Grace expands her diamond business to Asia, Kamushinda involved

The first lady was focused on two investments designed to keep the Mugabes rich should they one day be forced into exile from Zimbabwe, where thousands are starving and ravaged by cholera and opponents are jailed, beaten and tortured.

One investment was a £4m Hong Kong property in a walled and gated complex where residents enjoy quiet gardens, a clubhouse and a swimming pool. The other was a multi-million-pound diamond venture she is considering launching in China. This involves locating a centre for cutting and polishing diamonds at Qingdao, on China’s east coast, in conjunction with Zimbabwe’s central bank, which is notorious for funding her extravagant travels abroad.

The associate with whom she was discussing the diamonds also had a hand in the purchase of the property. 

Last week the Mugabes’ bolt-hole in Hong Kong was exposed by a Sunday Times investigation that highlighted a web of financial intrigue stretching across some of the most exotic and luxurious spots in the Far East, from Malaysia and Singapore to Thailand and Vietnam. It also focused attention on the aggressive methods the Mugabes have used to protect their interests, whether political or financial.

When two journalists went to photograph the house on Friday they were attacked by three African occupants intent on defending the secret of its ownership. Both journalists required medical attention.

It is the first time a Mugabe property in the Far East has been publicly identified despite rumours that the dictator, 84, and his wife, 40 years younger, own several in the region.

This newspaper has established that early last year a man called Hsieh Ping-Sung – whom Grace Mugabe knows as “Jack” – began helping her to buy an opulent residence from a UK-based vendor. Hsieh is the holder of a South African passport which shows that he was born in Durban in 1959. Authoritative sources in Zimbabwe say he has an office in Harare, the capital, and often stays at Meikles, its grandest hotel.

Towards the end of January 2008, Hsieh flew from Hong Kong to Harare, having made thousands of dollars’ worth of purchases, including footwear and T-shirts, on behalf of Grace Mugabe. The items may have been intended for distribution to her husband’s supporters during campaigning for an election the president stole from Morgan Tsvangirai, his rival.

Six months later, on June 28, Cross Global, a company Hsieh had bought off the shelf, acquired House Number Three, JC Castle, 18 Shan Tong Road, Tai Po, for HK$40m (now £3.6m). Sources in Zimbabwe say the Mugabes have the controlling interest in the property. JC Castle is in an isolated estate on a hill surrounded by verdant countryside in the northern reaches of the former British colony.

Its villas and flats cater mostly for affluent Chinese fleeing the smog of Hong Kong’s densely populated central districts. By Hong Kong’s compact standards, the properties are generously proportioned and command high prices.

The complex is developed and managed by one of Hong Kong’s richest and most colourful tycoons, Albert Yeung, whose Emperor group promotes the estate on its website.

Yeung has interests in the casino and entertainment industries and has long been linked by the Hong Kong press to the triad underworld gangs that infest those industries. While he has been investigated by the antitriad division of the Hong Kong police and has appeared in court, he has never been convicted and denies any wrongdoing.

Attempts to reach Hsieh were unsuccessful: an Indian man who answered the door at the company’s registered address, a flat in a tenement block, said he was away.

Western governments say that Mugabe runs one of Africa’s most corrupt regimes and that the president, his cronies and the first lady – known as Dis Grace, First Shopper and Grasping Grace by critics who decry her lavish shopping sprees – have siphoned millions of pounds from Zimbabwe and concealed it in bank accounts and property investments, many in the Far East.

Banned from the European Union and America, the Mugabes have come to regard Asia as a haven where they can go on holiday, indulge themselves unnoticed and guard their investments.

Like other members of Zimbabwe’s ruling Zanu-PF elite, they have educated their children at Asian universities. Grace’s son Russell, by her first marriage, to a Zimbabwean air force officer, has been a student in Bangkok. Bona, her daughter by Mugabe, is studying in Hong Kong.

The Mugabes are said to have spent years establishing an eastern financial empire. The president boasted that his policy of building friendship with China and the Asian “tigers” was bringing new economic partnerships and opportunities to his impoverished nation.

“We have turned east, where the sun rises, and given our back to the west, where the sun sets,” he has been fond of saying. His opponents rubbish this “look east” policy as, in effect, “crooks east”, largely for Mugabe’s benefit.

The Mugabes have meticulously cultivated a network of partners and hangers-on across the region to nurture their interests and perform favours.

One of the most important roles of such fixers has been to pamper Grace Mugabe and satisfy her voracious appetite for luxury goods ranging from handbags to gems.

On one trip to Paris in 2003, after finding a loophole in a European Union travel ban, she was estimated to have spent £75,000 on luxury items in a day. She was reportedly once seen with 15 trolley-loads of such treasures in the first-class lounge of Singapore airport. Her champagne lifestyle has been funded throughout by Gideon Gono, head of the central bank, who is said to have given her £64,000 for her most recent holiday.

An £8,700 handbag bought in Singapore is one of her latest acquisitions. On a trip to Vietnam she purchased £55,500 worth of marble statues from Nguyen Hung, a sculptor, for the extravagant mansion she was building in Harare.

Her visit in autumn 2006 is still remembered with a chuckle in Danang. Hung’s brother Nam said yesterday: “The VIP lady bought many marble statues here, lots of vases and animal statues. She stayed just one day but she had seen our website and had been communicating with us for a long time by e-mail. Some of the statues took six months toa year to complete.”

