Leaked papers reveal Muhwezi offshore links

Uganda’s Security minister, Maj Gen (Rtd) Jim Muhwezi, reportedly held shares until 2015 and 2018 in two shell companies domiciled in two tax havens; the British Virgin Islands (BVI) and Cyprus.

Maj Gen Muhwezi, who denies involvement in the overseas business, is named in a cache of leaked company and financial documents as one of three shareholders of Audley Holdings Ltd registered in BVI, a British overseas territory in the Caribbean.

The global reporting project coordinated by the Washington DC-based International Consortium of Investigative Journalists (ICIJ), and christened Pandora Papers, in which this newspaper is a partner, reveals how politicians, billionaires and the global elite used 14 offshore service providers to either secretly own property or move wealth around in a dozen jurisdictions to avoid tax.

The Pandora Papers investigation lays bare the global entanglement of political power and secretive offshore finance.

In the case of Maj Gen Muhwezi, re-elected a Member of Parliament in January,  before bouncing back to Cabinet, the alleged certificate for his shares in Audley Holdings Ltd was executed on February 3, 2015.

It reads: “This is to certify that Katugugu Jim Muhwezi is entitled to one thousand three hundred thirty-three shares (1,333) shares in the above company, subject to the Memorandum and Articles of Association of the said company.”

It is not illegal to set up an offshore account and Gen Muhwezi is not being accused of any wrongdoing.

Other shareholders in Audley Holdings Ltd, according to the resolution of the directors, are Mr Aaron Li Ran and Mr Shmuel Peled, about who much less is known as individuals and relationship with Maj Gen Muhwezi, if any.

The company, documents filed with authorities reveal, named one Edgardo Diaz and Fernando Gil, listed as residents of Panama, as president and secretary, respectively. The two would be the legal front of the company, while the shareholders’ identities remained unseen.

Panamanian law firm Alemán, Cordero, Galindo & Lee, also known by the acronym Alcogal, prepared the company’s registration documents.

According to its website, the law firm, established in 1985, is one of Panama’s top-tier law firms specialising in banking, mergers and acquisitions, capital markets, public bids, and offshore practices supported by offices in Bahamas, Belize, BVI, Seychelles, and other networks throughout Europe, Asia, and the Americas.

Audley Holdings Ltd’s directors authorised it to manage bank accounts in Europe. But regulators closed the company in 2016 for failing to pay registration fees.

In another turn of events, documents obtained by ICIJ reveal that Alcogal reported Audley Holdings Ltd and its shareholders to BVI regulators for sanction over a Suspicious Activity Report or SARs.

This was after their database search revealed an 11-year-old embezzlement allegation against Mr Muhwezi and co-accused, in relation to the alleged mismanagement of the Shs1.6b Global Alliance for Vaccines and Immunisation (GAVI) money when he was the Health minister.

The Anti-Corruption Court acquitted him at the end of July 2012.

In the SAR dated May 25, 2018, Audley Holdings Ltd shareholders are named as Mr Muhwezi, Mr Peled, Mr Ram, and one Avraham Kalderon.

Alcogal detailed in the report that it suspected the company was used for, among others, money laundering, fraud, and tax evasion, but provided no specifics or evidence to back its claims.

Maj Gen Muhwezi, who in April 2015 told his supporters that he had been patient enough to be trusted by the President, was first appointed minister of State for Primary Education in 1997, before being censured over corruption allegations.

He was later re-appointed minister for Health in 2006, but dropped shortly after over the GAVI scandal. He was arrested and tried, but later cleared of the charges.

The law firm, Alcogal, in its submissions to BVI authorities, indicated that it made several attempts to contact the company’s shareholders, including Maj Gen Muhwezi, but in vain.

“We received no response to our messages nor has he (Muhwezi) provided the documents or information of the company,” the SAR reads in part, adding: “Taking into consideration the non-response and lack of compliance, we have terminated our services as a Registered Agent, and have filed our resignation from the company accordingly.”

Both this newspaper and ICIJ, the coordinator of the Pandora Papers reporting project, contacted the Ugandan Security minister, but he denied any involvement and declined to discuss the allegations in detail.

“I don’t think I can give you more [information] than I gave them (ICIJ),” he told the Daily Monitor in a telephone interview.

“I cannot just talk about anything because I don’t know what you are talking about. Have you looked at the documents yourself; are they authentic?” he asked.

When further pressed that the documents in question were drawn by a law firm, Alcogal, and they were stamped and sealed, Maj Gen Muhwezi responded: “Then I will have to look at them myself.”

We shared a copy of the share certificate in the names of Audley Holdings Ltd with him via WhatsApp, but got no response.

Under the BVI laws, firms like Alcogal must keep records about their clients for five years after the business relationship ends. It’s unclear what, if any, due diligence Alcogal conducted before accepting Mr Muhwezi as a client in 2015.

Daily Monitor wrote to Alcogal on the matter, but got no response.

The cache of documents shows that Mr Muhwezi owned shares in another shell company, Sukari Loma Investment Holdings Ltd, domiciled in Cyprus, known to offer lucrative incorporation packages and offshore business services to investors.

Sukari Loma Investment Holdings Ltd was registered through Dubai-based SFM Corporate Services that specialises in offering incorporation services.

Other shareholders in the company registered to offer “financial services”, documents show, included Nicholas Siphiwe Tsepo Xaba, Sndie Hopeson Nomvete, and Emmanuel Nkosi --- all South African nationals.

Maj Gen Muhwezi wrote on a signed beneficial owner statement stating that his finances came from “salary savings” and his hotel and radio stations.

