From the Globe and Mail 15-12-2022
RCMP obtains search warrant for Ivanhoe Mines office in hunt for documents on Swiss bank account transfers
GEOFFREY YORK AFRICA BUREAU CHIEF
JOHANNESBURG
PUBLISHED YESTERDAY
UPDATED 1 HOUR AGO
The RCMP has searched the Vancouver office of Ivanhoe Mines Ltd. to seek information on $2.7-million in bank transfers from Ivanhoe to a Swiss bank account in connection with contracts for its Congolese mining operations, The Globe and Mail has learned.
The RCMP obtained the search warrant after saying it had reasonable grounds to believe that Ivanhoe violated Canada’s Criminal Code and Corruption of Foreign Public Officials Act between 2014 and 2018, according to a brief disclosure by Ivanhoe in an annual information form.
Ivanhoe co-operated in the search of its Vancouver office in November, 2021 and no charges have been laid against the company or its directors or employees, Ivanhoe said in the disclosure earlier this year.
British Columbia court documents in the case – obtained by The Sentry, a U.S.-based investigative organization, and shared with The Globe – contain a six-page list of documents and computer equipment that the RCMP was authorized to seize from Ivanhoe’s office. Some of the documents authorized for seizure were related to three bank transfers from Ivanhoe to the Swiss bank account of a company called Stucky Technologies from 2015 to 2018.
Ivanhoe retained Stucky Ltd., a well-known Swiss engineering firm, to work with Congo’s state electricity company on hydropower supplies for Ivanhoe’s giant Kamoa-Kakula copper project in the Democratic Republic of the Congo (DRC).
Stucky Technologies, however, is a separate company registered in the British Virgin Islands, according to documents obtained by The Sentry and shared with The Globe. The relationship between the two companies is unclear.
In response to questions from The Globe, Ivanhoe said it cannot comment in detail on the RCMP search because there is an ongoing police investigation. It confirmed, however, that the search warrant authorized the seizure of documents relating to Stucky Ltd. and Stucky Technologies, as well as the DRC’s state-owned power company.
“Ivanhoe has worked co-operatively with the authorities in respect of the seized material, including in developing a process for the review of privileged materials, which is ongoing,” the company said Wednesday.
The mining project in Congo is a joint venture in which the biggest partners are Ivanhoe and the Chinese company Zijin Mining Group, each of which owns almost 40 per cent of the project. The Congolese government has a 20-per-cent stake. Ivanhoe says the mine will be the world’s third-biggest copper mining complex by 2024.
The RCMP search is an example of how Ivanhoe is increasingly under scrutiny for its operations in Congo, a vast impoverished country with huge mineral wealth. Congo’s murky governance and the dubious dealings between some Congolese officials and international companies have been exposed in several recent corruption cases involving commodities giant Glencore and others.
A new 48-page investigative report by The Sentry, published on Thursday, alleges that Ivanhoe received preferential treatment when Congolese authorities extended its exploration licences beyond the legal limit of 15 years, with some of these extensions gaining approval far more speedily than the average processing time for other applicants.
Around the time in 2018 when the first licences were due to expire, the report said, Ivanhoe created a company in which a minority ownership stake was allocated to the politically connected Congolese businessman Théophas Mahuku, a close friend of the family of Joseph Kabila, Congo’s president from 2001 to 2019.
In addition to other family connections, Mr. Mahuku was also a business partner of Mr. Kabila’s brother, Zoé Kabila, in several corporations in the mining sector and elsewhere, including at least one company that did business with Ivanhoe, The Sentry said.
It also reported that Mr. Mahuku gained a stake in another company established by Ivanhoe executives in 2020. Both of these Ivanhoe-created companies ended up in possession of exploration licences that should have expired, since the company was legally required to surrender them 15 years after they were obtained in 2003 and 2005, the report said.
