Update following Financing a Parallel Government report
Since publishing the report Financing a Parallel Government in June 2012, we have received the following further information below from representatives of China International Fund (“CIF”) about the activities of Sino Zimbabwe Development (Pte) Ltd, Sino Zimbabwe Development (Pvt) Ltd and Strong Achieve Holdings and related individuals. CIF is related to or associated with these entities.
Excerpts from letter from representatives of CIF:
- Sino Zimbabwe Development (Pte) Ltd has been dormant since its inception. Accordingly, it has not been a party to any of the acts alleged in your report to have occurred (to the extent such acts have occurred which, in many cases, is disputed).
- Mr. Sam Pa does not hold any position or own any shares in China International Fund or its related companies. However, he does carry out work as an adviser for China International Fund and related companies.
- The Report claims that Sino Zimbabwe Development (Pvt) Ltd ("SZD") was 'set up to provide off-budget financing for Zimbabwe's secret police, the Central Intelligence Organisation’. This claim is incorrect and is not substantiated by the 'evidence' at Section 2 of the Report, much of which is incorrect as detailed further below.
- The Report further claims that SZD is believed by Global Witness to be 'a joint venture between the CIO and Sam Pa'. This is incorrect. SZD is a commercial organisation that has Zimbabwean participation, and is carrying out legitimate business activities in Zimbabwe.
- We note your claim that Mr Sam Pa provided '$100 million to the secret police.' China International Fund has not been involved in sending money to the secret police. While China International Fund has provided money to the government of Zimbabwe it has done so for legitimate business reasons such as the payment of taxes, license fees etc. It is a commercial enterprise and governments are free to deploy monies they receive as they deem appropriate. We request that you provide us with a copy of the 'leaked CIO document' upon which Global Witness relies in relation to this claim.
It is true that 200 Nissan trucks were imported on behalf of China International Fund into Zimbabwe. 100 of those trucks were used for company purposes and 100 were provided to the Government of Zimbabwe without specifying the vehicles usage. The Report seeks to create the impression (at page 11) that China International Fund or Mr Pa were, by virtue of the provision of the trucks in question, in some way contributing to the 'alleged human rights violations' allegedly carried out by agents using these vehicles. These insinuations are damaging and untrue. It is not correct to say that Sino Zimbabwe Development (Pvt) Ltd was 'granted opportunities in the diamond, cotton and property sectors' 'in return for' the provision of vehicles to the Zimbabwe Government. This claim creates the impression that our clients have been given undue commercial advantages in their business activities in these sectors in Zimbabwe in exchange for these vehicles. This is not true. In particular:
- Neither China International Fund nor Sino Zimbabwe Development (Pvt) Ltd has ever been involved in property development in Zimbabwe.
- The activities of Sino Zimbabwe Development (Pvt) Ltd in the diamond sector in Zimbabwe have not resulted in the removal of any diamonds from Zimbabwe. In fact, not a single carat was ever exported by Sino Zimbabwe Development (Pvt) Ltd. The mines with which that company was involved proved to be commercially unviable and hence were never active. A cutting factory designed to retain profits in Zimbabwe was also never operational.
- While Sino Zimbabwe Development (Pvt) Ltd is active in the cotton sector in Zimbabwe; it has not acted in an unfair manner. It has increased market prices to farmers, including overcoming a legal challenge against the payment of such increased prices.
- The Report makes a number of claims based on the "court documents" in the 'application to the CMTC in the matter between Cotton Ginners Association and Sino Zimbabwe Cotton Holdings (Private Limited)'. The Report relies on those documents and interviews with some of the parties to it to make certain allegations about our client, without (i) including the full details in relation to the outcome of this claim that are instead presented as part of Annex 1; or (ii) mentioning the fact that the case was found, by subsequent reference of Sino Zimbabwe to the Cotton Marketing Technical Committee, to be without merit. The presentation of these facts appears to be deliberate and results in a misleading impression being given to readers of the Report.
- The Report makes a number of claims about the activities of ''Operation Spiderweb". However, it does not provide any evidence that Mr Sam Pa has made any donation to that operation and acknowledges that there is no evidence that he was aware of how any donation (if a donation were in fact made) was spent. Notwithstanding this acknowledgment, the Report clearly leaves the reader with the impression that Mr Sam Pa (and our client) have been involved in the covert actions of the Central Intelligence Office. That is unfounded and untrue.
UPDATE: Sam Pa and Sino Zimbabwe Development sanctioned by U.S.
Sam Pa and Sino Zimbabwe Development (Pvt) Ltd, amongst others, were sanctioned by the U.S. Department of the Treasury’s Officer of Foreign Assets Control (OFAC) on 14 April 2014. This is in connection to their role in undermining democracy and facilitating corruption in Zimbabwe.
The targeted sanctions prohibit all transactions between the U.S. or U.S. persons and Sam Pa or Sino Zimbabwe Development (Pvt) Ltd. All of their assets held within the U.S. jurisdiction will be frozen.
Under Secretary for Terrorism and Financial Intelligence David S. Cohen said the decision, “targets those who are disrupting Zimbabwe’s democratic and economic progress.”
Sam Pa and Sino Zimbabwe Development were named in Global Witness’ 2012 report, Financing a Parallel Government—The involvement of the secret police and military in Zimbabwe’s diamond, cotton and property sectors. The report exposed apparent off-budget financing from Sam Pa to Zimbabwe’s secret police, the Central Intelligence Organisation (CIO). It also revealed the involvement of members of the CIO, widely implicated in widespread human rights abuses in Zimbabwe, in the group of companies known as Sino Zimbabwe Development (Pvt) Ltd.
In their statement, OFAC outlined Sam Pa’s role in “undermining democratic processes and institutions in Zimbabwe, facilitating public corruption by Zimbabwean senior officials through illicit diamond deals, and providing financial and logistical support to the Government of Zimbabwe and SDNs [Specially designated nationals].” SDNs are defined by OFAC as “individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries.”
Global Witness welcomes the development.
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