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Kunda must own up on Zamtel sale - TIZ

Kunda must own up on Zamtel sale - TIZ
By Chibaula Silwamba
Sat 26 Nov. 2011, 12:00 CAT

GEORGE Kunda's defence of the irregular sale of Zamtel is misplaced and must own up, says Transparency International Zambia (TIZ) president Reuben Lifuka. And Lifuka says State House should have absolutely nothing to do with procurement of services.

Commenting on the revelations about illegalities and irregularities in the sale of Zamtel's 75 per cent shares to LAP Green for US$257 million whereas the Zambian government paid US$334 million to retain its own 25 per cent shares under the reign of former president Rupiah Banda and Kunda as vice-president last year, Lifuka said the Muchinga parliamentarian's statement was unfortunate and misplaced.

"Our advice to Mr Kunda is to stop being hypocritical and simply explain himself and his party on the allegations that are being raised. He should not trivialise the same instruments of governance that he and his colleagues willing utilized, simply because he is not in government," Lifuka said.

"On Mr. Kunda's comments of the commission of inquiries that the outcomes are stage managed, is this an admission of how the MMD used to run such inquiries?"

He said TIZ had received the findings of the Commission of Inquiry on the Zamtel sale, as published in the media, with a sense of great disappointment but with a lot of vindication.

"The findings in actual fact, fortify our decision to join other civil society organizations in the Dennis Chirwa Tribunal against former minister of communications and transport, Hon Dora Siliya. It is important to state the dubious manner in which RP Capital were engaged , firstly to do the valuation of assets and subsequently to act as transaction advisors, is the beginning of the problems associated with the privatization of Zamtel," Lifuka said.

"What is evident from the findings is that former president Rupiah Banda, largely ignored the findings and recommendations of the Dennis Chirwa Tribunal. Clearly, if the president and his cabinet at the time, had acted on these recommendations, the MoU that was purportedly signed by Hon Siliya, would have been cancelled."

He said what was no longer in dispute was that the MoU that committed the Zambians to pay US$2 million for the valuation services and a further US$12 million to RP Capital, was fundamentally flawed and did not adhere to the laid down procedures.

"Reading the findings thus far, gives the impression that there is definitely some vital information which was kept away from the Dennis Chirwa Tribunal about RP Capital and the manner in which their services were procured, which would have probably changed the nature and type of recommendations that the Tribunal made," Lifuka said.

"What makes it worse is that the irregularities in public procurement did not stop with RP Capital but this subsequently extended to the manner in which Lap Green were selected as the winning bidder."

He said this development brought the competence of the Zambia Development Agency (ZDA) and the Zambia Public Procurement Authority (ZPPA) together with the Banda administration into question.

"The questions to be asked are many but at a minimal one asks what type of due diligence was conducted by RP Capital and later Lap Green. Further, the role of Cabinet comes into question- cabinet approval of the partial sale of Zamtel was necessary and this decision was supposed to be informed by accurate valuation of the Zamtel assets- did cabinet act on this basis and in good faith or personal considerations did override public interests?"asked Lifuka.

"We would like to know why government had to pay US$334 million for retention of 25 per cent shares in Zamtel. We wish to know the market value of Zamtel at the time of sale and whether government did consider this value in arriving at the final price? We want to know why Zambian Valuation Surveyors who are highly competent and experienced were ignored for this valuation exercise, in preference for a company with limited experience in this area?"

He said TIZ recommended that the government should comprehensively and objectively consider the findings of the commission of inquiry and the subsequent decisions taken should be in the best interest of Zambians.

He said the government should consider pursuing all people involved in the Zamtel saga from the former ministers, ZDA senior staff and other government officials.

Lifuka said necessary court actions for abuse of authority and gross negligence should be undertaken.

"It is necessary that government equally considers the breaches that the Dennis Chirwa Tribunal found against Dora Siliya. We fully endorse the recommendations of the commission of inquiry for government to institute civil action against RP Capital, who under the circumstances, failed to do a competent job but ended up being paid US$12 million of funds that could have been put to other national development activities," Lifuka said.

"If indeed Lap Green did not meet the mandatory requirements as stated by the commission of inquiry, government should consider reversing this sale."
He said the corruption and fraudulent tactics should not be the means of selecting a winning bidder.

He said workers' plight must be taken into consideration when making a decision on the Zamtel sale.

"We want to take this opportunity to urge the PF government to have a complete overhaul of the public procurement system which was definitely severely compromised by the MMD government," said Lifuka.

"We want to urge President Sata and his cabinet and ensure that public procurement is handled by the competent bodies. State House should have absolutely nothing to do with procurement of services."

Justice minister Sebastian Zulu and commission of inquiry technical committee chairperson Dimple Ranchhod on Thursday revealed that Kunda's law firm had received a K190 million payment from a Zamtel account.

The commission of inquiry also revealed that the Zambian government paid US$ 334 million about K1.7 trillion to purchase its own 25 per cent shares in Zamtel during privatization.

LAP Green Network, which bought 75 per cent shares in Zamtel last year, has only paid US$ 15 million about K 76 billion to the Zambian government out of the purchase price of US$257 million about K1.3 trillion while RP Capital Advisors - the advisors in the transaction -received a cash payment of about US$ 12.6 million about K 64 billion from the transaction.

The commission of inquiry recommended the termination of agreements relating to the sale of Zamtel's 75 per cent to LAP Green Network for US$257 million.

It also recommended the immediate termination of the illegal agreement in which Zesco ceded its fibre optic network to Zamtel.

Labels: CORRUPTION, GEORGE KUNDA, LAP GREEN, REUBEN LIFUKA, RP CAPITAL PARTNERS, TIZ, ZAMTEL

posted by MrK @ 5:27 PM