The Deceivers

Phil Edmonds has had two careers: first as a sportsman, then as a mining baron—both built on spin.

“Edmonds is constantly trying to persuade a batsman to expect one kind of delivery and then confound him with another,” wrote Simon Barnes of the cricketer’s slow left-arm bowling in a 1986 authorised biography. “It is a game like paper-scissors-stone, a matter of bluff and counter-bluff.”

Sporting guile was never quite enough for Edmonds and even in his playing days he could be overheard negotiating property deals on the Lord’s dressing room payphone. Business deals gave him the same buzz as cricket, he told a BBC radio interviewer the same year. Asked what one thing he would take to a desert island, he opted for a humidor packed with “the most magnificent handmade cigars in the world”.

To pay for his cigars—and much besides—Edmonds deployed his spinner’s arts in business. Quickly he learned that to make money in mining, you didn’t need profitable mining operations—just investors.

In partnership with Andrew Groves he listed nine companies on AIM, a junior market set up by the London Stock Exchange in 1995 to allow smaller companies to raise funds (see box below). Almost always, Edmonds-Groves companies made huge losses. That scarcely mattered: with investors focused on short-term movements in the stock, they talked up share prices and siphoned off the cash.

‘Management fees’

When it came to convincing big investors to buy in, Edmonds was key. London’s Square Mile was full of cricket fans eager for a chat with the former England star and with his move to the City, the spin bowler drifted effortlessly from one bastion of the British establishment to another.

“Through cricket I have had so many opportunities to travel and make powerful contacts,” he told his biographer, explaining that he would usually wear a cricket blazer to meetings in the City. “It helps to break the ice.”

As Edmonds and Groves learned to navigate the City, they developed a repertoire of techniques for bleeding their stock market ventures. Clever lawyers, offshore secrecy havens and the AIM market’s almost total lack of regulation helped them get away with it.

Some of the tactics were perfectly legal. They paid themselves substantial salaries—more than $10 million in wages from 2002 to 2015. In 2014 they took home over $1.3 million between them, while the four of their companies trading on AIM at the time lost more than $60 million combined.

Next came the service charges. Between 2010 and 2015, Edmonds and Groves’ AIM-listed companies paid more than $5 million dollars in “management fees” to Ocelot Investment Group — a company “controlled by Andrew Groves”, according to stock exchange filings. Like the salaries, the fees were legal. That didn’t make them a good deal for investors.

“You think this will fly with the shareholders?!” Vivek Solanki, their partner in African Medical Investments, wrote to the duo in April 2010 when he found out that management charges had all but wiped out the year’s profit. “This is going to look ridiculous.”

Then there was the rent. Edmonds and Groves have said they earn nothing from their headquarters building at 18 Park Street in London’s exclusive Mayfair district. They get a rental income from the property— £345,000 in 2008—but say they pass the full amount on to the building’s ultimate owner, Mirabella Properties Ltd, registered in the British Virgin Islands.

The limited documentation on Mirabella suggests its ultimate owners are Edmonds and Groves themselves: 18 Park Street was used as security on a loan from Butterfield Bank—the same bank used by at least one of Edmonds and Groves’ AIM-listed companies. The managing agent for the property, Cyril Leonard, also looked after Edmonds’ family home in Notting Hill.

There was also Ely Place Nominees. Between 2002 and 2010, the tiny company owned by the duo’s lawyer quietly sold off shares in their listed companies worth more than £200 million. It’s not clear where the money went—but there is evidence to link Ely Place with Edmonds and Groves.

Ely Place has had many clients and “on rare occasions the beneficiaries of sales may have been Mr Edmonds and/or Mr Groves”, their lawyer Philip Enoch wrote to Global Witness.

Cash shells

As the pair launched company after company, a pattern emerged. Their businesses almost always began as ‘cash shells’—empty corporate vehicles floated on the AIM exchange that can later be filled with assets.

Cash shells can be a legitimate way for companies with meagre resources to raise money for acquisitions. Shareholders who fund them aren’t investing in a specific project so much as betting on the owners’ reputation and ability to generate a return. For Edmonds and Groves, it was an opportunity to drain funds from investors.

The duo listed seven shells on AIM between 2002 and 2013. Each time, they said the newly listed company was on the look-out for profitable businesses to buy.

That wasn’t the whole truth. Telling the markets they were looking for investments that made sense in purely economic terms, they were also lining up sweetheart deals with friends and cronies.

Central African Gold agreed it first acquisition less than two months after its 2004 listing, signing a deal to buy Golden Tau Mining, a small firm eyeing gold mines in Botswana. “We listed on AIM in April and raised funds specifically for the purpose of securing acquisitions in this area,” Central African Gold director Roy Pitchford said in a stock exchange filing—omitting to tell the market that one of Golden Tau’s founding directors was Pitchford himself.

Deals for friends

African Medical did its first—and only—major deal with Vivek Solanki, Edmonds and Groves’ personal physician. And African Oilfield Logistics’ first investment, six weeks after listing, was in a firm run by Michael Pelham, a director of Edmonds and Groves’ South Sudan oil company, White Nile, and its successor, Agriterra.

