- Category: Stories
- Published on Wednesday, 15 December 2010 09:21
- Written by Charles Rukuni
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African Consolidated Resources chief executive Andrew Cranswick has been described as a cowboy capitalist who took advantage of inside knowledge about the diamonds in Marange to peg claims that have now been wrested from him by the government.
The diamonds in Marange were first discovered by De Beers but were taken over by ACR after De Beers’ exclusive prospecting order expired. The government, however, says ACR acquired the claims fraudulently. ACR argues that its ownership is legitimate.
The latest revelations came after The Insider queried why non-governmental organisations opposed to Zimbabwe’s admission to the Kimberley Process Certification Scheme, the European Union and the World Diamond Council had never investigated ACR’s ownership when a review team in which they were represented reported way back in 2007 that there was something amiss with the way ACR had acquired the claims.
The three were represented in a seven-member KP review team that visited Zimbabwe from May 29 to June 1, 2007. In the team’s report which The Insider got by “mistake” because it is specifically for KPCS participants, the team says…. “African Consolidated Resources applied for the rights to the area (Marange) but in a manner that seemingly bypassed the Ministry of Mines in Harare…”
Asked what it had done in the three years since to establish the authenticity of ACR’s ownership of Marange, the European Union said its position “has always been that it was for the Zimbabwean courts to resolve”.
The World Diamond Council did not respond to the question. Cranswick, however, told US ambassador to Zimbabwe James McGee that one of the WDC team members Ernest Blom was involved in illegal diamonds from Marange. Cranswick has since denied saying this claiming he never met any US officials.
The Insider has written to Blom but has not received any response. In a letter to the diamond industry, Blom said he categorically denied any illegal trading or boasting about it as Cranswick allegedly said in the Wikileaks dispatch.
“I had never travelled to Harare before I went up there as part of the KP review mission in 2007. I have only ever met Cranswick twice in my life. The last time over a year ago when he tried to elicit my assistance to get his mine back, which I declined.”
In the comment to his dispatch McGee said it was also clear that “Cranswick is a businessman trying to find any pressure point he can through which to leverage his own claim”.
Partnership Africa Canada, one of the NGOs that were represented on the team, said the legality of ACR’s ownership of the Marange claims was up to Zimbabwe’s courts.
Its spokesman, Alan Martin, however, said there was little doubt that ACR had a very educated idea about the potential wealth of Marange the day it pegged the claim and chose to delay going public with its find.
ACR pegged its claims between 4 April and 19 June 2006 but only announced the discovery of diamonds on 24 September 2006. Yet according to the KP review team’s report, the Minerals Marketing Corporation of Zimbabwe’s first alert that diamonds were being dug by small miners in Marange came in about May 2006. The first purchase of Marange diamonds was from a licenced gold miner, who brought 724.72 carats of diamonds to MMCZ in Harare for sale on 28th August 2006.
A senior employee of De Beers who had intimate knowledge of the diamonds in Marange told The Insider last year that the chaos in Marange arose after ACR asked villagers to help it collect the diamonds but failed to control the digging when people became aware of the diamonds and flooded the area.
Cranswick refuted this claim.
Martin says the best evidence that ACR was aware of the existence of diamonds in Marange before pegging its claims was the fact that it poached a De Beers geologist who had intimate knowledge of the area and went to work for Cranswick after falling out with De Beers.
“ACR,” he added, “has always had trouble explaining in public how it managed to make such a large blanket claim of Marange without having the time or manpower usually necessary to map out a concession of that size - approximately 68,000 ha or roughly the size of greater New York City.”
The geologist admitted to The Insider last year that he worked for ACR but claimed he did not know about the diamond find in Marange though the diamonds were discovered three years before he left De Beers.
Martin said even De Beers knew they were on to something unusual when they gave up the claim. “However, no one imagined that the find would be potentially as lucrative as some within industry are now making it out to be.”
De Beers says it discovered the diamonds in Marange in 2002 but did not exploit them because it was not interested in alluvial diamonds but in kimberlites.
Martin said PAC had never taken sides on the ownership of the claims other than to point out the legal history of the issue.
“Most people, including us, recognise that Andrew Cranswick has a history as a cowboy capitalist. Our last report, Diamonds and Clubs, captured some of that and certainly was not an endorsement of either Mr. Cranswick or ACR,” he said.
