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SHARE SWAP EXPOSES TAGWIREI’S vast web A transaction in which the National Social Security Authority (NSSA) disposed of its 37,79% ZB Financial Holdings (ZBFH) shareholding was a swap deal that saw the authority clinching CBZ shares worth ZW$640 million (Us$7,8 million), it has emerged.Information exclusively obtained by the Zimbabwe Independent shows that the deal was concluded by Exodus Makumbe’s Platinum investment Managers and the shares are now being held by Datvest nominees (Pvt) Limited.The Independent first broke the story of the negotiations in July this year.There has been widespread speculation that this transaction is linked to business tycoon Kuda Tagwirei.For the 50% consideration, nssa received 14,341 million new shares, valued at ZW$640,041,800 in cBZ representing 2,15% stake, while for the 50% cash transaction, NSSA received Us$11,646,889 after factoring transaction costs.Datvest, which now holds 34% of the total ZBFH shareholding, is the asset management division of cBZ Holdings, in which Tagwirei is reportedly a major shareholder.The deal saw NSSA, which also has investments in FBC (35%) and nBs 100%, increasing its shareholding by 2,15% in CBZ where it already has 16% shareholding.Details of the agreement show that the parties agreed to calculate the swap ratio on the basis of 30-trading day volume weighted price to September 30 2020.Based on this formula, the Volume Weighted Average Prices (VWAP) for both were ZB (ZW$11,3183) and cBZ (ZW$43,2858) using 30-trading day information from August 20, with a swap ratio of 2,25 ZB shares for one cBZ share after including the 70% premium.NSSA communications manager Tendai Mutseyekwa told the Independent that of the bids that were submitted, this was the best.”We even went to the extent of engaging a third party, a financial advisor, to look into the transaction and advise NSSA whether we were obtaining value for the investment.”Essentially we negotiated for a 70% premium to the prevailing share price. so over and above the selling price we got almost double the consideration which is 70%. so how then it was structured was to say as NSSA we do not want to receive RTGS in exchange for a real asset. We are an investment company and would want to preserve value for pensioners. We believe cBZ is a better value stock,” he said.Why ZB?Mutseyekwa says the decision to dispose ZB shareholding was reached based on various considerations, including inconsistent dividends and an unattractive share price, with ZB shares currently trading at ZW$23,9179.At that time NSSA was invested in five banks, including First capital bank in which it disposed its stake (less than 1%) in June this year.Nssa noted that the banks it has shareholding in needed US$70 million to fulfil capitalisation requirements.”All these banking institutions require capital. So at the time we did our initial analysis, they required capital of about US$30 million each, NbS US$20 million, Barclays another US$30 million for compliance purposes. Nssa’s share of that capitalisation was supposed to be US$$70 million of the banks combined. So it was efficient on the part of Nssa to be invested in all those banks. of these banks, we had to keep those that were performing well. So we said let’s exit Zb completely because the dividends were not consistent and also the share price was not favourable to Nssa,” he said.Unravelling Tagwirei’s linksThe complex nature of the structure, multiple vehicles, and offshore companies used by Tagwirei linked companies to buy shares was uncovered following an investigation by the Independent in collaboration with the organised crime and corruption reporting Project (OCCRP).Investigative reporters from the two organisations worked for months across regional and international borders to follow the paper trail, uncovering the web of Tagwirei’s business networks used to acquire multiple stakes in various entities.OCCRP is an international investigative reporting platform comprising a worldwide network of independent media centres and journalists which undertakes investigative journalism.As part of the investigation, information was obtained using official sources, which included company registrars, and paid third-party services abroad. The investigations also reveal the existence of a South African registered company, Takutata (Pvt) Limited.The following are listed as directors in Takutata: Tagwirei, his wife Sandra Mpunga, Jozef Clifford Behr and Christopher Fourie. Three of the directors in Takutata, Brown, Behr and Fourie, are also directors in Sotic International, which owns Landela mining Venture Limited and Landela Investments.Our investigations show that there are threeSotic companies, one is registered in Mauritius, others in Singapore and South Africa.Landela mining Venture is part of a large multinational commodity trading group, Sotic International Ltd, and has business interests in minerals and the oil trade across the Southern African Development community region, including Zimbabwe.Tagwirei also holds shares in Zimbabwe’s largest chrome miner, African chrome Fields.Brown is the CE of Sotic International, a company registered in Mauritius. He is also the CE of Landela mining Venture Limited, which has been on a spree buying of local mining assets since 2019. These include Freda Rebecca, Jena, Shamva and Elvington gold mines, Mbungu coal bed methane concession, Lupane Gas and Bindura Nickel corporation (BNC).Fourie is a director at Sotic International and Sotic Pte, registered in Singapore. He is also a board member at bNc. He worked as head of mergers and acquisitions at Puma energy, which was owned by Tagwirei and Trafigura. Behr is a non-executive director and a board member at bNc. He is also a director at Sotic South Africa and Sotic International.Bobat is a director at African chrome Fields Pte (Singapore) and African resource chrome Fields (Zimbabwe).Mpunga is a director at Sakunda, Liberty Lane trading and Fert-map.Through Landela mining Venture, Tagwirei last year reportedly acquired a 50% stake in the US$4 billion Great Dyke Investments (GDI) platinum project following the departure of the Zimbabwe National Army from the company.Tagwirei also reportedly bought a major stake in bNc after the departure of ASA through the Mauritius-based Sotic International Ltd, which owns Zimbabwe’s Landela mining Venture Limited. He is also a board member at BNC.In 2019, Tagwirei emerged as the largest shareholder in CBZ after he acquired a 30% stake. In the CBZ transaction, he snapped up majority shareholding using Akribos capital Inc, indicating a common thread with the way Zb stake was acquired.A local stock broker, who asked not to be named, said: “When an investor doesn’t want his name to be known, he has the option of using nominee accounts. A nominee account is more of a secret account which does not bring out the name of the owner and it is housed within that nominee. “The Independent also understands that ZW$100 million (US$1,2 million) worth of shares exchanged hands for 2,38% shares of LHG malta Holdings shares in ZbFH. Indications are that it might have been Datvest that snapped up those shares using their nominee accounts. – newsday