BioEnergy Africa—later renamed Sable Mining—also struck its first deal close to home. It bought a Mozambican sugar cane company, ProCana, two weeks before listing in 2008. The sellers included Edmonds and Groves’ AIM-listed Camec and African Medical director Corne Holtzhausen was already a shareholder.

It isn’t illegal to do deals with friends. But at African Medical, it was just this type of cosy arrangement that was used to rip off shareholders: more than the rent, the management fees and the cronyism, it was secret insider deals that were bleeding away investors’ funds.

Lucrative swindle

Again and again, Edmonds and Groves used shareholders’ money to buy assets—a building in Mozambique, a hospital business in Zimbabwe or a jet aircraft—by acquiring shadowy shell companies in offshore havens like Mauritius and the British Virgin Islands.

Hiding behind corporate secrecy, they sold assets they already controlled to their own AIM-listed companies at inflated prices. They never declared their secret ownership—and ordinary investors had no way of knowing that the duo were on both sides of the deal.

It was a lucrative swindle. The Mozambique property deal alone netted Edmonds and Groves’ family trusts more than a million dollars each in cash and shares. The hospitals transaction was designed to cream off shares worth $1.2 million—and it looks like Groves got at least $1.2 million more from the jet.

And those are just the ones we know about. Global Witness has found five other transactions that have the signs of insider transactions (see Chapter Five: The Heist). Secrecy havens and the market’s relaxed regulations made it easy for Edmonds and Groves to conceal their interests and fleece their listed companies with impunity.

At AIM-listed African Medical, Edmonds and Groves’ fees and schemes were crippling what should have been a profitable enterprise. The biggest investor, Harbinger Capital, had a seat on the company’s board during one of the scams. It put $38 million into African Medical. Why didn’t it raise the alarm?

Part of the explanation could be that Harbinger—a hedge fund run by billionaire Philip Falcone, who in 2013 paid $18 million to settle fraud charges in the US—was also pumping $58 million into another Edmonds-Groves company, Sable Mining. With so much at stake, Harbinger may not have wanted to rock the boat. But why didn’t the authorities notice?

‘A front and an affront’

Maybe because no one was looking. AIM is so lightly policed that it’s sometimes known as the “unregulated stock market”. The UK Listing Authority, which monitors the main exchange, has no jurisdiction there.

AIM Regulation, the exchange’s oversight body, isn’t independent either: it's controlled by AIM’s owners, the privately run London Stock Exchange Group. And in a glaring conflict of interest, the lawyers, stockbrokers and banks that earn fees from companies they bring to market—known as nominated advisers, or Nomads—are entrusted with the role of watchdogs.

The result has been scandal after scandal. AIM Regulation “is just a sham designed to lure investors into a false belief that the LSE’s junior market is policed”, wrote Nigel Somerville, a commentator at the finance website Share Prophets, in August 2015. “It is a front, and an affront.”

Of course, not all of Edmonds and Groves’ corrupt deals were sophisticated market scams. In Liberia, they advanced their business with old-fashioned bribery.

When Sable Mining arrived in Liberia in early 2010, almost all of the country’s most valuable iron ore fields had already been parcelled out. Just one prize asset remained. Andrew Groves was prepared to do anything to get it.

“Groves became obsessed with Wologizi Mountain,” an unmined range thought to contain a billion tonnes of ore, said one former colleague. In his quest for mineral riches, Groves turned to Varney Sherman, Liberia’s best-connected lawyer.

Sherman works out of a two-storey pink villa in downtown Monrovia between the Royal Grand Hotel favoured by international corporations, and Vicky’s Fingers café, where locals eat chargrilled fish and plantain on the street. During 2010, Sable executives shared his offices as they drew up their battle plan for Wologizi.

One obstacle stood in their way. Wologizi had been earmarked for public tender—and in an open auction a smaller company like Sable might easily find itself outbid. But Sherman had a plan: if he could engineer a change in the law, they could circumvent the process. It would mean bribing a lot of people. He drew up a list, according to a source with knowledge of the company, and Sable’s London attorneys started transferring the cash.

By August 2010 Sable had paid out more than $200,000 earmarked for some of the most powerful people in Liberia: the speakers of both houses of parliament, senators, ministerial aides and at least one minister. The payments are listed in a cache of documents leaked to Global Witness, including a spreadsheet from Sherman’s law firm listing many of the biggest sums. Alongside the bribes, thousands more went on entertaining the president’s son, the documents show.

“If your allegations are correct, none of these actions were carried out with the knowledge of the board,” Edmonds and Groves told Global Witness in a letter—though the documents show that the bribe spreadsheet was emailed directly to board member and chief executive Andrew Groves.

Sable said it conducts its business “in a responsible and ethical manner”. It said it had conducted a review into the payments in 2011. No evidence implicating the board was found, it said, and financial controls were tightened as a result. The payments were made by Delta Mining, in which Sable had only a minority interest, the company said. But by the time the bribe payments started Sable had already signed agreements to take control of the company, and the payments came from Sable’s account not Delta’s, the spreadsheet shows.

Sherman said by telephone that he had made payments on behalf of Sable but couldn’t comment because they were confidential.

