Maravi

(COMMISSION OF INQUIRY) The ZAMTEL Report Pt 2

3.2.1. The Tender Process

i. On the 18th of August, 2009 the Director General of ZDA wrote to the Director General of Zambia Public Procurement Authority (ZPPA) seeking a waiver from Open Selection (International or National Selection) to Direct Selection tendering process.

In that letter the Director General ZDA reported that the ZDA Board had recommended that RP Capital Group be engaged on the basis that the firm had previously conducted some preparatory work to the satisfaction of ZDA and therefore should be contracted to continue with Transaction Advisory Services. In their application for a waiver to ZPPA the ZDA enclosed a Request for Proposals (RFP) for review.

ii. On 19th of August, 2009 a follow up letter was sent to the ZPPA providing further information and clarifications that, among others, RP Capital were engaged previously for preparatory work on 09th December, 2008 at a cost of the higher of US$2million or 5% of the Transaction proceeds.

iii. On the 27th of August, 2009 the Director General of ZPPA granted ZDA a waiver from Open Selection to Direct Selection to engage RP Capital Group. Consequently a Direct Invitation for Proposals was sent to RP Capital Group.

iv. Proposals were received and on the 11th of September, 2009 the Director General ZPPA asked the Director General ZDA to evaluate the bids.

v. On the 14th of September, 2009 - Since the tender was a Two Envelope System, the ZDA Director General submitted the results of the Technical Evaluation results in which RP Capital had scored 86.2% over and above the prescribed minimum of 75% in the RFP.

vi. Also on the 14th of September, 2009 the ZPPA Director General (DG) approved the Technical Evaluation report administratively. This Committee notes that this approval was done by the ZPPA Director General (DG) administratively instead of an approval by the Central tender Committee (CTC).

vii. Also on the 14th of September, 2009 the DG ZPPA invited the DG ZDA and RP Capital to the opening of the RP Capital Advisors Financial Proposal which was scheduled to take place at 15.30hrs on the same date. The Financial Proposal was opened at 15.48 hrs and subsequently sent to ZDA for a combined Technical and Financial evaluation.

viii. The report on the combined Technical and Financial evaluation was submitted back to ZPPA also on the 14th of September, 2009 for consideration of the award of contract to RP Capital and on the same day at a sitting that took place at 21.00 hours the Central Tender Committee (CTC) approval was granted to ZDA. This Committee highlights the extraordinary speed and urgency attached to the selection of RP Capital particularly as they were single sourced.

ix. On the 15th September, 2009 the contract between ZDA and RP Capital Advisors was signed and a copy was sent to ZPPA.

This Committee again places on record that it is inconceivable that a contract of this magnitude could have been prepared, approved and executed and a copy forwarded from ZDA to ZPPA in the course of one (1) morning. This Committee can safely conclude that this contract was preprepared prior to tender approval and award and ZDA merely signed the contract without any negotiations or review whatsoever of the terms contained therein.

3.2.2. Additional relevant information

i. In the interview with the Director General of ZDA, he informed the Committee that he met with RP Capital Partners and GRZ officials to request for the RP Capital documents prepared under the MoU. He advised the Committee that RP Capital refused to hand over any information unless they were appointed as Transaction Advisors on the sale of Zamtel.

This statement was of grave concern to this Committee. This Committee notes that if true, RP Capital essentially held GRZ to ransom. The emphasis in the preceding sentence is deliberate as there are many inconsistencies in the sequence of events as established by the Committee.

a. On the 25th of March 2009, the Permanent Secretary - MoCT wrote to RP Capital suspending the MoU until further notice.

b. On the 27th of March 2009, Dora Siliya instructed the Permanent Secretary – MoCT to urgently withdraw the above letter.

c. On the 1st of April 2009, the Permanent Secretary – MoCT withdrew the letter.

d. The Committee interviewed Mr. Henry Sakala – ZDA Privatization Manager who is on our record as having advised the Committee that as far as ZDA was considered, the MoU signed between RP Capital was a “nullity and had died a natural death after the Dennis Chirwa Tribunal.”

e. On the 23rd of June 2009, the Permanent Secretary – MoCT wrote to RP Capital “re-affirming the procedure of under-taking the valuation and possible sale of Government stake in ZAMTEL.”

f. As stated earlier in this report, the Report from RP Capital and Cabinet summary that was presented to the Committee of 4 Ministers is dated the 22nd of July 2009.

g. Only upon Cabinet approval of Zamtel for privatization on the 23rd of July 2009 did ZDA enter the picture. At this point RP Capital had already handed over the documents under the MoU to the Committee of 4 Ministers. This Committee is therefore at pains to understand which documents were withheld from ZDA by RP Capital as claimed by Mr. Chipwende that forced him to single source RP Capital as transaction Advisors.

h. It is worth pointing out that the ZDA Board Chair did not recall that the ZDA Board ever approved the Direct Selection of RP Capital as claimed in the letter dated 18th August 2009 to ZPPA by the ZDA Director General.

