Government partner marks $45m fraud scandal in Ghana – Newsday Zimbabwe

Pipeline plan from Beira in Mozambique to Zimbabwe

A South African businessman partnering with the Zimbabwean government for a pipeline plan from Beira in Mozambique to Zimbabwe has been linked to a $45 million fraud scandal in Ghana.

A latest investigative report by The Sentry published yesterday revealed corruption concerns surrounding the infrastructure deal in Zimbabwe, with links to a UK bank and South African pension funds.

New research by The Sentry has uncovered South African businessman Errol Gregor’s involvement in a multibillion-dollar oil pipeline project between Mozambique and Zimbabwe.

The Sentry is a research and policy organization that seeks to disable predatory multinational networks that profit from violent conflict, repression and kleptocracy.

According to the report, Gregor, previously linked to an alleged $45 million fraud scandal in Ghana, is now leading a plan to build a second pipeline connecting Mozambique’s Beira port to Harare.

“The involvement of a figure like Gregor in such an important government project should give one pause,” said Nick Donovan, senior researcher at The Sentry.

“This case highlights the need for more transparency, rigorous oversight and active international anti-corruption efforts when it comes to infrastructure development involving countries plagued by predatory business operators and entrenched kleptocracy.

“The fact that a UK bank and South African pension fund may have inadvertently supported a potential multi-billion dollar bribery scheme adds to the urgency. This should be a wake-up call for due diligence more aggressive and, where appropriate, forceful responsibility”.

The report said Gregor’s story included suspicious payments authorized during a 2016 bid to control a vital oil facility connected to the Tema oil refinery in Ghana.

The report said Gregor, through his former company Mining Oil and Gas Services (MOGS), allegedly funneled millions to various third parties through Edwin Obiri, a Ghanaian deal broker, raising red flags for possible bribery and corruption.

It also alleged that some funds may have gone to high-ranking political figures, including the opposition party Ghana’s National Democratic Congress.

“Despite ongoing legal proceedings in South Africa relating to his previous businesses, Gregor is pushing ahead with plans to establish a multibillion-dollar pipeline through his new company, Coven Energy.”

The pipeline aims to position Zimbabwe as a regional fuel distribution hub, but the report says its progress raises questions about transparency, due diligence and the role of potentially corrupt actors in Zimbabwe’s infrastructure projects.

In response to questions submitted prior to the publication of The Sentry report, Obiri denied wrongdoing, while Gregor did not respond.

In its findings of the selected report, The Sentry pointed to suspicious payments made in Ghana, where Gregor allegedly led a bid for control of an offshore oil rig in 2016, during which he authorized more than $18 million in questionable payments.

“These payments, allegedly channeled through Obiri, led to concerns about bribery of auditors and a fraud suit.

“Some of the payments went to Kingsley Kwame Awuah Darko, the public servant who awarded the tender to Gregor’s MOGS company,” the report said.

The Sentry also noted the involvement of British banks and South African pension funds, revealing that funding for Gregor’s previous deals in Ghana involved loans from the UK’s Standard Chartered Bank and funds linked to South African pensioners through the Public Investment Corporation.

“These institutions may have inadvertently become involved in the fraudulent transactions uncovered by The Sentry’s investigation,” he said.

The report said that despite Gregor’s involvement in the Ghana fraud scandal, his company Coven Energy is now pushing ahead with plans for a new gas pipeline between Mozambique and Zimbabwe.

“The Sentry investigation raises concerns about the lack of transparency and the risk of corruption in this infrastructure project,” he said.

The Sentry also recommended that the governments of Zimbabwe and Mozambique commission an independent feasibility study on the proposed pipeline project.

“Furthermore, The Sentry urges improved transparency measures and public scrutiny of infrastructure projects, including open bidding processes and public disclosure of contracts and beneficial ownership.

“The money for the Ghana Petroleum Facility, GPMS, came from South African pensioners and taxpayers and the UK’s Standard Chartered Bank.

“Consequently, law enforcement agencies in the three relevant jurisdictions (the UK, Ghana and South Africa) should investigate the purchase of GPMS by MOGS, with a focus on identifying the recipients of the funds paid by Obiri, to find out whether those receiving money were doing so on behalf of public officials, meaning the payments had therefore potentially breached anti-bribery laws,” the report said.

He also added that the government should consider a “fit and proper person” test for companies involved in key infrastructure projects, similar to requirements in the banking sector.

“As part of the process of applying for or renewing an investment licence, the Zimbabwe Investment and Development Agency may assess the probity of any person with civil judgments against them, previous criminal convictions and/or significant adverse,” The Sentry said.

Energy and Power Development Minister Edgar Moyo yesterday expressed ignorance on the matter, including the government partner.

“This is the first time I’m hearing about it. Perhaps, on issues of the pipeline and petroleum products infrastructure, talk to the National Petroleum Infrastructure Company (NOIC) or Mutapa Investments.

“For us, as a ministry, we have a stable political leadership and I have no knowledge of it. I know there have been talks about a second pipeline and feasibility studies are being done, NOIC and Companhia do Pipeline Moçambique-Zimbabwe are in talks, but I don’t have much knowledge about it,” he said.

NOIC said he needed to study the report and come back with an appropriate response.

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