Harmony Chief in Offshore Mystery

Mystery last night surrounded a network of offshore bank accounts in the Isle of Man and Jersey that appear to be connected with Bernard Swanepoel, the chief executive of Harmony Gold, which is at the centre of a massive mining merger in South Africa.

The offshore accounts in his full name - Zacharias Bernardus Swanepoel - have been held by Barclays Bank in the Isle of Man, Guernsey and Jersey; Citibank in Jersey and the Isle of Man; and HSBC in the Isle of Man. They are attached to corresponding accounts in the Bahamas, Geneva and Paris according to papers seen by The Guardian.

Asked for an explanation for the accounts, a spokeswoman for Mr Swanepoel and Harmony confirmed that he did hold one offshore account and that was held "in line with all South African regulations".

She said the Harmony chief executive was unaware of any others but had asked his accountant to look into this. "He only has one account and he would welcome an investiga tion into this matter", said the Harmony spokeswoman.

Foreign offshore accounts are sensitive, because South Africa has tough foreign exchange laws, placing conditions on its citizens from moving funds abroad.

Many South Africans have negotiated an amnesty on funds held abroad but the existence of foreign accounts may raise eyebrows as Harmony's aggressive bid for Gold Fields is poised on a knife-edge.

Backed by Norilsk, the Russian-owned mining firm, and some of their own sharehold ers, Harmony effectively already owns 32% of Gold Fields.

It is believed that Harmony is preparing to increase its offer from 1.275 rand for every Gold Fields share. But last month Harmony announced lower revenues which has almost wiped out all its reserves.

The bid has provoked fierce controversy but the South African competition commission recently approved the merger.

The time-frame for the bid is open-ended and the company believes it can acquire the fur ther 18% stake to make up the required 50%.

South African residents have a long history of moving their assets and cash abroad. Many of them hesitated to repatriate their funds for fear of future political instability. But on February 28, 2003, the government agreed that if its citizens disclosed their accounts, they would receive an amnesty.

So far, South Africans who have declared their foreign accounts have either received a fine of 10% of the account balance or been allowed to repatriate their funds.

Papers show the Barclays account in Jersey was opened in February 2000, and both the signatory and the beneficiary is named as Zacharias Bernardus Swanepoel - the Harmony chief executive's full name. This is attached to other accounts in the Isle of Man, London, Bahamas and Switzerland.

The Citibank account in Jersey was opened in September 2002, and is attached to accounts in the Isle of Man, London, Switzerland and the Bahamas.

The Isle of Man account was opened in March 2002, and appears to have been used to transfer funds between banks. In September 2004, £5,000 was transferred from this account to one with Western Union.

The Swanepoel account with HSBC in the Isle of Man also appears to be used solely for the purpose of transferring funds between banks. In February 2004, £5,000 was transferred from this account to an account at the Bank of Butterfield Bahamas.

That same month another £5,000 was transferred from this account to a Western Union account.