3.3 Engagement of Simmons and Simmons

3.3.1. The Tender Process

i. On the 26th of November, 2009 the ZDA Privatization Manager wrote to ZPPA asking to process a Limited Selection tender for legal firms for advisory services for the process of selling 75% shares in Zamtel. The Request for Proposals (RFP) was sent out to the following legal firms.

1) Baker & McKenzie –UK;
2) Simmons and Simmons – UK;
3) Paul Hastings – USA;
4) Morrison & Forester, - USA; and
5) White & Case - UK.


ii. The closing date for receipt of proposals was 28th December,2009 and only two proposals were received from:
1) Simmons and Simmons; and
2) Paul Hastings.

iii. On the 30th of December, 2009 ZDA submitted a Technical Evaluation report to ZPPA in which Simmons and Simmons were technically qualified and requested for the opening of the Financial Proposal accordingly. On the same day ZDA submitted to ZPPA a combined Evaluation Report recommending the award of contract to Simmons and Simmons.

iv. The Central Tender Committee (CTC) of the ZPPA deferred the approval and instead requested ZDA to address some concerns regarding the ability of legal firms to respond to tenders and the legal fees quoted in view of the Legal Practitioners Act.

v. ZDA sought guidance from the Attorney General’s office and that was provided on the 7th of January, 2010 and subsequently submitted to ZPPA for further considerations.

vi. On the 7thof January, 2010 the CTC granted authority to ZDA to award the contract to Simmons and Simmons at a cost of US$660,000.00 exclusive of taxes.

vii. A contract between Simmons and Simmons and ZDA was signed on the 5th of February 2010 although clause 2.2 of this contract provides that “The Consultants in good faith began carrying out the services under this contract on the 9th of January 2010.”

3.3.2. Additional Relevant Information

i. In their initial interview with Mr. Henry Sakala – ZDA Privatization Manager, this Committee had queried the appointment of a foreign law firm. Mr. Sakala had explained that Zamtel was a highly complex transaction that required lawyers specialized in the telecommunications industry and because no local law firms had the relevant expertise, a foreign firm had been appointed.

A perusal of the Description of the services appended to the contract for legal services entered into between ZDA and Simmons and Simmons, particularly clause 4, which specifically lists the tasks expected of the consultant, reveal no task that would require specialized telecommunications lawyers.

To the contrary, it is this Committee’s opinion that local lawyers with knowledge of the Zambian laws would have been better suited for the task.

ii. This Committee interviewed the ZDA Head of Legal Department – Mr Charles Mulenga. Mr. Mulenga informed this Committee that he had strong reservations about the Zamtel sale from the start and therefore delegated all legal work connected to Zamtel to his junior Ms. Yadika Mkandawire.

iii. This Committee also interviewed Ms. Yadika Mkandawire Lead ZDA Counsel on the Zamtel sale. Ms. Mkandawire informed the Committee that whilst she was consulted on a few of the minor agreements and documents, she was not privy to nor was she consulted on any of the Zamtel transaction documents.

Ms. Mkandawire also informed this Committee that she performed the role of a “legal clerk” and not one of lead Counsel. She believes this may have been as a result of the fact that she was previously employed in the Attorney-General’s chambers and was therefore perceived to be from the
“Mumba Malila camp and was deliberately left out of the loop. Ms. Mkandawire informed the Committee that once the privatization process commenced, she was in fact removed from the email mailing lists at ZDA and was only provided piecemeal instructions.

She stated that the ZDA legal department was reduced to the role of observers. Ms. Mkandawire gave an example of meetings held in London with RP Capital and ZDA where the Attorney General sent a lawyer from his chambers and ZDA lawyers were left out and only heard of the meetings from third parties.

iv. Prior to the engagement of Simmons and Simmons, ZDA had engaged the services of Messrs. Mulenga Mundashi. This Committee also interviewed Mr. Mundashi after his professional privilege had been formally waived by ZDA. Mr. Mundashi informed this Committee that he had been appointed by ZDA as external transaction lawyers on the 26th of October 2009 with a very broad mandate. His firm was consulted on several documents and rendered advice on the same.

