Maravi

(STICKY) Inquiry recommends termination of Zamtel sale agreements

UPDATE: Check out this page on The Zambian Economist blog, and this footage from MuviTV. There was no evaluation of ZAMTEL by RP Capital Partners, the Zambian government paid more for it than it received, and they recommend banning RP Capital and Simmons and Simmons from ever doing business in Zambia again. They also recommend firing the entire RP Capital endorsed new management of ZAMTEL and reinstating the old board.

Inquiry recommends termination of Zamtel sale agreements
By Chibaula Silwamba and Chiwoyu Sinyangwe
Wed 23 Nov. 2011, 13:59 CAT

THE Sebastian Zulu-led commission of inquiry has recommended the termination of agreements relating to the sale of Zamtel's 75 per cent shares to LAP Green Network for US$257 million, according to a highly-placed government source.

But LAP Green says it will "work diligently to protect its interests" as the reversal of the sale of the country's sole total telecommunications provider beckons. And the commission of inquiry recommended that RP Capital must immediately be barred from conducting business in Zambia.

The Zambian government last year sold Zamtel's 75 per cent shares at US$257 million about K1.3 trillion to Libya's LAP Green Network but the former paid US$ 334 million about K1.7 trillion to retain its remaining 25 per cent shares in the telecommunication company during the privatisation.

The source said the commission of inquiry recommended the immediate termination of LAP Green-appointed and seconded directors and management to comply with the UN sanctions on the Libyan firm, among other reasons.

"Yes, the commission of inquiry recommended the immediate termination of all agreements relating to the sale of Zamtel to LAP Green and the immediate return of 100 per cent of Zamtel to Zambians. The reasons the commission has given for this recommendation is that LAP Green had failed all the three mandatory prequalification criteria rendering the transaction null and void," the source said.

"The other reason is that the price at which Zamtel was sold obviously showed that the company was grossly undervalued and the government paid more than it received from their sale. Actually, the commissioners indicated that the government paid LAP Green to receive a gift of 75 per cent of Zamtel."

The source said the commission had discovered that the Zambia Development Agency (ZDA) negotiating team was not independent as required by the law and did not negotiate in the best interest of Zambia.

The source said this resulted in Zambia receiving the same amount of money equivalent to the amount paid to a single consultant - RP Capital Advisors - for the sale of Zamtel.

"It also recommended the immediate reconstitution of the board of Zamtel and a thorough and comprehensive audit of the company for the period after privatisation," the source said.

"On RP Capital, the recommendation of the commission of inquiry was that a civil lawsuit be immediately instituted to recover the excess fees paid to RP Capital. It also recommended that RP Capital, its affiliates and employees must be immediately barred from conducting business in Zambia. It was also recommended that a civil lawsuit be immediately instituted against RP Capital and Simmons and Simmons for professional misconduct and negligence in qualifying LAP Green despite LAP Green's failing of all the three mandatory prequalification criteria."

The source said the commission of inquiry also recommended a review of all the legislative changes made to accommodate the Zamtel transaction at the expense of Zambian taxpayers.

"The changes the commission talked about in its recommendation were issues like the reduction of mobile licence fees, the international gateway fees, the public switched telephone network exclusivity licences and the barring of a fourth mobile operator," the source said.

"In fact, the commission of inquiry concluded that the Zamtel sale was a clear case of economic sabotage which pervaded and compromised key government institutions to the extent that the government decisions and policy were being managed by a foreign consultant. It further states that the full extent and continuing effect of these actions can only be determined if a full scale and thorough comprehensive forensic audit of the Zamtel privatisation process is instituted."

The source said the commission of inquiry also recommended that the ZDA senior management must be held fully responsible and culpable for the grossly negligent and cavalier manner in which it conducted and oversaw the sale of Zamtel.

"In fact, the recommendation is that Zambia Development Agency should immediately account for and render the balance of government proceeds received for the privatisation of Zamtel and must immediately transfer the same to the government," the source said.

"It also recommended that the ZDA must forthwith focus on monitoring Zamtel post privatisation as provided in the ZDA Act. The other aspect of interest is that the internal RP Capital documents projected that the value of Zamtel in 2015 would be in excess of US$ 5 billion about K25 trillion and this is a benefit which Zambians would not enjoy because of the fraudulent sale of the company."

The source said the commission of inquiry had noted that due to the problems LAP Green was facing in its investments in Uganda Telecom in Uganda, Rwandatel in Rwanda, Sonitel & Sahelcom in Niger, Oricel in Ivory Coast and Ambitel in Sierra Leone, it was clear that in its three-year history, the Libyan firm had proved to be inept and incompetent at running telecommunications networks.

"If you remember the immediate-past minister of commerce, trade and industry Felix Mutati had ridiculed people that ‘I don't see how releasing the RP Capital report will help the citizen because they will not even understand it, it is just figures on paper, I would advise people to instead listen to the rational explanation of the government over the Zamtel sale'," the source said.

"But the commission of inquiry concluded that in view of its findings, had the full and comprehensive report done by RP Capital been released, the Zambian public would have drawn logical conclusions regarding the conduct and execution of the Zamtel sale."

But in a statement, Lap Green condemned the likely reversal of its acquisition of the controversial stake in Zamtel last year.

"Lap Green, a pan-African telecommunications group, owned by LAP, has expressed concern on the process for the review of Zamtel sale and its potential reversal and it will work diligently to protect its interest as it confirms Lap Green's participation in the international bid for the telecommunications operator was done strictly following the legal framework as other participants in the process," stated Lap Green in an emailed statement.

[The Libyans should put their own house in order first. They think that they can murder an entire town of Africans, that 'whatever happens in Tawergha stays in Tawergha', and that there will be no repercussions? That they can conduct 'business as usual' in Africa? I don't think so. Besides, senior members of their government like Belhadj are 'former' members of Al-Qaeda and have close ties to the Taliban. Why would anyone in Africa want to do business with these genocidal maniacs? Why do the US, UK and France support them? Or has Al-Qaeda always been a US/CIA/ISI sponsored front group? - MrK]

Labels: CORRUPTION, DAN GERTLER, FELIX MUTATI, LAP GREEN, RP CAPITAL PARTNERS, ZAMTEL

posted by MrK @ 3:39 PM