Back to Index
This article participates on the following special index pages:
Marange, Chiadzwa and other diamond fields and the Kimberley Process - Index of articles
Sharife, 100 Reporters
February 20, 2013
Once a month,
sometimes more, a VIP-configured Airbus jetted into Lanseria International
Airport, a small and privately-owned base facility near Johannesburg,
South Africa. The plane, an Airbus 319CJ, also stopped at Zimbabwe's
Harare airport. It carried important people and was widely believed
to ferry some precious-and illicit-cargo: Zimbabwe's
came from one of the largest diamond
troves in history: Marange. Spanning 173,000 acres and priced
at $800 billion in rough diamonds, Marange's concentration
of treasure is eight times higher than average, at more than 1,000
carats per hundred tons.
The plane, first identified
in report by the British nonprofit organization Global Witness,
has played an integral role in moving the diamonds out of Zimbabwe.
Money from their export has gone to cement the hold of President
Robert Mugabe, and arm Zimbabwe's notorious secret police-responsible
for killing, raping and maiming thousands of artisanal miners in
an operation to clear out Marange in 2008.
An examination of purchasing
documents, corporate records and interviews with relevant officials
by 100Reporters has, for the first time, parted the curtain on the
plane's ownership to reveal links between the mysterious jet,
Zimbabwe government officials, law firms and investors with holdings
across the globe, from the UK to China, Angola to Bermuda to Wall
Flight logs for the plane,
registered as VP-BEX, disclose frequent trips to Singapore, Hong
Kong, Tanzania and Angola, among others. The Airbus appears to enjoy
a remarkable lack of scrutiny, seemingly flying in a perpetual no-oversight
zone. In the South African airport that was the plane's home
base, unless cargo and goods were self-declared, the plane and its
passengers were not normally subject to inspection by customs, police
or civil aviation authorities.
Farai Maguwu, an award-winning
human rights activist and Zimbabwe's leading researcher of
the diamond trade, said, "We don't know where the plane
goes, what the routes are, or even who is involved. But we know
that VP-BEX A319 was identified as playing an important role in
facilitating this secretive system that is causing Zimbabweans to
lose diamond revenue."
Until 2006, De Beers,
one of the world's leading diamond producers, held the rights
to Marange. But common to diamond majors, De Beers appeared to lock
down the concession rather than exploit it, possibly as a means
of controlling supply. A British-registered company called African
Consolidated Resources had acquired concessions from De Beers.
When the De Beers'
concessions expired in 2006, Mugabe's ruling party, ZANU-PF,
swooped in. Zimbabwean government officials had tired of De Beers's
failure to exploit the mines, said one source, speaking on condition
of anonymity. Another source cited De Beers's failure to "marry"
the Zimbabwean government into the company's existing business
models, as it had in Botswana and Namibia. There, the government
formed public-private partnerships with the company. Meanwhile,
Supa Mandiwanzira, a representative of Zimbabwe's Diamond
Consortium, threatened that Zimbabwe had "the potential to
destroy the whole industry" by flooding the markets.
had acquired a smaller claim to mine diamonds in Marange. But its
shareholders included a rival within ZANU vying to oust Mugabe -
the now dead General Solomon Mujuru. "The company bet their
money on the wrong political horse," a high-level source told
100Reporters. General Mujuru died
under suspect conditions, and Africa Consolidated's rights
were quickly terminated by the regime. Before long, Africa Consolidated
found itself sidelined for ZANU-approved partners, primarily South
African and Chinese companies, such as New Reclamation and the China
International Fund (CIF).
"You Will Not Return"-opened the way for Mugabe's
exploitation of the mine with a small group of select and largely
secretive partners. One watchdog group, estimating that $2 billion
in undeclared precious stones have left Zimbabwe, has called the
takeover "perhaps the biggest single plunder of diamonds since
new standards for brutality in forcing out thousands of itinerant
miners who had flocked to Marange. When the BBC's Panorama
interviewed paramilitary forces and police involved in the assault
three years later, soldiers were apparently wracked with guilt.
They reported that people were killed, "like flies."
"There was no way
out," said one soldier. Panorama's interviews with soldiers
revealed that the military laid a string on mines, stationed armored
vehicles, mounted soldiers "and an infantry battalion in a
circular pattern around the 2.5 kilometer area."
The government justified
Hakudzokwi as a necessary move to ensure the country's minerals
are used for national purposes. But according to Zimbabwean Finance
Minister Tendai Biti, millions of dollars in diamond revenues that
should have been deposited in Zimbabwe's national treasury
are being secreted elsewhere.