“The legality of the issue is a matter for the Zimbabwean courts. If there is political interference in resolving the legal title to ACR's claims that is not something of immediate concern to PAC, whatever it may say about Zimbabwe's lack of judicial independence or respect for the rule of law. Our main point about ACR (and to a lesser extent River Ranch) is that who controls the resources, and how it is used, are intimately tied to the larger political story of Zimbabwe.”
In the report Diamonds and Clubs published in June this year, PAC says much of ACR’s problems stem from the fact Solomon Mujuru is a shareholder.
“ACR contends that his share is no bigger than 3%, worth a monetary value of 240 000 pounds sterling,” the organisation says.
Cranswick has vehemently denied that Mujuru owns a stake in ACR, but the PAC report says this information was obtained in an interview with an ACR representative in Harare on April 9 this year.
The report says no one believes that Mujuru owns such a small stake because “there is nothing about Solomon Mujuru that is small time. He is not the kind of guy who buys shares and sits back waiting for the investor newsletter,” the report quotes an industry leader as saying.
It adds that Mujuru was supposed to provide Cranswick with political coverage, as he (Cranswick) comes from a family with the wrong political pedigree- known big supporters of former Rhodesian Prime Minister Ian Smith.
“Instead, Cranswick is now paying the price for backing the wrong horse in the ZANU succession race”, the report says.
The Insider first reported about ACR’s dubious ownership of the Marange claims last year, soon after ACR had won a High Court case over the claims. Cranswick claimed the story was inaccurate but did not offer anything substantive to refute the story.
When The Insider published further stories about his activities including one that he tried to rob an indigenous miner of his diamond claims in the Lowveld, Cranswick accused The Insider of working for Mbada, one of the companies that was granted the Marange claims in a joint venture with the government owned Zimbabwe Mining Development Corporation.
Cranswick has persistently accused the directors of the companies that were given “his” claims of being “crooks” who were after looting the Marange diamonds. He has also accused several high ranking officials including First Lady Grace Mugabe, central bank governor Gideon Gono and Vice- President Joyce Mujuru of looting the diamonds at Marange.
An Australian court recently showed that he was not clean either when it declared him bankrupt because he had not paid taxes estimated at over A$1 million.
In a statement to shareholders on October 29, in response to the Australian court case, Cranswick said: “The petition which resulted in the sequestration order was founded on an Australian tax assessment premised upon tax residency in Australia which I strongly deny. Furthermore I never personally received notice of the petition and only became aware of it after the hearing at which the sequestration order was made had taken place.”
Judgments on the case obtained by The Insider, however, show that the judge had decided to go ahead with the case after ruling on 18 August 2010 that Cranswick had adequately been served the papers by:
- leaving a copy of the Documents and a copy of the Court’s orders in an envelope addressed to the Respondent at the address, 7A Swan Road, Attadale WA 6156 (“the 7A Swan Road property”);
- sending a copy of the Documents and a copy of the Court’s orders by pre-paid post addressed to the Respondent at the 7A Swan Road property;
- sending a copy of the Documents and a copy of the Court’s orders by pre-paid post addressed to the Respondent at Peter Lark & Co., PO Box 518 West Perth WA 6872;
The property at 7A Swan Road was bought by Cranswick’s wife on 23 March 2006 but in an interview with Australian tax officers in April last year Cranswick said he and his wife owned the property although it was in his wife’s name. Peter Lark was his lawyer.
In his judgment on 27 October 2010, Judge Neil McKerracher said there was ample evidence to show that Cranswick had represented himself as an Australian resident and citizen several times.
He said Cranswick travelled in and out of Australia on 58 occasions between 1 July 2004 and 9 December 2008. On the 28 occasions that he arrived in Australia, he declared that he was a resident returning to Australia. He also declared 29 times when he left Australia that he was a resident temporarily leaving on business.
Cranswick also sat and successfully completed an Australian citizenship test on 21 February 2008, the judge said.
In an interview with Australian tax officers Cranswick said though he considered himself a resident of Zimbabwe he had not paid any taxes.
He had lodged some non-resident income tax returns for the income tax years 30 June 2005 to 30 June 2008 in the United Kingdom reporting about 10 percent of his gross income.
According to the ACR annual report for the year ending March 2010, Cranswick earned a total of US$ 122 732.
ACR has not earned a single cent since its listing in June 2006 according to its financial reports but has been surviving on floatations on the stock exchange. It had cash resources of US$15.4 million at the end of the financial year.