Harare – Zimbabwe’s central bank governor has hinted that businessmen and executives named for having offshore companies and accounts could escape legal consequences, highlighting that the issue was more about immorality than illegality.
On Tuesday, the International Consortium of Investigative Journalists (ICIJ) released names of about 280 Zimbabwean businessmen and executives involved in the setting up of offshore accounts gleaned from the leaked documents of a Panama law firm, Mossack Fonseca.
Government officials had said they were investigating those named in the Panama Papers for potential illegal dealings and illicit financial flows.
Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has now said that some executives gathered for a breakfast meeting in Harare on Wednesday had been named in the Panama Papers leaks. He said it may not be illegal to set up offshore companies and accounts but emphasised that it was bad from a moral perspective.
“If it’s not illegal, it’s the moral principles and it’s immoral. The problem (Zimbabwe was facing with cash shortages) is externalisation of cash. Some of you have been named in the Panama Papers,” Mangudya said.
Prominent names from the latest comprehensive list released on Tuesday include Zimplats chief executive officer Alex Mhembere, Zimbabwean businessman and property magnate Ken Sharpe and Happymore Mapara, a businessman who has served on various boards and executive positions of ZSE-listed companies such as Radar Holdings and AICO.
Fin24 has reported comprehensively on Zimbabwean companies such as Impala Platinum's [JSE:IMP] Zimbabwean unit Zimplats and Innscor Africa Limited - which runs Nando’s, Chicken Inn and Steers outlets in the country - that have been named in the Panama Papers for paying executives through offshore companies and accounts.
Innscor said it had not violated any regulations, while Impala Platinum said its unit had not engaged offshore companies for payment of its executives. Billy Rautenbach and John Bredenkamp, other businessmen mentioned, have not said anything after their names were mentioned in the leaked documents last month.
Zimbabwe is battling cash shortages that have forced the government to impose cash withdrawal limits from banks. Economists say this is emanating from the non-productive nature of the economy as it has become a mass importer of finished products, most of these from South Africa, which has become the country’s biggest trade partner.
“People bring goods from SA in rands and they sell in US dollars. Let’s now diversify, use rands, euros and USD,” Mangudya added.
Zimbabwe has previously accused Pick n Pay [JSE:PIK] – which has a partnership in the country’s TM Supermarkets – for procuring most of its stock from South Africa. Pressure groups are lobbying for the imposition of a 50% local procurement policy for retail companies in Zimbabwe that also include Choppies, Spar and OK Zimbabwe.