not have any additional comment beyond this,” said Mkhize.
"His simple position is that he signed the agreement on behalf of Caprikat, but the question of his status within that company is something that he not at liberty to comment on.”
Khulubuse Zuma, a sports car collector and flashy socialite, was one of the men behind the collapse of Aurora's Pamodzi mines.
He and other directors were accused of siphoning off billions of rands which caused the mines to shut down, costing thousands of jobs.