Flying Hotel Room"
The most frequent
passenger on the Airbus, identified by its tail code VP-BEX, has
been Xu Jinghua, a Chinese businessman also known as Sam Pa, who
visited Zimbabwe once a month and was believed to carry out diamonds,
according to watchdog groups. Pa has been accused of providing arms
and a fleet of Nissan pickup trucks to Zimbabwe's feared secret
police, according to Global
Witness and other nonprofit organizations that monitor extractive
The Airbus, a corporate
ultra-long jetliner, is smaller and lighter than its commercial
counterpart. The private version of the 319CJ hosts an average of
18 or more seats, with luxury compartments. Writing on an aviation
forum, one enthusiast who claimed to have entered a Planair 319CJ
described the interior as "a flying hotel room." The
plane has all the perks of a commercial jet in terms of speed, range,
and reliability. The corporate version, hosting a small passenger
base, is capable of flying 6,000 nautical miles non-stop.
But the plane has one
added perk: while the VP-BEX - a VIP-configured jet -
can carry cargo, there are no real systemic checks on the material
it may be transporting through South Africa, as the plane did not
generally declare any cargo and diamonds are small enough to escape
One pilot formerly operating
from Lanseria alleged that security was often "slack"
at the airport. "Passengers don't need to carry their
illicit goods with them," he told 100Reporters. "If
a company has, for example, leased a hangar, the plane can taxi
down to the hangar, and the goods are left inside. An hour or two
later, the goods can be picked up." While customs officials
randomly check the bags of international passengers arriving on
commercial airliners, those flying in on private jets are seldom
checked, the pilot said. "One plane in 30, and 99 percent
of the time, it would be due to a tip-off," said the pilot.
Gavin Sayce, Lanseria's
airport manager, did not respond to interview requests.
Until September 2012,
the plane was registered in Bermuda to Planair, a company identified
as one aviation arm of the China International Fund, a Hong Kong-based
private company. In September, Planair re-registered the plane under
a different corporate subsidiary: Hong Kong Jet (Bermuda), belonging
to a Chinese Fortune 500 company, the HNA Group.
China International is
often described as Zimbabwe's largest investor at US$8 billion—though
there is little evidence that the company has yet made good on its
pledges of vast infrastructure development.
chairman of Zimbabwe's Mining Development Corporation, has
maintained that the army had every right to mine diamonds. "There
should not be boundaries. If the army uses its stake to finance
its activities, then that's good and we will remain with the
peace that we are enjoying in this country," he said during
a meeting at the Mutare Press Club this month.
Masimirembwa denied misuse
of funds from looted diamonds or diamond revenue, and cited U.S.
Army involvement in "economic and industrial activities"
as best practice. He challenged Biti to prove that diamond companies
were not remitting revenue to the government.
Blood Diamond Jet
The plane was purchased
new in mid-June 2006 by Angola's Sonangol State Corporation,
a secretive entity with a long history of off-books sales of petroleum,
according to the International Monetary Fund and other sources.
A December 2011 IMF report, for example, cited $32 billion discrepancy
in revenue from Angola's public accounts between 2007 and
2010, largely connected to the quasi-fiscal activities of Sonangol.
IMF Report on Angola (p. 10)
IMF report showing $32 billion in unexplained transfers to overseas
escrow accounts, tied to "quasi-fiscal" activities of
interlocked with the China International Fund through multiple known
and unknown subsidiaries. In Zimbabwe, China International's
diamond-related legal forms include the Hong Kong-incorporated Sino-Zim
Diamonds Ltd., headed by nominee lawyer Jimmy Zerenie and Eliezer
Nefussy, reportedly the longtime right-hand man to diamond magnate
Lev Leviev in Namibia. Leviev significantly broke the global De
Beers stronghold, beginning with Russia, before entering Angola's
ties to Dos Santos (p. 33)
Leviev's brother, Moshe, was named by Global Witness as a
director of LLD Asia, a tentacle of Sino-Zim's complex multi-corporate
structure, primarily registered in the British Virgin Islands (BVI).
LLD Asia, advertises itself as one of the largest dealers of Angolan,
Namibian, Russian and other diamonds, selling to buyers in the United
States, Italy, Belgium and Hong Kong. Masimba Kamba, an individual
connected to Zimbabwe's Central Intelligence Organization,
the secret police, is also connected to Sino-Zim, as a director,
and to a related company in the British Virgin Islands (Strong Achieve
Also involved in China
International Fund are Lo Fung Hung, Sam Pa and Alain Fanaie, who
doubles as the Chief Executive Officer of China Sonangol. Following
a U.S.-China Economic & Security Review Commission (USCC) report,
the Hong Kong-based China International Fund, based at 27/F Two
Pacific Place, 88 Queensway, Hong Kong, would become known as the
88 Queensway Group, due to its physical address.
The USCC report identified
Leviev, a real estate billionaire and major diamond supplier in
New York, Dubai, London, Singapore and Cannes, as a key figure in
China International Fund.
