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'Bribery in Its Purest Form': Och-Ziff, Asset Laundering And

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'Bribery in Its Purest Form': Och-Ziff, Asset Laundering And ‘Bribery in its purest form’: Och-Ziff, asset laundering and the London connection January 2017 Rights & Accountability in Development Limited (RAID) | UK Charity No. 1150846 | UK Company No. 04895859 Registered office: 1 Bladon Close, Oxford, OX2 8AD, UK | T: +44-(0)1865 436245 | E: [email protected] | www.raid-uk.org ‘Bribery in its purest form’: Och-Ziff, asset laundering and the London connection Contents Introduction ......................................................................................................................................................... 1 Report structure ............................................................................................................................................... 2 Part I: the corrupt deals ........................................................................................................................................ 3 A. Overview of the ‘DRC Corruption Scheme’ ........................................................................................... 3 B. Och-Ziff and relevant entities .................................................................................................................. 3 The London connection ..................................................................................................................... 5 Africa Management (UK) Limited .......................................................................................................... 5 Michael Cohen......................................................................................................................................... 6 Vanja Baros ............................................................................................................................................. 7 What the UK authorities did: SFO and the Business Secretary .......................................................... 9 C. The CAMEC transaction ......................................................................................................................... 9 The London connection ..................................................................................................................... 9 What the UK authorities did: the London Stock Exchange and AIM .............................................. 12 RAID’s renewed call for action ........................................................................................................ 13 D. The Camrose transactions ...................................................................................................................... 14 1. Overview ........................................................................................................................................... 14 2. Adding mining assets to Camrose I: Africo ...................................................................................... 16 3. Adding assets to Camrose II: Kolwezi Tailing (KMT) and SMKK .................................................. 18 E. The ENRC transactions ......................................................................................................................... 19 1. Cashing in I: the onward sale to ENRC ............................................................................................. 19 2. Cashing in II: completion of the sale to ENRC ................................................................................. 20 The London connection ................................................................................................................... 21 What the UK authorities did: the London Stock Exchange, Serious Fraud Office, National Crime Agency and Financial Conduct Authority ............................................................................................. 21 RAID’s renewed call for action ........................................................................................................ 23 Part II: ‘Suspicious payments’, sanctions and Zimbabwe ................................................................................. 24 A. Background to the sanctions question ................................................................................................... 24 B. Confirmation the Och-Ziff loan was used to buy platinum assets in Zimbabwe .................................. 25 C. Confirmation proceeds from the Och-Ziff loan went to the Zimbabwean government ........................ 26 D. Proceeds of the platinum deal used to pay for arms .............................................................................. 27 E. Inconsistencies over when and what Och-Ziff knew about the Zimbabwean platinum deal ................ 28 1. Knowledge prior to the purchase of the Zimbabwean assets ............................................................ 28 2. Knowledge after the purchase of the Zimbabwean platinum assets .................................................. 29 RAID’s renewed call for action ........................................................................................................ 31 F. Did the UK authorities fail to stop or even approve the Zimbabwe platinum deal? ............................. 31 The London connection ................................................................................................................... 31 What the UK authorities did: HM Treasury and the National Crime Agency .................................. 31 G. Sanctions targets cash in on the eventual sale of the DRC mining assets ............................................. 32 The London connection ................................................................................................................... 33 1. ENRC’s acquisition of CAMEC: licensing the purchase of shares from Rautenbach-controlled entities ....................................................................................................................................................... 33 Harvest View ......................................................................................................................................... 34 Meryweather .......................................................................................................................................... 35 What the UK authorities did: HM Treasury ..................................................................................... 36 2. Her Majesty’s Treasury and the unfreezing of assets: licences and silence ...................................... 36 What the UK authorities did: HM Treasury ..................................................................................... 37 H. Freedom of Information, continued silence and the significance of the action against Och-Ziff ......... 37 I. Restoring confidence in the UK’s sanctions regime.............................................................................. 40 RAID’s renewed call for action ........................................................................................................ 40 Endnotes ............................................................................................................................................................ 42 Annex 1 ............................................................................................................................................................. 54 Annex 2 – Key Zimbabwean officials listed under EU and US sanctions ........................................................ 59 Organisational diagrams Simplified ownership of Africa Management Limited ....................................................................................... 4 CAMEC’s DRC assets (prior to consolidation with Prairie International) ....................................................... 11 CAMEC’s DRC assets (after consolidation with Prairie International) ............................................................ 11 The Camrose transactions and onward sale to ENRC (simplified) ................................................................... 17 Boxes AML’s partners ................................................................................................................................................... 5 The secret loan and the ‘Transaction to Fund Corrupt Business Efforts in Guinea’ ........................................... 7 Baros, Cohen and QKR ....................................................................................................................................... 8 Gertler’s use of London markets: background to the CAMEC transactions ..................................................... 10 Nikanor .......................................................................................................................................................... 10 Katanga Mining ............................................................................................................................................. 10 Merger of Prairie International under CAMEC ............................................................................................. 11 AIM ................................................................................................................................................................... 13 US sanctions against Zimbabwe ........................................................................................................................ 24 EU sanctions against Zimbabwe........................................................................................................................ 25
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