Sakunda Holdings

From Pindula
Sakunda Group Holdings
Sakunda.png
Agency overview
HeadquartersHarare
Footnotes
Contact Numbers: Landline: 04 755155,
04 578880,
04 771133,
04 751196,
04 754399,
04 770430,
04 757422,
04 753253,
04 751713,
04 772306,
04 772307

Sakunda Holdings is a privately owned Zimbabwean company governed by the laws of Zimbabwe and its Memorandum of Association and Articles of Incorporation. It has three distinct operating divisions namely Sakunda Energy, Sakunda Trading and Sakunda Logistics.

The company holds a virtual monopoly over fuel distribution in Zimbabwe.

In September 2019, Sakunda had its bank accounts frozen by instruction from the RBZ as part of a money laundering investigation. Some analysts however dismissed the move as government playing mind games as despite the investigations, the commpany remained government's partner in Command Agriculture programmer and was even involved in distributing inputs the following month using its CBZ bank accounts.

Establishment

Sakunda was formed in 2005 by Kudakwashe Tagwirei.[1][2]

Subsidiaries

Sakunda Energy

Sakunda Energy is responsible for the retailing and commercial business to government, parastatals and corporate clients.[3]

Sakunda Trading

Sakunda Trading is responsible for the procurement and importation of bulk fuel from reputable international oil traders and wholesale it to Oil Companies and bulk fuel buyers including Sakunda Energy.[3]

Sakunda Logistics

This is a subsidiary that manages the movement of the fuel from importation to delivery to the eventual consumer.[3]

Organisation Structure

Sakunda structure.jpg

Trafigura Acquisation

In May 2014 it was announced that Dutch commodities gaint, Trafigura had acquired Sakunda Energy via it's South African subsidiary Puma Energy Africa Holdings where it has a 48.79% stake.[4][5]

Under the deal Sakunda owned 51% of the company with Puma owning 49%.[6]

Dema Power Plant

In January 2016, the Zimbabwean government approved Sakunda's acquisition of 200 mega watt emergency diesel power plant at Dema substation. Sakunda partnered with ARUP, Energyst, Aggreko and Trafigura. The project is to be financed by Commercial Bank of Zimbabwe Holdings, Stanbic Bank and Ecobank. Grant Thornton would come in as project accountants and Mhishi Legal Practice as legal advisors. The project was implemented to deal with Zimbabwe's power crisis that had worsened by decreasing electricity generation at Kariba Power Station due to diminishing water levels at Kariba Dam.[7]

An alternate version of this approval is interesting. Sakunda did not bid for the contract. According to the Zimbabwe Independent, APR Energy Holdings, the original winner of the contract, “was later sidelined in favour of Sakunda after intervention by the President’s Office”. At the time, Sakunda was owned by a gentleman called Kudakwashe Tagwirei. He was a close associate of the ruling party, ZANU PF. His business partner in the Dema Project project was Derrick Chikore, brother of Simba Chikore, husband to Bona Mugabe, the then President Robert Mugabe’s daughter.

It is important to note that Sakunda had no previous experience in the business of power generation. One of the tender requirements was that the successful bidder had to demonstrate experience in the field of power generation. After APR Holdings won the tender, they inexplicably lost it and it was given to Sakunda. So Sakunda sub-contracted a British multinational called Aggreko plc, which has vast experience in the business. Sakunda hired Aggreko’s services for equipment and technical expertise to set up and run the project.

Aggreko had participated in the tender process, and had therefore lost the bid to its American rival, APR. Tender documents showed Aggreko were “initially disqualified because the ‘bidder is non-compliant with mandatory technical requirements of the request for proposal’”. The winner had lost and the loser had now taken the contract, albeit indirectly, through Sakunda. Sakunda had won the contract in an irregular way. Aggreko formally announced to the stock market that it had won a three-year contract with Sakunda. Sakunda, not ZESA, was its client.