Much like Hong Kong,
Singapore and the British Virgin Islands are also secrecy jurisdictions,
peddling sovereign-protected spaces of legal and financial opacity
to international companies seeking to hide assets or conceal the
identities of their beneficial owners.
"It all sounds
depressingly familiar," said Ronen Palan, a professor at the
University of Birmingham and author of Tax Havens: How Globalization
Really Works. "Why are complex overlapping corporate structures
used? I cannot see any reasons for such complexity besides concealing
financial activities, lowering taxation, and creating distance from
ownership in case the airplane is used for illegal business. There
are clearly no societal advantages to such structures," he
face of the 88 Queensway empire is Lo Fung, while Pa has been identified
as more of a behind-the-scenes operator.
of 88 Queensway (p. 55)
in 88 Queensway, China International Fund and related holdings.
In 2007, Pa,
formerly a military comrade of Angola's lifetime dictator,
José Eduardo dos Santos, valued his Angolan business deals
at $30 billion. In Zimbabwe and elsewhere, Pa is believed to be
ZANU's private arms dealer. Global Witness has described him
as a monthly visitor on board VP-BEX to Harare. According to a Zimbabwean
source, who spoke on condition of anonymity, Pa is perceived as
one the Central Intelligence Organization's most important
The 88 Queensway
group has used some of its wealth to make its mark in New York real
estate. It bought the JP Morgan Chase building at 23 Wall Street
for $150 million, paid $150 million for a 49.9 percent stake in
the Madison Avenue Clock Tower, and another $50 million (along with
the assumption of half the building's $720 million in debt)
for a 49 percent stake in the former New York Times building at
229 West 43rd Street, according to the USCC report.
Sonangol (p. 35)
Sonangol purchases of New York real estate.
Neither the China International
Fund nor China Sonangol responded to repeated requests for comment.
LLD Asia could not be reached for comment.
a Bird, It's a Plane, It's Planair
In 2007, a year after
mining started at Marange, the plane was allegedly delivered to
another Bermuda-registered company: Planair Enterprises, a shell
company incorporated on 17 July 2001.
has discovered, is the Lanseria-based commercial arm of China Sonangol,
while another China Sonagol entity, Aero Management Services (AMS),
handled the plane's maintenance at Lanseria. According to
a high level corporate source at the airport, little was known about
Planair, save that it had a fleet of planes that was not South African-owned
- abnormal for Lanseria-based owners and operators. The plane's
pilot is a celebrated former South African Airways (SAA) pilot,
Flippie Vermeulen, from Springbok Safari. Vermeulen did not respond
to interview requests.
Pilots, speaking candidly
on aviation forums, call Planair "the ghost company."
Though Planair has ostensibly operated at Lanseria since 2006, the
airport's security division's register did not identify
Planair as an operating company on its register. It did acknowledged
that Aero Management Services (AMS) was registered and active at
the airport, and provided a contact number.
said that Planair and Aero Management indeed functioned as a single
company. An official at the company's technical department
told 100Reporters that AMS operated more than one Airbus aircraft,
and that VP-BEX was operated on behalf of a big Chinese company.
He stated that only VIPs traveled aboard, and to his knowledge,
there was no cargo. One security official at Lanseria, who spoke
on condition of anonymity, told 100Reporters that such planes are
rarely checked, unless there are specific alleged security concerns
related to criminal activity.
Despite the jet's
suspected role in moving vast quantities of undocumented diamonds
from Zimbabwe, Lanseria airport security were officially not aware
that the plane identified by Global Witness was headquartered, or
even using, the airport. 100Reporters was informed that aside from
the usual inspections of airport security and non-cargo VIP-configured
jets, there would have been no specific oversight throughout the
duration of Planair's, or the VP-Bex's, use of the AMS-leased
A senior security official
referred 100Reporters to the South African Revenue Services, ordinarily
responsible for collecting customs duties. Adrian Lackay, spokesman
for the Revenue Services, did not disclose whether or not the company
and plane were known to the Revenue Services. He said the agency
had no role in monitoring planes, and wrote in an email that "the
Civil Aviation Authority (CAA) is responsible for registering aircraft
and monitoring flights into and from this country," as is
the South African Police Service.
