Dutch state-owned bank flouting EU sanctions

The issue of EU sanctions was brought to the forefront following revelations that Swiss food giant, Nestle, was buying milk from Gushungo Dairy Estate, a farm owned by Mugabe and his wife Grace. Nestle said it would stop buying milk from Mugabe on Sunday.

A Swedish company, DeLaval, was also put under the spotlight for selling dairy equipment to Mugabe. A company spokesman regretted that the transaction had been allowed to go through when it should never have been.

The European Union imposed targeted sanctions on Mugabe and his lieutenants in 2002. The United States did the same thing with its sanctions becoming effective 2003.

According to Britain’s Daily Telegraph "the sanctions forbid direct or indirect funds or economic resources" being given to persons on the sanctions list but a Netherlands based company has been assisting several companies that have listed persons among their directors.

African Management Services Company (AMSCO) which is registered in the Netherlands but moved its operational headquarters to Johannesburg has been assisting River Ranch Diamond Mine where former Zimbabwean army commander Solomon Mujuru has a stake as well as Innscor Corporation where Ray Kaukonde is a shareholder and chairman of some subsidiaries.

Both Mujuru and Kaukonde are on the EU and US sanctions lists.

AMSCO is a joint venture of the International Finance Corporation, the commercial arm of the World Bank, and the United Nations Development Programme.

Its shareholders include Agence Francaise de Development, the main operator for the French Official Development Assistance; Banco BPI, a Portuguese financial group; FMO, the Netherlands Development Finance Company; FINNFUND, the Finnish Fund for Industrial Cooperation; IFU, the Danish Industrial Fund for Developing Countries; and Norfund, the Norwegian Investment Fund for Developing Countries.

AMSCO also says its donors include Denmark, Finland, Ireland, the Netherlands, Norway, Portugal, Sweden, Switzerland and the United Kingdom.

Its bankers are reported to be ABN-AMRO, a Dutch bank in which the state has a stake. Companies that are assisted by AMSCO pay for its services through ABN-AMRO in the Netherlands. AMSCO still maintains an office in the Netherlands where its company secretary is based.

ABN-AMRO has not responded to several inquiries about its relationship with AMSCO and whether it was getting any funds from River Ranch or its sister companies. AMSCO and River Ranch have refused to discuss the financial aspects of their relationship saying this is confidential.

AMSCO assisted River Ranch by seconding five managers in November 2004 to help revive the diamond mining company which had been closed for nearly four years but it terminated its contract in July 2007 following allegations that the mine was smuggling diamonds out of the country because it was not allowed to sell them on the open market because of an ownership dispute.

It was also assisting Shearwater, a subsidiary of Innscor Corporation, and Innscor itself and all Innscor subsidiaries outside Zimbabwe.

It is not clear whether the company is still assisting Innscor as its website and annual report no longer list companies that it assists.

AMSCO does not offer any financial assistance but it is instead paid for its services. However, companies that it assists enjoy tremendous benefits including tax concessions and duty exemptions which is why even foreign –funded companies find it attractive.

Mujuru and his business partner, Saudi Arabian billionaire Adel Aujan who is the majority shareholder, took over River Ranch through a boardroom coup in April 2004 almost similar to the way Mugabe grabbed the dairy farm by kicking out the previous owners, Bubye Minerals, which was owned by a white couple Michael and Adele Farquhar.

AMSCO seconded five managers to revive the mine six months later.

Bubye complained about AMSCO’s bailout to the European Union and then United States secretary of State Condoleezza Rice but never got a response.