For the Liberian lawyer, it was more than just a job for a client: he had ambitions of his own. Sable paid hundreds of thousands of dollars to fund the convention that saw him elected chairman of the ruling party. Another donation helped him push out a party rival. In the end, Groves’ bribe-fuelled obsession would come to nothing. But Sherman would be sitting pretty.

‘A national cancer’

“Corruption is a national cancer that creates hostility, distrust, and anger,” President Ellen Johnson Sirleaf said when she became Liberian president in 2005, pledging a war on graft to resurrect a nation destroyed by 14 years of civil war.

No one seems to have told Edmonds and Groves. Their London-listed company Sable got into Liberia in early 2010 with its deal to buy into South Africa’s Delta Mining . The purchase was backed by more than £60 million in cash from US hedge funds and investment banks, over half of it from Philip Falcone’s Harbinger Capital.

Delta had a controversial history in Liberia. In 2008, it had missed out on one of Liberia’s biggest iron ore concessions, the Western Cluster, after its winning bid was disqualified amid bribery allegations. But in a closed-door meeting at the presidential mansion, Delta had struck a deal with the government. Officially cleared of corruption, Delta and its new shareholder Sable were now convinced that they could get Wologizi instead.

Big miners like Australia’s BHP Billiton had already done early work at Wologizi, widely considered the country’s richest unattributed iron ore concession, though they had never got beyond the exploration stage. Now, with commodity prices at record levels, it was bound to be snapped up. Sable shouldn’t risk bidding in an open tender, Sherman told them.

Fortunately for Edmonds and Groves, a new Public Procurement and Concessions Act was on its way through parliament. By bribing the right people Sable could get a loophole inserted allowing it to win the mountain without a tender, said Sherman, according to a person familiar with the scheme. The spreadsheet, listing outflows from Sable’s client account with his law firm Sherman & Sherman, give details of the pay-offs.

‘Payment (facilitation) revised PPCC Act’ is the label for one transfer of $75,000, a transaction marked in other leaked documents as ‘Consulting fees—A Tyler’. Alex Tyler, speaker of Liberia’s House of Representatives at the time, helped to get the Sable-friendly legislation through parliament.

Other outlays on Sherman’s bribe sheet included:

The bribe payments, corroborated by internal financial records also seen by Global Witness, were transferred to Sherman by Sable’s London law firm Salans. Sable’s internal records list the outlays as “consultancy fees”, as with the $75,000 payment to Tyler.

Another $20,000 went to the Invincible Eleven, a football club where Tolbert was president. And a separate document shows half a million dollars in payments to ‘Bigboy 01’ and ‘Bigboy 02’—whose identity Global Witness was unable to establish.

Contacted by Global Witness, Tolbert and Belleh denied taking bribes from Sable. Tolbert acknowledged accepting payments to the football team. Saytumah and Tyler did not respond to letters hand-delivered to their offices. Sable’s lawyer, Philip Enoch, said Salans was acting on the company’s instructions when it transferred the funds to Sherman's law firm and had no reason to question the payments.

Sable’s lawyer, Enoch, said Salans was acting on the company’s instructions when it transferred the funds to Sherman's law firm and had no reason to question the payments.

By August 2010, when Sherman emailed the spreadsheet to Groves, Sable’s Wologizi gambit was at a critical juncture: the Public Procurement Act was close to being made law and it looked as if months of painstakingly targeted bribery were about to pay off.

“We finally got the Revised PPCC Act completed,” Belleh wrote to Sherman on 6 August 2010. “The Minister of Justice and I met with the President last night and reviewed areas of concern to her. She approved. The document has been forwarded to the National Legislature. It is expected to be fast-tracked.”

“This is good news,” wrote Sherman, forwarding Belleh’s email to Sable.

‘You will be milked like a cow’

There were hiccups, though. On 7 August, the head of Sable’s Liberian operation, Heine van Niekerk, emailed Sherman with news of a worrying phone call. It seemed Tyler was unhappy with his $75,000 payment: the Speaker had rung to say that getting the Act through the senate would cost “about US$250,000”, van Niekerk told the lawyer.

Sherman was alarmed that Sable might over-bribe.

“Heine, don’t do that please!” he replied that evening. “You will be milked like a cow.”

Liberia’s new Procurement Act passed on 16 September 2010, complete with the new provisions Sable wanted. Article 75 allowed the mining minister to declare a mining concession as a “non-bidding area”—that is, one that could be handed out without a tender.

Meanwhile, Sable’s money was doing more than just changing the law. Also on Sherman’s spreadsheet are payments with little obvious connection to Sable and Delta—and much more to do with the bagman’s personal aspirations within the ruling Unity Party.

A $200,000 payout from Sable’s funds labelled ‘political contribution—UP convention’ is dated 22 April 2010—less than three weeks before a Unity Party conference where Sherman was elected chairman unopposed after his opponents “were persuaded to back off”, according to a local newspaper.

Party games

Sable’s cash was also there to fix things when they went wrong. At the same convention, Unity Party members elected Henry Fahnbulleh as Secretary General—not the result Sherman wanted. He publicly demanded Fahnbulleh’s resignation.

“I have no intention of stepping down,” Fahnbulleh told the press. “The principle is wrong and I am willing to die.”