Ivanhoe, in response to The Globe’s questions, denied receiving any preferential treatment and emphasized that it had followed all national and international laws. Processing times can vary substantially in different cases, it said. “In our case, we do expect that given our track record of discovery, development and job creation in the DRC, that we are considered a highly credible applicant, a factor that we expect any government would take into consideration in processing these types of applications.”
Asked about Mr. Mahuku’s ownership stake, Ivanhoe said the new DRC mining code in 2018 required that Congolese nationals must own 10 per cent of the share capital of Congolese companies holding an exploitation permit. “Mr. Mahuku holds the required 10-per-cent shareholding in two entities that hold exploration permits that are in the process of being converted into exploitation permits,” it said.
Ivanhoe also told The Globe that it is legally permitted to apply again for a new exploration permit when the old one expires, as long as it is the first to submit an application. It said it has sometimes followed this procedure to reapply for expiring permits.
In the past, Ivanhoe has publicly acknowledged that there could be questions about how it obtained some of its mineral rights in the DRC. In the “Risk Factors” section of its annual information forms, Ivanhoe warns investors that its title to mineral rights in the DRC could be subject to claims resulting from “irregularities” in the granting of its licences – or from “the use of administrative processes not specifically contemplated by the DRC Mining Code” when the licences were obtained.
The exploration licences were first granted in 2003 and 2005 to Ivanhoe’s predecessor company, African Minerals Corp., in the Western Foreland project area, near Ivanhoe’s main copper mine. Ivanhoe has often touted the Western Foreland area as having “tremendous” and “unparalleled” potential, although it is still undeveloped today.
After transferring ownership stakes to Mr. Mahuku in the companies that took control of the licences, Ivanhoe continued to tell investors publicly that it had 100-per-cent ownership of the licences, The Sentry report said. Ivanhoe, asked about this, told The Globe that it adheres to all securities laws in disclosures to shareholders on the nature of its permit holdings.
The Sentry report called for an investigation by the Congolese government, an independent internal investigation by Ivanhoe, and reviews by the Canadian and U.S. governments and financial institutions.
If the company had surrendered its exploration licences after 15 years as it was legally required to do, other investors could have developed the properties, creating jobs and benefits for Congo, it said. It called for official investigations of the issues relating to the licences.
“The people of the DRC deserve a government that puts poverty alleviation before the interests of insiders and power brokers,” said The Sentry’s senior investigator, Douglas Gillison. “But in this case, the evidence suggests that, with a lot of money at stake, the law didn’t seem to apply to a top operator with high-level connections.”
In an earlier published report, Ivanhoe again came under scrutiny for its alleged dealmaking with politically connected insiders in Congo. The report, published in September by the Organized Crime and Corruption Reporting Project (OCCRP), an independent global investigative organization, was based on hidden-camera recordings of comments
last July by Vidiye Tshimanga, who was then a close advisor to Congolese President Félix Tshisekedi.
In the video recordings, Mr. Tshimanga claimed to hold 20 per cent of an unidentified Ivanhoe mining subsidiary. He told unidentified people, whom he believed to be investors, that he could help them to receive mining licences and cut through bureaucratic obstacles in Congo in exchange for a stake in a joint-venture project. He later denied that these comments were true, saying that he had been entrapped into them. He resigned from his post and faces possible criminal charges in Congo after being briefly detained.
Ivanhoe, responding to The Globe’s questions, said it had “entered a term sheet with a Congolese entity beneficially owned by Mr. Vidiye Tshimanga” for a joint venture on certain exploration licences in early 2021. The entity later “reneged on the commercial terms of this agreement” and Ivanhoe launched international arbitration proceedings, which are still continuing, Ivanhoe said.
RCMP = Royal Canadian Mounted Police.
Googling the name Théophas Mahuku, brings up all sorts of strange connections.
It even gets back to President Felix Tshisekedi's close adviser, Fortunat Biselele.
Interesting to know who more of the Felix Government is on the take.