Grace Mugabe’s acquisitiveness seems to know no bounds. In Zimbabwe, where she already has several farms, she has just seized another, this one from a High Court judge who had taken it from its original white owner. She apparently wanted the property for Russell, her son.

There is no definitive accounting of the Mugabe family’s wealth. Authoritative sources in Zimbabwe say they have hidden millions away at a bank in Kuala Lumpur, the Malaysian capital. Gono, who manages their finances, and Constantine Chiwenga, chief of the defence forces, allegedly have accounts at the same bank. The sources believe that a team of accountants suspected of links to Mugabe and his henchmen manage 10 to 12 accounts in a separate bank in the city.

Mugabe has long made a virtue of developing a strong relationship with Malaysia, a country that he and Grace love to visit and where they are believed to have property as well as bank accounts. It was Enock Kamushinda, an Indian-educated Zimbabwean banker, who was the driving force to establish such links with southeast Asia.

Kamushinda was financial adviser to Mugabe’s first wife, Sally, whose death from kidney failure in 1992 freed the president to marry Grace, his mistress and secretary. Although Kamushinda left Zimbabwe after investigations into alleged financial irregularities and now lives in exile, he remains close to the Mugabes. Sources said he still times his trips to Malaysia, where he established the only overseas branch of a Zimbabwean bank, to coincide with the president’s.

In 2002 Kamushinda was placed on a blacklist by the United States and other countries as one of a number of businessmen who supported Mugabe’s regime. His name was later removed.

While Malaysia – in particular the Berjaya Langkawi beach and spa resort on the island of Langkawi – is the Mugabes’ favoured holiday destination, they also like to visit Singapore, Hong Kong and Bangkok.

Wherever they go they readily turn their backs on the grinding poverty of their country and spare no expense at their luxury accommodation – the Meritus Mandarin in Singapore, the Shangri-La in Hong Kong and the InterContinental in Bangkok. On some occasions two floors of a hotel have been shut off for their entourage.

All the hotels are luxurious but some aspects of the Mugabes’ financial dealings are decidedly shabby. They involve the back streets of Hong Kong, dodgy paperwork and hotel bills settled with bags of cash.

In addition to Hsieh in Hong Kong, the money trail throws up an odd cast of Asian characters in Kuala Lumpur, Bangkok and Singapore, acting as courtiers for the Mugabes.

One is Mahmood Awang Kechik, a Malay urologist and specialist in erectile dysfunction who is Mugabe’s personal physician. Kechik has treated him for prostate problems for years but the relationship developed into a business one. Just over a year ago, Kechik abandoned his medical practice and went into business.

In Thailand is Nalinee Joy Taveesin, a prosperous and well connected businesswoman who prides herself on her charity work and who is president of the Thai-Australian Association.

In November, the US Treasury Department tightened sanctions against Mugabe and the cronies who had ruthlessly campaigned to keep him in power through the violent intimidation of opponents who had defeated him and his party at the polls.

As a result Kechik and Taveesin both found themselves blacklisted. Any assets within US jurisdiction were frozen and Americans were prohibited from conducting transactions with them.

The US Treasury Department was particularly hard on Taveesin, accusing her of facilitating financial, real-estate and gem-related transactions on behalf of Grace Mugabe and Gono while participating in good works.

“Ironically, Nalinee Taveesin has participated in a number of initiatives on corruption and growth challenges in Africa and southeast Asia while secretly supporting the kleptocratic practices of one of Africa’s most corrupt regimes,” it said.

Taveesin confirmed last week that she had been a friend of the Mugabes for years, but said: “I have no business involvement with the Mugabes.”

The US Treasury Department claimed that Kechik had been conducting secret transactions with a number of Zimbabweans under sanctions, including Gono and Chiwenga, the defence chief, to generate wealth for them and for the regime. It also said he had used his medical practice to disguise the ultimate destination of medical equipment shipped to Mugabe. Associates of Kechik said last week that they had no idea where he had gone.

In Singapore the Mugabes’ facilitator is a businessman, Jeffrey Ng, owner of Microware Systems. Sources in Zimbabwe said that Ng had helped to buy the $12,500 handbag for Grace Mugabe. He also maintained contact with Bona, studying in Hong Kong, and with Gabriel, a nephew of Mugabe who has undergone medical treatment in Singapore.

The importance of Ng’s role was demonstrated in January when Mugabe gave him dinner at the Mandarin hotel, where he was staying. Ng is believed to be arranging to ship more than $500,000 of computers and other electronic equipment to Zimbabwe.

Last week The Sunday Times approached Ng to ask about his relationship with the tyrant. After confirming that he was “Jeffrey”, he said: “You are talking to the wrong man in the wrong place. This is Singapore.” Then he broke off the conversation and walked away.

This weekend the Mugabes were in Harare, where the president entered a power-sharing agreement with Tsvangirai’s Movement for Democratic Change shortly before locking up two of its most prominent members.

However, he and his wife will need to start worrying about the security of their Far Eastern investments. These will come under closer scrutiny by the financial authorities in Hong Kong, where new money-laundering laws have created a special category of “politically exposed persons” for surveillance. Experts say regulators appear obliged to monitor their transactions.

The Hong Kong legislation defines such persons as government, judicial, military and political party officials, plus their families and associates, from countries “where corruption is widespread” and says the risk factors include “unexplained wealth”, the use of accounts at a government bank and any request for secrecy.

By any yardstick, the Mugabes fit that category.