On 24 June 2010, a payment of $25,000 left Sable’s account with Sherman & Sherman. It was labelled ‘Political contribution—UP Secretary General resignation’. Fahnbulleh quit the next day.

In an August 2015 interview in Monrovia, Fahnbulleh told Global Witness how he suddenly came under huge pressure from traditional elders to step down. “Don’t fight your big brother,” they told him.

Elsewhere, Sable was pursuing more friends in high places. In 2011, it spent thousands of dollars entertaining Fombah Sirleaf, the president’s stepson and Liberia’s chief of intelligence. Sable executive Heine van Niekerk took him on an all-expenses-paid hunting trip to South Africa and kitted him out with gear. They shot four animals, including a gnu, and Sable paid to have them stuffed, tax invoices show.

Sable later bought Sirleaf a phone and on 12 May 2011 spent $1,070.87 on him at Twin Bore Agencies, a Johannesburg gun shop. There is no evidence that Sirleaf provided Sable with any favours, though he was clearly a useful person to know. Van Niekerk declined to comment for this report.

False promises

Liberia’s procurement act was changed as planned. But did Edmonds and Groves get what they wanted? The biggest prize, Wologizi, remained tantalizingly out of reach.

“It seems certain people high up in Liberia had promised it to various parties from different countries and had not cross-checked,” says one person familiar with the scramble for Liberian iron ore concessions at the time.

Responding to Global Witness, the Liberian government said it will “spare no efforts in getting to the bottom of the issue and bring to justice anyone found culpable”.

Instead of Wologizi, Sable had to make do with three smaller licences—Timbo, Bopolu and Kpo—and on the London market where Sable’s shares were traded, Groves did his best to talk up the assets. But all three turned out to be practically worthless.

That didn’t mean Sable’s efforts were wasted. By 2012 the firm was touting a new iron asset on London’s Alternative Investment Market—Mount Nimba, just across the Liberian border in Guinea.

Nimba helped bring fresh investment, including from Credit Suisse and JP Morgan Chase & Co in the US. But Sable and its backers knew that the project was unviable without permission to export ore through Liberia—something that some of Sable’s larger competitors had tried, and failed, to procure.

In January 2015, the Liberian government signed the export permit. In London, Sable shares went through the roof.

It was mid-2009 when African Medical Investments announced the acquisition of a tiny Mozambican firm “whose sole asset is a substantial sea view property located in the exclusive Polana district of Maputo”. It was the start of a three million dollar scam.

African Medical, the latest in a string of Edmonds-Groves stock market ventures, had already raised £5 million by listing on London’s AIM exchange. People who bought the shares may have thought the company was using their money to develop private clinics in Africa. Leaked emails suggest that profits were flowing straight into the pockets of Edmonds and Groves.

Edmonds and Groves had known Vivek Solanki, a Zimbabwean trauma surgeon with a talent for building private clinics, for years as patients. They made him a proposition: with his experience and their network, they said, they could build hospitals all over Africa. By September 2009, African Medical had branches in South Africa, Zimbabwe and Tanzania, and was ready to expand again, this time in Mozambique.

When African Medical bought the company that owned the site in Maputo, it was really buying from Edmonds and Groves themselves, the documents show. Such transactions should, by law, be publicly disclosed. But that would have meant revealing the heist on shareholders. Instead they found a loophole that let them use offshore trusts to get around the law.

“The transaction was an elaborate and deceitful fraud,” wrote Peter Botha, African Medical’s current chief executive, in a May 2013 sworn statement. Edmonds and Groves told Global Witness that it was legal and “in the best interests of shareholders”.

The Maputo deal wasn’t a one-off. Evidence uncovered by Global Witness suggests Edmonds and Groves repeated the ploy time and again. London’s notoriously under-regulated AIM exchange, secrecy havens like the British Virgin Islands and the services of a top international lawyer helped them do it.

This is how it worked.

‘Insider job’

African Medical didn’t buy the land for its new Trauma Centre and Well Woman Clinic in Maputo directly. Instead it bought a local company that owned it, EMP Services Limitada. The seller of EMP Services was Penrith Management Trading, registered anonymously in the British Virgin Islands. Leaked documents show how all three companies in the chain were connected to Edmonds and Groves.

First, their associates set up EMP as a local front company to buy the site. Shortly after, the associates transferred their shares to BVI company Penrith—secretly run by Edmonds, Groves and Solanki. Using the British Virgin Islands’ anonymity rules to mask their identity, Penrith then sold EMP on to African Medical at a massively overblown price.

Land plot

EMP originally bought the property in October 2008 for just $2.2 million, the documents show. By the time Penrith sold EMP to African Medical less than a year later, that price had been marked up to $5.5 million, paid to Penrith in cash and shares.

African Medical’s investors, whose money funded the deal, had no way of knowing that Penrith already belonged to Edmonds, Groves and Solanki—and that they were the victims of a three-million-dollar rip-off.

A leaked November 2008 email from African Medical’s manager in Mozambique reveals who secretly controlled Penrith: when he needed Penrith to make a payment, he addressed his request to Solanki, Edmonds and Groves.

“I’ve had a discussion with Andrew and Phil,” the manager wrote. “We have to make the first payment immediately.”

