Sparkle dims as taxman puts bite on carats

IN his homeland, Zimbabwe, Andrew Cranswick endured death threats and the seizure at gunpoint of his company's multibillion-dollar diamond field. Now roaming in exile, he is powerless while crooked military men and cronies of President Robert Mugabe plunder the gems in defiance of court orders.

For the moment, however, Cranswick is fuming not about Zimbabwe but Australia’s attack on his civil liberties.

While the fourth-generation Zimbabwean was seeking his fortune at home, the Australian Taxation Office deemed that he was a resident of this country for tax purposes. The Federal Court agreed and, in his absence, ruled last week that the mining executive became bankrupt, owing almost $1 million in taxes and interest, on June 9 last year – the day he left Australia for the last time.

Cranswick protests that the ruling is unjust on multiple fronts: in the targeted years of 2005 to 2009 he was living and working not here but in Zimbabwe, which also claims him for tax purposes; his many visits to Australia were solely to visit his daughters, who live in Perth with his ex-wife; they now stand to lose their home, which their father insists he never owned, following the court’s sequestration order; and he had no chance to defend himself because notification of the tax case was sent to his estranged wife’s address rather than to the home he has owned in Zimbabwe since 1990.

”So, the ATO creates a fictional assessment of tax against non-existent income of a non-Australian resident and then they use that assessment to bankrupt that person without them being allowed a defence,” Cranswick writes in reply to the Herald’s inquiry.

”Any future defence or appeal is ruled out by the law and the effective house arrest/travel ban I will be placed under if I attend to defend myself.”

A source says Cranswick, while in self-imposed exile, is currently a permanent resident of no country but his work keeps him moving through Zambia, South Africa, Mozambique, Swaziland and Britain. He is negotiating for his safe return to Zimbabwe, but Cranswick says he cannot dare to come back to Australia because authorities here have made it clear they would block his exit to Africa and Britain – and hence his livelihood.

”I suppose I might find some comfort in the curious truth that I am freer in Mugabe’s Zimbabwe than I could ever have been in Australia,” he writes.

Cranswick has been likened to Indiana Jones, which he finds embarrassing. Rather, he draws a comparison with the Crocodile Dundee star Paul Hogan, who temporarily lost his freedom to leave Australia amid a battle with the Tax Office.

Cranswick is chief executive of African Consolidated Resources, a London-registered company established by black and white Zimbabweans. In 2006 ACR discovered what is reputedly the world’s richest diamond field, in the Marange district south-east of Harare, with potential turnover of more than $1 billion a year. Precious gem-quality diamonds, like stones to the untrained eye, littered the ground. ”They were so common that children were using them in their catapults to shoot birds,” wrote Jon Swain, the veteran foreign correspondent depicted in The Killing Fields, in The Sunday Times this year.

However, within three weeks of ACR’s discovery, the Mugabe government declared it was cancelling the company’s claim. It then invited the community to fossick for the gems. Thousands arrived for the diamond rush, but soon the military and security forces repelled them, killing as many as 200 people in a matter of weeks and igniting international outrage against Zimbabwe’s own ”blood diamonds” atrocity.

In September last year, Zimbabwe’s High Court ruled that ACR was the rightful owner of the Marange field. But Swain reports that the minister of mines and army chiefs – in cahoots with two South African companies – continue to siphon millions of dollars each day from the site, even after a Supreme Court order in February for all mining to stop.

The diamond scandal is adding tension to the fragile coalition government that Mugabe has forged with the Prime Minister, Morgan Tsvangirai, and his party, the Movement for Democratic Change. Members of that party accuse Mugabe of building an election war chest and buying the support of the military by allowing soldiers to plunder the diamond field, according to a documentary screened on Britain’s Channel 4 last week.

Armed men raided Cranswick’s home and office in February. His colleague, facing a ”trumped-up” accusation of fraud, was jailed but quickly released. Cranswick, hopeful of reclaiming the diamond field, will not be drawn on any criticisms of Mugabe. But when approached by the Herald he had ”no choice” but to answer the attack on his integrity in Australia.

After marital strain dating back to the mid-1990s, his wife had decided Zimbabwe was not a safe place to raise their children and he agreed, reluctantly, to their move to Perth in 2002. He became director of a cattle farming enterprise that owned Moola Bulla Station, in the Kimberley, which handed over 8000 hectares to Aborigines and paid ”several million dollars” in tax when it sold the property. Cranswick says he ”might arguably” have been considered a tax resident in 2003-2004, but not from 2005 to 2009, the period claimed by the Tax Office.

By law, the Tax Office cannot comment on individual cases but it argued in court that Cranswick declared on his passenger cards – on 28 trips to Australia – that he was resident returning to the country and intended to live here for the next 12 months. But in June last year, on his final return to, and departure from, Australia, he had described himself as a

visitor or temporary entrant. The Tax Office said he had bank accounts here, received payments from overseas and admitted he owned two properties in Perth.

”I do not own a house in Australia and have never owned a house there,” Cranswick responds. ”The longest stretch I spent in Australia was four months in 2003 … I have spent around 30 days a year in Australia over about six visits a year, solely to see my children.

”It appears the ATO now want to seize and sell my ex-wife’s house … so it is not enough for them to deny me the right to visit my children, they now want them homeless. I would dearly have liked to have become a citizen of Australia, firstly to have the freedom to visit my children without visa restrictions, and secondly as a safe haven in the event that my residence in Zimbabwe becomes life-threatening, which has now indeed come to pass. This citizenship is no longer an option.”