The Cyprus Corporate Registry, however, details that the company was dissolved in 2015.

The BVI connection

In a separate suspicious activity report to BVI authorities, Alcogal flagged two other companies — Concierge Unique Limited and CUL Capital Ltd — both linked Avraham Kalderon as a shareholder.

Documents show that other shareholders in Concierge Unique Limited included Apostolos Voutas and Robert “Bob” Munanura Kabonero, a renowned Kampala businessman.

The law firm indicated that the company was likely involved in money laundering, fraud and tax evasion.

Concierge Unique Limited was specifically flagged, the SAR details, after establishing Mr Kabonero’s previous connection to the 2007 Commonwealth Heads of State of Government Meeting (Chogm) vehicle procurement scandal, and relation to Mr Muhwezi “as a brother-in law.”

Alcogal detailed that it unsuccessfully contacted Concierge Unique Limited for explanation and consequently resigned as a registered agent for the company in the BVI.

There are no records of the company in the local Uganda Registration Services Bureau (URSB) registry.

CUL Capital Limited’s other shareholders, documents show, included Mr Kabonero, Maria Odido, and Murad Naoum. The company was also red flagged, the SAR details, over Mr Kabonero’s previous connection to the Chogm vehicle deal, and association to Mr Muhwezi.

Alcogal detailed that it unsuccessfully contacted CUL Capital Limited for explanation, and consequently resigned as a registered agent for the company in the BVI.

CUL Capital Limited was also incorporated locally (in Uganda), according to URSB records under the names of Naoum Murad, an Israeli national, and C.Y Kalderon Ltd. The company, however, has no known online presence nor known address.

Ms Odido told Daily Monitor that she is acquainted with the company, but had not dealt with it for close to seven years.

“I knew Avi (Kalderon); he was working in Uganda. That very company (CUL Capital Limited) claimed to be dealing in financial services, but I have not dealt with it in many years. I am a business woman and I don’t engage in suspicious activities,” she said.

Ms Odido operates a string of businesses in Kampala, including real estate property such as Pan Africa House on Kimathi Avenue, housing Kampala Casino, which in turn is linked to Mr Kabonero through the company, Audley Ltd.

In response to our inquiries, Mr Kabonero said he is a private businessman and can open an offshore company, but denied knowledge of CUL Capital Ltd and Concierge Unique Ltd.

“As far as Audley (Ltd) is concerned, it was legally registered in 1994 and [I] have the necessary documents, but I have no knowledge of Audley Holdings Ltd and never heard of it,” he added.

He acknowledged that he is a director in Audley Ltd, the holding company for two casinos in Kampala, alongside Mr Ran and Mr Peled. He, however, said Maj Gen Muhwezi was not involvement in the company.

Audley Ltd, according to URSB files, was incorporated in the Isle of Man, a self-governing British Crown territory in the United Kingdom.  In 2015, an Israeli businessman, Shmuel Hirshberg Muli, sued other directors, Mr Peled, Mr Ran, Mr Kabonero, and Audley Ltd, following a dispute over shareholding in the company.

The Pandora Papers, a mix of spreadsheets, tax declarations, invoices, PowerPoint presentations, emails and company records listing directors and shareholders, detail several Ugandan businessmen setting up offshore companies particularly in Dubai, Seychelles, among others.

Background

About the Pandora Papers

Pandora Papers is a giant 2.94 terabytes leak of more than 11.9 million confidential, financial and legal records from 14 offshore service providers and enterprises that set up and manage shell companies and trusts in tax havens around the globe.

The 14 offshore service providers whose documents make up the Pandora Papers data set include three owned by former government officials. They operate in jurisdictions including Anguilla, Belize, Singapore, Switzerland, Panama, Barbados, Cyprus, the United Arab Emirates, the Bahamas, the British Virgin Islands, the Seychelles and Vietnam, and they draw clients from more than 200 countries and territories.

The International Consortium of Investigative Journalists (ICIJ), and more than 600 journalists in 117 countries and territories, spent a year sifting through 2.94 terabytes of files on the offshore world and financial secrets of politicians, billionaires and the global elite. It is ICIJ’S largest ever investigation.

The Pandora Papers investigation lays bare the global entanglement of political power and secretive offshore finance.

Based upon the most expansive leak of tax haven files in history, the investigation reveals the secret deals and hidden assets of more than 330 politicians and high-level public officials in more than 90 countries and territories, including 35 country leaders.

Ambassadors, mayors and ministers, presidential advisers, generals, and a central bank governor appear in the files.

The files reveal secret offshore holdings of more than 130 billionaires from 45 countries, including 46 Russian oligarchs. 

In 2021, according to Forbes, 100 of the billionaires had a collective fortune of more than $600 billion. Other clients include bankers, big political donors, arms dealers, international criminals, pop stars, spy chiefs and sporting giants.

The documents span five decades, with most created between 1996 and 2020. They include information on more than 29,000 beneficial owners, the ultimate owners of offshore assets. That is more than twice the number of owners found five years ago in the Panama Papers investigation, which was based on a leak from a single law firm.       

They include spreadsheets, tax declarations, invoices, PowerPoint presentations, emails and company records listing directors and shareholders. They also include suspicious activity reports, sanctions lists, due diligence reports, know-your-customer forms, passports, utility bills and photos.  

They reveal details of international energy, technology and property holdings and deals, as well as complex inheritance arrangements.

ICIJ’s publication of Pandora Papers stories comes at a critical moment in a global debate over the fairness of the international tax system, the role of Western professionals in the shadow economy and the failure of governments to stanch the flow of dirty money into hidden companies and trusts.

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