Golden deals between the Belarusian elite and Mnangagwa

Pandora papers

IN MARCH 2018, the autocratic President of Belarus Alexander Lukashenko sent his right-hand man Viktor Sheiman to Zimbabwe to negotiate trade and business deals on behalf of the government.

Schiman has been one of Lukashenko’s closest allies since the 1994 election campaign that brought the strong man to power. During his tenure as Attorney General of Belarus in 2004, he was sanctioned by the EU for the disappearance of several prominent Lukashenko critics, followed two years later by the USA.

But it was not subject to such restrictions in Zimbabwe. After Sheiman’s return from Harare, the Belarusian state news agency said he had met with Zimbabwean officials to discuss “expanding economic cooperation” between the two countries and that he had provided an opportunity to “start a mining company.” .

Sheiman told Belarusian state television that the trip through a joint venture in mining resulted in agreements to explore minerals such as gold, platinum and rare earths.

The mining deal was presented as a collaboration between the two countries, and Sheiman said it aims to “make a profit for Belarus”. In fact, however, the new joint venture Zim Goldfields secretly belonged to Sheiman’s son Sergei, with no involvement for the Belarusian state.

Sergei Sheiman’s partner in the gold venture was the influential Belarusian businessman Alexander Zingman, who has been Zimbabwe’s honorary consul in Belarus since the beginning of 2019. Zingman was also detained for 12 days in the Democratic Republic of the Congo in March this year. A press release from its Dubai-based company Aftrade DMCC stated that the incident was caused by gun trafficking allegations, which Zingman flatly denied. He was released without charge.

Documents from the Pandora Papers – a massive leak of nearly 12 million documents from 14 offshore corporate service providers to the International Consortium of Investigative Journalists shared with media partners around the world – show how the two Belarusian letterbox companies in the Seychelles and the United States Kingdom used to disguise their involvement and the conflict of interest at the heart of the transaction.

Thirty percent of Zim Goldfields was owned by Zimbabwe’s state-owned mining company, Zimbabwe Mining Development Corporation (ZMDC), but the other 70 percent was controlled by a British shell company called Midlands Goldfields Limited.

His property was masked by a proxy – British records cite Robert Michael Friedberg as director of the company – but leaked documents from the Pandora Papers indicate Friedberg was acting on behalf of its owners as a candidate for a company in the Seychelles of a similar name: Midlands Goldfields- Foundation, endowment. And that unit belonged to Sergei Sheiman and Zingman, both of whom reportedly participated in the Harare mission in March 2018.

Both letterbox companies appear to have been set up specifically to take advantage of Viktor Sheiman’s official visit to Zimbabwe: Midlands Goldfields in both the Seychelles and the UK were set up just a few months before his trip, and Zim Goldfields was set up shortly afterwards.

Vytis Jurkonis, political scientist at Vilnius University and Belarus expert, cited the agreement as an example of “nepotism” and a “conflict of interest”.

“I think it shows all the signs of a really seedy structure with direct links to the presidential administration,” he told OCCRP.

Sergei Shiman and the Lukashenko government did not respond to questions from the OCCRP. Aftrade DMCC, Zingman’s Dubai-based company, denied that Zingman had any stake in the gold company, despite his name, contact details, passport number and signature appearing in Midlands Goldfields Limited’s corporate records.

Alpha Consulting, which founded Midlands Goldfields in the Seychelles, said it complies with all local and international regulations and does background checks on its clients and the source of their assets.

“Mr. Zingman has no affiliation with Zim Goldfields or Midland Goldfields Limited,” said Aftrade DMCC in a written response. “Mr. Zingman is also not involved in any business relationship or company with Mr. Sergei Sheiman,” added the company in a separate statement.

Viktor Sheiman, who left his position as head of the Belarusian President’s property management directorate in June 2021 with a personal thank you message from Lukashenko for “opening the window to Africa”, did not respond to requests for comments sent through his former office.

Flow of problems

Zim Goldfields has received gold prospecting permits on nearly 55,000 hectares at three locations, including a location along the Mutare River, a waterway in eastern Zimbabwe, whose name means “River of Metals”. In May 2018, the company received a five-year “special grant” for gold mining in a section of the river.

Within a few months, the company ran into trouble with the Zimbabwean authorities. A visit to the Zim Goldfields site in December 2018, led by the provincial leadership of the Mines Department in Manicaland, revealed that the company had violated several safety regulations, although it is unclear whether penalties were imposed.

The Ministry of Mines, ZMDC and Zim Goldfields did not respond to email questions from OCCRP.

A mining pit at the Mutare River site where Zim Goldfields held a gold mine permit.

In September 2020, the Zimbabwean government banned the dismantling of river beds for environmental reasons. Both the Seychelles and UK based incarnations of Midlands Goldfields closed within days.

Zim Goldfields did not appear to be updating its ownership records after the two Midlands Goldfields companies closed. Yauhen Zhouner, a director representing Midlands Goldfields in Zim Goldfields documents, appears in company filings after September 2020, suggesting the company may have remained under Belarusian control.

The joint venture agreement and articles of association gave the owners of Midlands Goldfields exceptional freedom to disguise their stake in Zim Goldfields. The documents allow Midlands Goldfields to transfer its shareholding to “any partnership or other corporation, whether incorporated or not” without the consent of its government partner ZMDC.

Zim Goldfields hired Belgeopoisk, a geological company formerly partially owned by the Belarusian state, to support its exploration activities. Belgeopoisk is now private and owned by Zhouner, the director of Zim Goldfields, who signed the statutes on behalf of Midlands Goldfields.

Belgeopoisk director Sergei Mamchik confirmed that Belgeopoisk works for Zim Goldfields but said he was unaware of the company’s final beneficiaries.

“I don’t know and I don’t want to know,” he said in a telephone interview.

Mamchik has refused to disclose the amounts of gold discovered while working for Zim Goldfields. “Why do you want to know? … It’s a trade secret,” he said.

While it’s not clear how much gold has been mined in the two years since the deal was signed, or whether the mining operation made a profit, a former Zim Goldfields employee and a local community organization both said gold was discovered and sold on the property .

A Belgeopoisk document detailing the company’s operations for Zim Goldfields between 2018 and 2020 appears to confirm this. The document states that 1,985 cubic meters of “gold-bearing sand” were excavated, of which 520 cubic meters were recovered.

Documents received by OCCRP also show that Zim Goldfields hired a Chinese company called Ming Chang Sino-Africa Mining to carry out ecological “rehabilitation” on its mining site. Two December 2020 letters from Zim Goldfields to Ming Chang complain that the Chinese company did not do the work properly.

A month earlier, Zim Goldfields was at the center of controversy after media and local civil society reported the deaths of two local miners on the company premises. Zimbabwe’s Secretary of State for Information, Public Information and Broadcasting tweeted that ten “illegal gold miners were feared to have been buried alive” – ​​which he attributed to the “Zimgoldfeld” – and that two bodies had been recovered.

In a press release from a local community organization, a Chinese company hired by “a Belarusian company” was blamed for the death, but the Chinese party was labeled “Zhondin Investments”.

Zim Goldfields and Sergei Sheiman did not respond to inquiries about the reports.

In response to questions from OCCRP, including asking for comment on the fatal accident, Aftrade denied Zingman’s involvement in Zim Goldfields and made no specific comment on the November incident.

It is not clear if Zim Goldfields continues to operate. The ZMDC did not respond to questions about the status of the company.

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