“Penrith is a company owned by Groves, Edmonds and myself,” Solanki wrote in June 2012 in another email seen by Global Witness. “EMP is also owned by Groves and Edmonds. This was a complete insider job.” Even EMP’s name was a giveaway, Solanki told Global Witness in an interview: it’s a reversal of the initials of Philip Maurice Enoch—Edmonds and Groves’ longstanding lawyer, who incorporated Penrith.

“I will sort out the BVI company,” Enoch wrote to Solanki on 19 November 2008.

When The Times raised concerns about the Maputo deal in December 2014, a spokesman for Edmonds and Groves “declined to identify the ultimate owners of Penrith”. Any link between EMP Services and African Medical’s managers could “prove discomforting for retail investors”, the UK newspaper said.

Pressed by Global Witness, Edmonds and Groves admitted ties to Penrith. But they and their lawyer said the deal wasn’t against the rules because Penrith was owned by family trusts for the benefit of their relatives.

Under market rules, “related parties” who do deals with each other need to declare them. But the definition of a related party varies. The International Accounting Standards that Edmonds and Groves’ companies claim to follow define close members of a director’s family as any relative who “may be expected to influence, or be influenced by, that person”.

AIM’s version, meanwhile, is so narrow that it only stretches to a director’s children and spouse. Uncles, aunts, cousins and even siblings don’t count. It’s a useful ambiguity that Edmonds and Groves say kept their deals legal. They declined to tell Global Witness which relatives benefited from the trusts but said they do not fall within the definition of related parties.

Whatever the exact family relationship, duping shareholders to skim off profits would still constitute “powerful grounds for suspicion that a fraud has been committed”, a top international law firm told Global Witness.

‘Family trusts’

Edmonds and Groves offered an explanation for the land deal. “Non-related family trust entities were already in the process of acquiring a property for themselves” when African Medical was independently seeking a site for its Maputo hospital. “They agreed to hold the property for African Medical until it was in a position to proceed to occupy and rent the property for hospital purposes.” According to this explanation, it was just a fortunate coincidence that the Edmonds, Groves and Solanki families combined to buy a property exactly where and when African Medical needed one. When African Medical bought it just nine months later, the site had more than doubled in value and the company paid a fair price, Edmonds and Groves said.

But Global Witness spoke to three Maputo real estate brokers who all said there was no way prices could have leapt 160 per cent in just nine months. The highest estimate for the change in the period was 20 per cent; one broker said prices barely changed. And from the leaked e-mails, it’s clear that the family trusts were no more than camouflage: the deal was a three-way split between Solanki, Edmonds and Groves from the outset.

“Could you please confirm the name of the company that sold the Maputo land and share allocation thereof (I have one third of this)?” Solanki wrote to Enoch, Edmonds and Groves’ lawyer, on 19 May 2010. Solanki told Global Witness that he only got back what he put into the deal in cash, and that he never received the shares that should have been paid out to him.

To the regulators, Penrith’s true ownership didn’t matter. No one was checking—and even if they had, the offshore smokescreen made it almost impossible to find out. The losers were African Medical’s investors, conned into buying an asset for more than twice what it was worth.

Plane secrecy

In 2010 Philip Enoch helped African Medical with another purchase—a jet aircraft for use as an ambulance. It was the Mozambique property scheme all over again, say Solanki and Botha, the former and current African Medical chief executives. Andrew Groves fleeced African Medical’s shareholders by selling the London-listed company an asset at an inflated price and siphoning off the difference, they say.

“This was an Andrew deal,” Solanki, who was dismissed from African Medical after a dispute with Edmonds and Groves, told Global Witness. “In those days he would confide in me, tell me, because he liked to show off how he managed to get deals.”

African Medical paid $3.1 million for the plane, a Dassault Falcon 20, in 2010 —even though a leaked email from the company’s accountant suggests the real value was far less.

“I have included a spreadsheet on the Falcon 20,” the accountant, John Raath, wrote to Groves and Solanki on 27 April 2009. The calculations are “based on a $1.875 million purchase price”.

As with the Maputo property deal, it looks like the over-valued asset being sold to African Medical already belonged to Andrew Groves.

Research by Global Witness shows how before the sale the aircraft passed through a string of opaque companies all connected with Groves. In 2006 it was owned successively by two companies, Roston Aviation in Delaware and Gough Aviation in South Africa. The sole director of both was Groves’ pilot, Roston Gough Smith. Gough Aviation belonged to Camec, listed on AIM by Edmonds and Groves.

When they sold Camec in 2009, the jet was hived off to a South African-registered firm, Caramix, itself owned by a secretive British Virgin Islands firm. It was Caramix—where Roston Smith was again a director—that sold the Falcon to African Medical.

‘No, no, no’

Solanki, who is still fighting his former employers in court, says the plane belonged to Groves; another African Medical insider, who spoke on condition of anonymity, said the same. So did Peter Botha, in a signed affidavit handed to the UK’s Serious Fraud Office as part of a dossier of fraud allegations. African Medical left AIM in early 2014 and is now being wound down.

Groves didn’t answer questions from Global Witness about the jet. Enoch said he had assisted in the purchase of the aircraft and had “no reason to believe that this constituted a ‘related party transaction’”. The deal was later cleared by law firm Baker & McKenzie, he added. An SFO spokeswoman said it was the organisation’s policy neither to confirm nor deny if an investigation was in progress.