A spokeswoman at the
Civil Aviation Authority, however, said monitoring the plane was
not her agency's role. "Our mandate relates to aviation
safety and security only, and for this reason we cannot comment
on alleged criminal activity at airports," said Marie Bray,
the spokeswoman. "The CAA's mandate on aviation security
is limited to certain functions and powers." She referred
100Reporters to the South African Police and back to the customs
service. Bray would not say whether or not the Civil Aviation Authority
had knowledge of the plane or the company.
Gown, Bermuda Veil
Much like British Virgin
Islands, Cayman Islands and others, Bermuda is a secrecy jurisdiction
connected to the UK's City of London, a leading tax haven,
via its status as dependencies. These UK territories have been described
by the UK-based Tax Justice Network as "satellite" havens
that form part of the City of London's business model, "giving
it unrivalled market power in the field of financial services"
for companies, specifically those seeking secrecy. (Full disclosure:
This reporter has authored a report for the Tax Justice Network,
Tax Us if You Can: Africa.)
The use of a jurisdiction
like Bermuda, which specializes in aviation services, to register
the company and the plane prevents home and host countries from
penetrating beneficial directors and shareholders. This renders
law enforcement investigations almost impossible, unless insiders
bring forward specific evidence.
In Bermuda, Planair was
served by Apex Law Group, a Bermuda-based law firm with expertise
in "international business," according to its website.
The firm's head is Lynda Milligan-Whyte, a former senator
of Bermuda. Milligan-Whyte also serves as director of the Bermuda
Monetary Authority, regulating financial services in Bermuda. Her
private firm notes that aviation services, provided by the Bermuda
Department of Civil Aviation, "is considered to be a business
sensitive regulatory body that is prepared to be responsive to customers
and flexible in its approach."
Law firms that
serve as nominee directors have little interest, and often, little
active role, in the companies they front.Their specific purpose
is to provide the illusion of a corporation with genuine economic
activity in a jurisdiction.
Milligan-Whyte did not
respond to repeated interview requests from 100 Reporters.
not only supply clients with sovereign-backed financial and legal
secrecy, it also provides a tax-free environment to finance and
manage corporate aircraft. Just under half of all Bermudan-registered
planes are corporate and private jets.
the law firm Conyers, Dill and Pearman, which specializes in multi-jurisdictional
legal services, financial perks of Bermudan companies includes an
absence of taxes on capital transfers, income and profits.
holiday extends to "a government guarantee available in relation
to the tax regime" applicable to companies via the Minister
of Finance of Bermuda under the Exempted Undertakings Tax Protection
Act 1966. Put simply, no exempted company can be taxed even in the
event of changes to the tax regime by the Bermudan government.
countries, Bermuda does not require that aircraft registered in
the Bermuda be based in, or operate from, there.
Yet this global
reach, armed with secrecy, effectively prevents other authorities
from having access to the nature, financial activities, and even
beneficial owners of planes operating in their own jurisdictions.
Dictators, Ivory Banksters
founder of the Tax Justice Network and a former senior advisor to
Jersey, a British tax haven, said the details on the mysterious
plane's ownership make for "depressing reading."
again we find an offshore company registered in the British secrecy
jurisdiction of Bermuda being used to disguise the identity of the
people behind the crimes," Christensen said. "Presumably
the offshore nominee directors involved in this racket will deny
knowledge of any illicit activities," he told 100Reporters.
nominee director, Milligan-Whyte, is also a SonAir nominee director.
SonAir, a subsidiary of China Sonangol, includes directors such
as Manuel Vicente, President Dos Santos's right hand man in
Angola, and a crucial part of the China Sonangol system. The company
Flight Pro Consulting identifies both Planair and Sonair as the
same company in its list of clients.
a Netherlands-based company, also holds several spots on Planair's
board of directors (including Andre Wilwert and Eric Mangrini).
According to a Global Witness report, the company acted as financier
for one of Africa's most notorious scandals, known as Angolagate,
an oil-for-arms deal facilitated by dos Santos and Pierre Falcone,
an alleged arms dealer and head of Pierson Capital, a firm specializing
in commodity-backed loans, among other areas.
Falcone is a key figure in the 88 Queensway Group that hosts China
Sonangol, and has strong ties to the Dos Santos regime.
services, such as nominee directors and other methods of creating
anonymous companies, are one of the ways in which countries who
permit their use facilitate criminal activity around the world,"
said Heather Lowe, Legal Counsel
for the Washington-based Global Financial Integrity.
impact is greater when the 'world powers' offer these
secrecy services, because the average person would never think that
a U.S., Canadian, or French company, for example, would be anonymous
and therefore difficult to hold accountable for their actions or
use. Companies created in OECD-type countries enjoy a patina of
that they do not necessarily deserve," she stated.