At the time, it was said that ZESA would have to pay US$8 million in advance every month, for a period of at least 3 years. The Dema Project would produce electricity at a massive cost of 15.04c/kWh – very expensive compared to hydroelectricity at Kariba, which cost 4.11c/kWh, and thermal power from the Hwange Thermal Power Station, which was priced at 6.97c/kWh. Even imports were far cheaper with imports from Zambia costing 5.18c/kWh, and 5.66c/kWh from Mozambique’s Hidroeléctrica de Cahora Bassa (HCB). This is why ZESA had applied for an increase in tariffs by 49% - a cost to the consumer.

Moreover, under the deal, Sakunda would provide fuel for the project. But it had a special concession which meant it would import duty-free fuel. That’s no taxes at all.

It later emerged that Sakunda had been bought by another multinational, Trafigura, which has a heavy presence in the fuel procurement and distribution business. But Tagwirei has remained closely associated with the company which has been lauded as a key partner in the Command Agriculture programme, in respect of which Mnangagwa claims and is given much credit. [8] [9]

Command Agriculture

Sakunda was the largest conduit of controversial government funding for agriculture, under Command Agriculture.


Money Laundering and Bank Account Freeze

In September 2019, Sakunda Holdings' bank accounts in Zimbabwe were frozen by the Reserve Bank of Zimbabwe's Finacial Intelligence Unit. In a letter to local financial institutions dated 19 Sepetmber 2019, the RBZ directed the institutions to freeze the company's accounts with immediate effect. Other companies that also had their bank accounts frozen along with Sakunda are Access Finance, Spartan Security and Croco Motors.[10]

RBZ directs banks to freeze the accounts of Sakunda, Access Finance and Croco Motors

The move by RBZ was reported to be part of a war over the forex black market.[11]

In October, state-controlled newspaper, The Herald, reported that Sakunda was disbursing inputs to the Command Agriculture programme through CBZ. This was despite the apparent account freeze.[12]

Prominent academic and political analyst, Alex Magaisa referred to the bank account freeze and investigation as just government playing mind games:

They think we are fools. Perhaps we are. Recall they said Sakunda’s accounts were frozen? Now The Herald on Command Agriculture, “Shiri said CBZ through its co-operative partner Sakunda has started distributing inputs to the various parts of the country...” Bayahlanya sibili “Where such facilities may not be available then Sakunda can move inputs to GMB depots ...” adds The Herald. So we have a company allegedly being investigated by government for suspected money-laundering but it’s still a big partner in the same government’s flagship program?[13]

References

  1. , ABOUT US OVERVIEW, Sakunda Energy, published: No Date Given, retrieved: June 9, 2016
  2. , Zim energy tycoon rescues Chiyangwa, Weekend Post, published: June 17, 2013, retrieved: June 9, 2016
  3. 3.0 3.1 3.2 , ABOUT US OVERVIEW, Sakunda Holdings, published: No Date Given, retrieved: June 9, 2016
  4. , Chris Muronzi, Foreign giants take over fuel sector, Zimbabwe Independent, published: January 23, 2015, retrieved: June 9, 2016
  5. , Tafigura takes over Sakunda, Afrca Confidential, published: May 14, 2014, retrieved: June 9, 2016
  6. , Lynton-Edward, CTC approves Sakunda takeover deal, Lynton-Edwards Stock Brokers, published: April 30, 2015, retrieved: June 9, 2016
  7. , Walter Muchingura, Govt awards Sakunda 200MW tender, Herald, published: January 7, 2016, retrieved: June 9, 2016
  8. BSR: A murky tale: The Dema Power Project Revisited, Big Saturday Read, Published: 22 October 2018, Retrieved: 7 August 2019
  9. Dema plant: A case of sleaze and pollution, The Independent, Published: 7 October 2016, Retrieved: 7 August 2019
  10. FULL TEXT: RBZ Freezes Sakunda, Access Finance, Croco Motors…… Accounts, Pindula News, Published: 20 Sep 2019, Retrieved: 20 Sep 2019
  11. RBZ freezes Sakunda, Croco Motors bank accounts, NewZWire, Published: 20 Sep 2019, Retrieved: 20 Sep 2019
  12. Government targets 1,5 million ha of maize, The Herald, Published: 12 Oct 2019, Accessed:13 Oct 2019
  13. They think we are fools, Twitter, Published: 13 Oct 2019, Accessed: 13 Oct 2019