Groves scooped at least $1.2 million on the deal—and $200,000 more when he even got a tax rebate, the documents suggest. To people on the inside the scam should have been obvious. But it seems not everyone cared. US hedge fund Harbinger Capital, the biggest shareholder at the time had a seat on African Medical’s board.

By the time the directors met to vote on the deal, the price had been jacked up from $1.9 million to $3.1 million, “supported by a valuation which Andrew has obtained”, according to a 25 February 2010 email from Enoch to Solanki.

“No, no, no, that’s not agreed,” Solanki recalls saying at the board meeting.

But everyone else backed the deal—including the man from Harbinger.

“Harbinger is not aware of any fraud in connection with the jet purchase,” a spokesman said.

Offshore secrets

It wasn’t just the Mozambique property and the jet. There’s evidence that Edmonds and Groves pulled the same scam over and over. Global Witness has identified five more deals in which their listed companies bought assets from Caribbean shell companies—all with the same address as Penrith, the front for the Maputo fraud. It’s a remarkable coincidence.

The assets are seemingly unrelated—a tin venture in Namibia, a platinum one in South Africa, farmland in Sierra Leone—and on the face of it, there was nothing to connect them with Edmonds and Groves; yet every one of the sellers was registered at the same address in the British Virgin Islands.

That’s because they were all incorporated by Nerine Trust, a company services provider that has a long relationship with Edmonds and Groves. Nerine created three companies—Ashendon, Eglinton Management, and Eriswell—that stock market filings show are controlled by trusts for the benefit of Edmonds and Groves’ relatives. There were some 120 service providers in the BVI—yet wherever the duo did business it was Nerine that incorporated the anonymously owned company on the other side of the deal.

It’s a clue that Edmonds and Groves may have taken the scam well beyond the deals for the Maputo property and the jet, routinely selling firms they secretly controlled to their listed companies in London and skimming off investors’ cash.

And it was Enoch, a partner at the international law firm Salans, who helped arrange the deals. He and a secretive company he owned, Ely Place Nominees, were central to another Edmonds and Groves insider scam—one engineered to earn them a $1.2 million kickback.

As Sailor van Schalkwyk approached the target, he realised normal surveillance tactics would not suffice. The high-walled property in Johannesburg’s affluent Inanda district was closely guarded. Beating a quick retreat to Rosebank a few minutes across town, he secured the services of a street prostitute. While she kept the guard busy, van Schalkwyk slipped quietly past to complete his reconnaissance.

Albertus “Sailor” Van Schalkwyk, whose version of events comes from a sworn affidavit, is not someone you would like to meet alone on a dark night. Reportedly a veteran of apartheid South Africa’s Koevoet torture squad and once a mercenary in Iraq, he later did jail time for drug-smuggling in New Zealand. In 2011 he was with notorious Cape Town mobster Cyril Beeka on the morning he was shot. The following year he was working for new bosses: Phil Edmonds and Andrew Groves.

The duo had a problem that needed taking care of: a share dispute with another Sable Mining executive, Heine van Niekerk, had turned sour. There had been talks but he was not responding to their persuasion. On 23 February 2012, van Niekerk arrived at his Johannesburg office to find a man he had never seen before, Wayne Stoltz, announcing himself as Sable’s new head of security, with orders to escort him from the premises.

Like other enemies of Edmonds and Groves, van Niekerk would remember his first encounter with Stoltz. It was the start of an increasingly unpleasant relationship.

“Be afraid,” Stoltz told him later in a text message, van Niekerk claimed in a court submission. “Be very afraid.” Stoltz told Global Witness in a telephone interview that he does not recall sending the message.

For now, there was nothing for van Niekerk to do but go home. On Groves’ orders, Stoltz had removed the computer servers, effectively shutting down the office, and upstairs in the boardroom van Niekerk found a director firing the firm’s employees. Before leaving the building for the last time, van Niekerk made sure to grab the back-up servers, depositing them with the company’s lawyers for safekeeping.

Four days later, Stoltz emailed a photograph of van Niekerk to an intermediary, who forwarded it to Sailor van Schalkwyk, according to a court filing. The former mercenary filed it in a handwritten dossier headed “Target”.

‘A small, rectangular device’

Sable’s ties to van Niekerk went back to Liberia in 2010, when Edmonds and Groves had bought into his companies, Delta Mining and Southern Cross. Van Niekerk’s network in the country gave them access to top Liberian officials and he quickly became embroiled in Sable’s bribery. His contacts with South African intelligence chiefs helped Sable get close to Alpha Condé as he ran for the presidency in neighbouring Guinea.

Now Sable was on the verge of a deal to increase its holdings in van Niekerk’s firms. In January 2012, Edmonds summoned van Niekerk to a meeting at the Dorchester Hotel in London, where he “attempted to coerce me into accepting a substantially reduced price” for his Delta shares, van Niekerk said in written testimony for a South African lawsuit. It was a shareholder dispute that should have been settled in court. But for Edmonds and Groves, it was personal.