In fact, the
non-profit Tax Justice Networks rankings of top secrecy jurisdictions
around the world includes Switzerland, the United States, the United
Kingdom and a raft of British-administered havens from Jersey to
the Cayman Islands. Secret Central Intelligence Organization documents
obtained by Global Witness suggest that VP-BEX's role is to
jet diamonds from one base to the next, often failing to record
its complete itinerary.
from another company, formerly operating from Lanseria, who spoke
on condition of anonymity, told 100Reporters that by underestimating
a plane's cruising speed, scheduled flight plans can be maintained.
The most frequent stops declared for the VP-BEX include Angola,
Singapore, South Africa, Zimbabwe, China, Russia and Tanzania. On
Oct. 10, 2012, for instance, VP-BEX filed a flight plan scheduling
the plane to depart from Harare International Airport(FVHA/HRE)
at 10 am Central Africa Time, heading for Singapore Changi (WSSS/SIN),
with an estimated arrival 18.5 hours later, at 10.24 AM local time.
But on the same day, according to a South African private security
specialist, the plane made a stop in Luanda, Angola, though no mention
of such was detailed in the flight logs.
way to crack down on blood diamond trafficking from Zimbabwe may
well be to tackle the offshore secrecy behind which the traffickers
can hide with relative impunity," said Christensen.
The view from
the balcony of Lanseria's Wiesenhof restaurant looks straight
out onto the AMS hangar. Like Zimbabwe's diamonds, the evidence
of illicit looting is alluvial, on the surface, waiting to be picked
up. But wait too long and exposed parties regroup, slipping back
into the shadows of complex corporate webs and secrecy jurisdictions.
occurred as 100 Reporters began its investigation into VP-BEX. During
the last months of 2012,VP-BEX's registration was transferred
to Hong Kong Jet (HKJ) - an airline management company specializing
in private jets. On November 13, a company press release announced
the acquisition of a 4th luxury Airbus, without providing any identifying
details, such as the plane's registration number. The plane
was documented as scheduled for delivery to HKJ in December 2012.
of Aircraft Registration' names HKJ's Bermuda subsidiary
as the registered charter carrier of VP-BEX. HKJ's
registered Bermuda address is a nominee law firm called Appleby.
The same company acquired another key VIP plane from China International
Fund - VP-BED, owned by China Sonangol but operated by Planair.
Both China Sonangol
and HKJ (a subsidiary of the vast Chinese airline and property corporation,
HNA) are major clients of Airbus private jets, according to a press
release from Airbus's parent company, the European Aeronautic
Defense and Space Co. in Toulouse, France. According to the Financial
Times, "despite HNA's increasingly high profile, the
company remains something of a mystery, with a convoluted corporate
The HNA Group,
a Fortune 500 company, is valued at $13 billion.
or other financing instruments, or outstanding charges surfaced
in public records associated with the transfer. A high-level source
in the Bermudan government Aviation Department said that the planes
were merely re registered to HKJ Bermuda.
Amy Wang, a
spokeswoman for HKJ, declined to answer questions, saying only that
HKJ would protect the privacy of its clients.
In the last
year, China Sonangol is alleged to have purchased two Airbus A319s
directly from the manufacturer on behalf of Air Zimbabwe, delivering
the planes to hangars in Harare airport - where they remain
relatively unused. As with many other China International Fund-related
planes, such aircraft are either sold, relatively dormant, or leased
China International Fund
is estimated to have invested between $500 million to $1 billion
in a variety of customized luxury planes, according to sources in
the aviation industry and price lists from plane manufacturers such
the interest in luxury aircraft?
Elsewhere, aircraft purchases
have been used to turn billions of dollars in illicit money into
licit assets - a simple case of laundering profits. Mexican
drug cartels, for example, have effectively transferred over $420
billion in drug proceeds through banks like Wachovia, via shell
companies based in secrecy jurisdictions such as Luxembourg and
the Seychelles. Along the way, they purchased planes too.
The use of countries
like Bermuda can not only conceal such deals, but also eliminate
the former history and purpose of these companies. Bermuda's
no-tax location ensures that the planes will generate maximum profit,
could be the sound of how justice dies," said Maguwu to 100
Reporters. "No whimper, no bang. Just the sound of a business
filing cabinet being closed."
Sharife is a member of 100Reporters, based in South Africa.
Please credit www.kubatana.net if you make use of material from this website.
This work is licensed under a Creative Commons License unless stated otherwise.