And even our old friend Guy Loando gets a mention in this one year old report:
INTERNAL FIGHTING
DRC: A discreet palace war is taking place within Tshisekedi’s inner circle
By
Jeune Afrique
Posted on Thursday, 2 December 2021 17:38
François Beya, Fortunat Biselele and Corneille Nangaa. © Photomontage / Photos: DR; DR; Gwenn Dubourthoumieu for JA
Several people close to the DRC’s President Felix Tshisekedi, including advisors, ministers and even securocrats, have been trying to unpick a mining dispute for several weeks now.
Tshisekedi has entrusted unravelling the mystery to his trusted security adviser to François Beya: when Emirati investor showed up to invest in a mining project, it was found to be not for sale.
The affair starts with Corneille Nangaa, the former president of the Commission Electorale Nationale Indépendante (Ceni).
At the end of his term, Nangaa declared his assets to the Constitutional Court. In a letter dated 26 November that we were able to access, the Ceni’s honorary president listed – among the assets in his possession – seven vehicles, including three that belong to his wife, Yvette Lubala Nazinda.
READ MORE DRC: President Félix Tshisekedi under pressure from the UN
Nangaa also stated that
he has five bank accounts and owns 11 plots of land, which are located between Kinshasa and the province of Haut-Uélé, where he is originally from and which his brother, Christophe Baseane Nangaa, has governed since 2019.
The Ceni’s former president does business in this same province, which is located in the northeastern part of the country. He owns a cocoa plantation and a palm grove, as well as a plot of land in Kolwezi, which is situated in the mining province of Lualaba. The timing of this declaration of assets is extremely noteworthy.
Scandal
For several weeks, Nangaa – as well as a handful of President Felix Tshisekedi’s advisers and ministers – have been embroiled in a scandal concerning a mining project that he invested in through an intermediary.
READ MORE DRC: President Félix Tshisekedi takes charge
The case in question concerns the Zani Kodo mining site in Ituri province, which is owned by the Kilo-Moto mining company (Sokimo).
The Congolese state owns 30% of this company, while private shareholders hold the remaining 70%.
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In 2017, Kodo Resources held the Zani Kodo mining permit. This was a private company in which Sokimo was a minority shareholder and the majority of shares were held by private individuals. Among them was Pianeta Mining, whose deputy general manager, Dede Muna, represents Nangaa and José Mpanda, the current minister of mining research.
Mining permit gone
According to our information, Pianeta has tried to sell its shares. The company Amarik positioned itself and then approached the Kabwa firm, which was headed by Tete Kabwa Kabwe, who was one of Tshisekedi’s advisors until he died in June.
Through Kabwa, other figures were later involved in this transaction, including Guy Loando, the current minister of territorial development, and Fortunat Biselele, Tshisekedi’s private adviser. The aim was to facilitate the withdrawal of Pianeta’s shareholders and thus the provision of the operating licence.
However, when an Emirati group wanted to invest in the DRC, the famous permit proved unavailable, even though Tshisekedi had been informed that shareholders had in fact withdrawn.
Series of hearings
As a result, the Congolese president asked that some light be shed on this matter and has entrusted this dossier to François Beya, his special security adviser. This pillar of the president has been mandated to conduct hearings at the Conseil National de Sécurité (CNS) to try to understand why the Pianeta shareholders did not withdraw as planned.
Interrogations began on 12 November. Ministers José Mpanda (scientific research) and Guy Loando (territorial development) as well as Nangaa have already been questioned.
READ MORE DRC: 'Felix Tshisekedi is part of the problem, he cannot be the solution' - Muzito
Nangaa and Biselele had scheduled a meeting for 17 November, but the latter did not show up. The privy councillor – who Tshisekedi had sent on an official mission to Kigali – finally returned to Kinshasa on the morning of 19 November.
According to our information, he has still not appeared before the CNS. The affair is causing a stir within the head of state’s entourage. Some advisers, such as Beya and Biselele, have complicated relations.
The more one digs, the more one asks will Felix be able to sort this mess, or is he also deeply involved.