At 7am on 23 February 2012, a day after evicting van Niekerk, Stoltz was at the Intercontinental Hotel at Johannesburg’s OR Tambo Airport for an early briefing. Andrew Groves had just arrived on the overnight flight from London. It was a chance for Stoltz to introduce the boss to Sable’s newest recruit, Sailor van Schalkwyk.

“Groves told us that he wanted to destroy Heine van Niekerk, as he had destroyed others,” van Schalkwyk testified. In a disciplinary inquiry brought by Sable against van Niekerk, and later in a telephone interview, Stoltz confirmed that he worked for Edmonds and Groves and that he had recruited van Schalkwyk.

Van Schalkwyk had brought a friend to the meeting, Sakkie Morkel, a former agent at the Vlakplaas, the apartheid government’s paramilitary hit squad, named after the farm where it was based. “It was agreed that we would work with Stoltz, who will instruct us via Groves,” van Schalkwyk said. “Stoltz instructed us to keep surveillance on Heine van Niekerk at all times and report back to him.”

Talking to Global Witness, Stoltz said he attended the meeting with Groves at the InterContinental but didn’t recall bringing van Schalkwyk. Sakkie Morkel’s wife told Global Witness that he was in hospital and not available for interview. She confirmed that her husband and van Schalkwyk were old friends and that Morkel had been offered work by Stoltz, though she didn’t know if he accepted.

Days later—with the help of the Rosebank prostitute—van Schalkwyk was staking out van Niekerk’s high-security home. His breakthrough came a couple of weeks later: van Niekerk had put his house up for sale and was holding an open viewing. All van Schalkwyk’s team had to do was pose as prospective buyers.

It was on the afternoon of 26 March that van Niekerk’s wife stumbled across the strange little box.

“Sitting at my desk in the study, I found a small, rectangular black device with wiring and two metal antennas,” Kristin Keely Roberts, a US attorney, said in a sworn statement.

Roberts telephoned van Niekerk, who rushed home and searched the house. A similar box was attached to the underside of the bed in the master bedroom, he testified.

“The first show day was used to do inspection of the property in order to establish the best positions of the devices, which functioned via a cellular transmission signal,” van Schalkwyk said later in his affidavit. “The 'bugs' were installed during the second show day, a week later. I provided Stoltz with the numbers of all the bugs, which enabled him to listen to van Niekerk's conversations.”

Stealth software

Not long after the bugs appeared, the emails started. On 17 April, van Niekerk opened his inbox to find a message from Stoltz—apparently drafted by his personal assistant, Jacqueline Linnow (Stoltz’s wife, under her maiden name). The email contained an offer to step in and mediate with Groves. Attached was a draft letter suggesting a cash settlement.

But the attachment was suspiciously large—too large to open, in fact. Two hours later Linnow emailed again. “Hi Heine, It appears that the document is too big to be sent, here is a link to the document. Just click on it.”

It wasn’t until a year later that the real contents of the emails emerged. On 14 February 2013 van Niekerk received a visit from the police, accompanied by Sable computer expert Michael Theron. Something seemed amiss with the warrant, which didn’t seem to have been filed by the officer leading the search. That didn’t stop the police from confiscating his computer.

It took four days to get it back. Suspecting tampering, van Niekerk turned it over to forensic experts. On 4 March, Cyanre, a consultancy run by the former head of the South African Police Service’s computer crime unit, returned a report.

Buried inside Stoltz’s emails were hidden surveillance programs to record keystrokes, track websites visited, take screenshots, capture video from the webcam and steal passwords.

The author of the attachment that concealed the hacking files was “Wayne Stoltz” and it was last edited by Michael Theron, according to Cyanre’s report. The stealth software was configured to send the captured data to an email address in the name of ‘Wayne Stoltz’. One of the hacking emails was sent from the same address given to Global Witness by Stoltz in a 5 April 2016 interview.

“It’s totally out of the ordinary,” said Cyanré boss Danny Myburgh, whose firm helped police decrypt Oscar Pistorius’ telephone during the athlete’s 2014 trial for shooting his girlfriend. “We found details of a person’s name all programmed in the code.”

Global Witness asked Stoltz if he sent the hacking emails. “I doubt it is true, to the best of my knowledge,” he said. He denied any involvement in bugging van Niekerk’s house.

‘They want to finish you, brother’

Meanwhile, Stoltz and van Schalkwyk were reporting back to Groves at the Intercontinental, according to van Schalkwyk’s testimony.

“I showed him the initial visual recording which was made during the first show day,” van Schalkwyk said. “Groves appeared to be very pleased with the recording and bragged to a group of men from Guinea, in his presence, that this is what happens to people ‘who give me shit’.”

But the bugging wasn’t enough, van Schalkwyk said. “At a later stage, Stoltz requested me to get rid of van Niekerk.”

When Global Witness contacted van Schalkwyk, he declined to say exactly what that meant. And he never carried out the orders: he argued with Stoltz and instead of “getting rid” of his target, he called van Niekerk to tell him about the plot. Global Witness has seen a transcript of the conversation.

“Heine, let me tell you, they want to fucking finish you, brother,” van Schalkwyk says.

Both Sable and van Niekerk filed criminal charges against each other in South Africa—Sable for theft of its data; van Niekerk for conspiracy to commit murder. In both cases, authorities declined to prosecute.

