In its new report Och-Ziff, Mugabe’s “Bagmen” and the underpricing of African assets, RAID (Rights and Accountability in Development) calls on the US authorities to investigate a number of questionable transactions in Africa by Och-Ziff Capital Management Group LLC (‘Och-Ziff’), a $41 billion US hedge fund listed on the New York Stock Exchange.
The starting point of RAID’s new report is an examination of responses that Och-Ziff has given about its investment in the Central African Mining and Exploration Company (“CAMEC”) a UK mining company recently described as a front for the Mugabe regime. It updates RAID’s July 2013 report, Sanctions, violence, pensions and Zimbabwe.
In 2011, RAID raised concerns with the UK Treasury’s Asset Freezing Unit – responsible for implementing aspects of the UK’s sanctions regime – over both CAMEC’s dealings with the Zimbabwean regime and the subsequent acquisition of CAMEC by Eurasian Natural Resources Corporation plc (ENRC). In March 2014 RAID made a complaint to the Information Commissioner about the Treasury’s refusal to release any information despite repeated requests.
The report also analyses other transactions in the Democratic Republic of the Congo (DRC) and Guinea involving the investment vehicle Africa Management Limited (AML) – jointly set up by Och-Ziff in 2008 – or Och-Ziff’s partners in AML, South-Africa registered Mvelaphanda Holdings (Proprietary) Limited and UK-registered Palladino Holdings Limited.
In 2008, Camrose Resources Limited bought mining assets in DRC and amended its company records to accommodate both AML and its Vipar Investments affiliate, which had loaned Camrose money to make the acquisition. Camrose is part of the group of companies controlled by the controversial businessman Dan Gertler, who has acquired mining concessions from the DRC government to sell them on at vast profit, although he denies that assets were obtained at ‘knock-down values’.
Camrose was itself later acquired by Eurasian Natural Resources Corporation (ENRC) plc, formerly one of the top 100 companies on the London stock market, which is now subject to a criminal investigation by the UK’s Serious Fraud Office (SFO). ENRC’s Camrose transaction and CAMEC acquisition have been identified, respectively, in relation to ‘allegations of fraud, bribery and corruption’ and ‘possible breaches of financial sanctions’
‘The US authorities – the Security Exchange Commission, the Department of Justice and the Treasury – should assess whether Och-Ziff’s conduct is in accordance with market rules and the maintenance of market integrity, whether its activities engaged the FPCA and fell under US sanctions’, said Tricia Feeney, Executive Director of RAID, adding: ‘RAID is also calling on the UK’s SFO to determine whether there are grounds for an investigation into any UK registered entities identified in RAID’s new report.’
As Kofi Annan remarked, ‘When foreign investors make extensive use of offshore companies, shell companies and tax havens, they… undermine the efforts of reformers in Africa to promote transparency. Such practices also facilitate tax evasion and, in some countries, orruption, draining Africa of revenues that should be deployed against poverty and vulnerability.’
The report is available at: http://raid-uk.org/docs/Och-Ziff/och-ziff-review.pdf
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