Van Niekerk, who did not respond to Global Witness’s requests for comment, based his case partly on van Schalkwyk’s testimony. Stoltz says the state prosecutor saw the ex-mercenary as a questionable witness. He was certainly a questionable person for Sable to hire.

Men in dark glasses

Global Witness has interviewed others who fell out with Edmonds and Groves—and whose experiences were remarkably similar to van Niekerk’s. One agreed to meet only in the presence of armed security, only to cancel half an hour before the appointment . Four people said they feared for their lives.

That was how Ana Solanki felt in July 2010 when armed men ransacked her house.

It had all started that spring, when her husband, African Medical Investments chief executive Vivek Solanki, decided to query some odd-looking payments.

The business was flourishing. Clinics were up and running in South Africa, Zimbabwe and Tanzania and a new one was about to open in Mozambique (where Solanki was already mixed up in Edmonds and Groves’ corrupt property—see Chapter Five: The Heist). The Johannesburg and Harare branches had taken $645,000 in profit that year.

That changed when without warning African Medical was hit by a 96 per cent “management fee”—payable to a London firm run by Edmonds and Groves. The pair had agreed to buy the two clinics at a price based on their profits. Now the extra charges had all but wiped out their income: for two hospitals together, Edmonds and Groves were offering just $28,000.

“This is going to look ridiculous!!” wrote Solanki to the duo and their lawyer, Philip Enoch, on 21 April 2010. “The legal cost will be more than the fucking transaction.”

Soon after, Ana noticed she was being followed. When she left the house to take her 10-year-old daughter to school, white men in dark glasses would be waiting in a car outside, she said in an interview with Global Witness.

“I thought maybe I was becoming paranoid so I would change and go on some very funny routes and then they were still following me,” she said. “It was very obvious.”

It was all too much for Vivek Solanki and in July 2010 he quit African Medical after an anonymous caller told him he would “end up in a box” and that his family would be “raped by Angolans”, according to his resignation letter.

‘Armed invasion’

Days later, on 16 July, Ana and her sister were alone in the family’s Johannesburg home when eight armed policemen arrived without a warrant, pointed guns at her and ransacked the house. Like the police who seized van Niekerk’s computer, they were accompanied by employees of Edmonds and Groves: two men she recognised from African Medical Investments.

When the police failed to find what they were looking for, they shouted at her in Afrikaans, a language she doesn’t speak. One officer vented his frustration by kicking a gym ball into the swimming pool, she said in a signed affidavit seen by Global Witness.

“I was very frightened,” she said. “I started shivering and feeling weak from the shock of the armed invasion.”

By the time they left after three fruitless hours, the policemen and African Medical men were laughing together and slapping each other on the back.

A month later, a warrant for Vivek Solanki’s arrest was issued in South Africa (it was later cancelled) and African Medical commissioned reports by accountants Deloitte and PwC. A draft copy of PwC’s report seen by Global Witness says that Solanki creamed off hundreds of thousands of dollars from African Medical’s Zimbabwe business—allegations he denies.

‘Horror-scope’

Fearing for his life, Solanki left South Africa in August to hide out with Ana’s family in Serbia for ten months, later beginning a court battle to try to win back African Medical. Meanwhile, the threats continued:

“Your horror-scope for today is ‘sleep with one eye open’,” said one late-night text message from a Zimbabwean number the Solankis didn’t recognise, Ana told Global Witness.

Then Wayne Stoltz—the man who hired Sailor van Schalkwyk and sent the hacking emails to van Niekerk—started leaving messages on Ana’s Facebook page: “Yo Doc Solanki, your time in the cells are coming.” (Stoltz’s own Facebook timeline contains a catalogue of sexist jokes. He likes John Grisham novels and Hannibal Lecter.)

Ana complained to the police. In 2013 she received a reply. “We’ve got Wayne Stoltz, you have to come and identify him,” said an email from an officer at Kempton Park police station in Johannesburg, she recalls. Her husband flew in from Zimbabwe. Arriving at the station around 4pm, the Solankis were shown into an office and told to wait.

After some time, a door opened and Stoltz appeared. Instead of being given the chance to identify him, the Solankis themselves were locked up. They spent the night in the cells and were released the next morning.

“I drew him back to the country on the auspices of laying charges,” Stoltz told Global Witness, saying Groves hired him to investigate Solanki. “I didn’t let anyone know that we had a warrant of arrest for him.”

In a letter to Global Witness, Edmonds and Groves didn’t respond to allegations of hacking and bugging. Edmonds would “never countenance” intimidation, they said. They didn’t comment on Sable’s relationship with Stoltz or van Schalkwyk. It wouldn’t be appropriate to give weight to testimony from “disaffected parties, including any allegations of intimidation, as they clearly have questionable motives”, they said.

Heine van Niekerk eventually put his confrontation with Edmonds and Groves behind him, winning a case for wrongful dismissal and striking a deal with Sable to buy Delta Mining back.

For Ana Solanki, six years after the fight over African Medical began, the fear remains.

“I’m waiting for somebody to attack me,” she said. “I believe somebody will try to kill me and Vivek. I deeply believe in that.”