Mr. Mundashi was also consulted on the issue of GRZ waiving outstanding taxes due to ZRA from Zamtel. His advice was that ZRA tax could not be waived without Parliamentary sanction. Mr. Peter Heilner of RP Capital disagreed with his advise and consequently Mr. Mundashi arranged a meeting with the then ZRA Commissioner – Domestic Tax Mr. Wisdom Nhekairo.

Mr. Mundashi and Mr. Peter Heilner met Mr. Nhekairo at ZRA and Mr. Nhekairo confirmed Mr. Mundashi’s advice. Messrs. Mulenga Mundashi were subsequently asked to render a bill for their services and their bill was paid.

v. It is worth mentioning that prior to the 26th of November 2009 when the tender process for legal services that led to the appointment of Simmons and Simmons commenced Simmons and Simmons were already in contact with RP Capital regarding the privatization of Zamtel..

We refer to email correspondence dated the 19th of October 2009 from Peter Heilner of RP Capital to Arthur Stewart and copied to David Shasha – both Partners at Simmons and Simmons as well as Arthur Stewart’s response dated the 20th of October 2009.


“From: Peter Heilner [mailto:Heilner@rpcapitalgroup.com]
Sent: 19 October 2009 18:53
To: Arthur Stewart
Cc: David Shasha; Peter Nemeth; Jayne McCann
Subject: RE: Zambian counsel
Arthur, David,

As discussed, the following is a list items that we need to clear before the first week of November for inclusion in the virtual data room:

· Indefeasible Right of Use Agreement between ZESCO (the national power utility) and Zamtel whereby ZESCO grants Zamtel the exclusive right to all the unused (that ZESCO does not use for internal purposes) optic fibre on its network for a fixed rate for an indefinite period. Commercial terms and a rough agreement have already been put together

· Amendments to the Articles of Association of Zamtel – Transition from a 100% government owned company to a private company and the inclusion of veto rights associated with 25% shareholding that the government is retaining

· Review of contract amendments with equipment suppliers (Huawei and ZTE) and associated government guarantees (some drafted)

· Review of covenant waivers from lenders (Chinese State banks)

· Review of “conditional” redundancy agreements with Unions (drafted) There are also likely some other more minor items which might crop up from time to time.

I would appreciate it if you could prepare a cost estimate as soon as possible on this basis and I will clear with my client and we can get started immediately. From a contractual perspective Simmons would be working with RP for this interim period. Zambian local counsel will be retained by the ZDA separately and will be available to provide input from a drafting perspective throughout this period.

Let me know if any of the above is unclear or if there are any further questions.

Regards,

Peter”

“From: Arthur Stewart [mailto:Arthur.Stewart@simmons-simmons.com]
Sent: Tue 10/20/2009 11:55 AM
To: Peter Heilner
Cc: David Shasha; Peter Nemeth; Jayne McCann
Subject: Estimate for Support Period

Peter:

Many thanks.

On the basis that we are providing an estimate of legal fees to provide support on the various items of work set out in your email below for a 2 week period (the "Support Period") our estimated pricing (exclusive of VAT and disbursements) is as follows:

We would apply a 10% discount to our standard hourly rates. We estimate that our overall fees for the Support Period should not exceed £40,000 -£50,000 in aggregate. Within this general estimate we estimate that the fees in relation to items 1 and 3 may be as follows:

1. IRU (Indefeasible Right of Use Agreement) - the drafting and negotiation (if needed) of the IRU during the Support Period we would estimate our fees at £6,500 -£8,000. To the extent that our actual fees recorded are lower than this amount we will bill the lower amount;



3. Amendment to equipment supply contracts - this is a difficult item to price accurately since we do not know the scope of the amendment (i.e. whether it is the minor addition of some products or services or a more major project such as the provision of network to a major geographical area for example).

However, we can estimate our fees for drafting and negotiation support during the Support Period at £12,000 - £14,000. This figure is obviously created with a view to covering the possibility of the amendment being at the more major end of the scale. If the amendment is much more minor then the fees would be much less and we would bill what is recorded. The work on the guarantees would also be included in this sum.

When you have had a chance to digest this please call us to discuss. We are looking forward to getting started and working closely with you on with this very exciting project.

Best regards

Arthur and David

Arthur Stewart

Partner

D +44 (0)20 7825 3800

F +44 (0)20 7628 2070
E arthur.stewart@simmons-simmons.com
Secretary
Jayne McCann / Janice Frost
D +44 (0)20 7825 4094
F +44 (0)20 7628 2070”

In addition to the email evidence above, this Committee’s findings are that Simmons and Simmons are RP Capital’s attorneys of choice having previously acted for them on several assignments as can be seen from their respective websites.

It is clear from the above emails that the tender award to Simmons and Simmons was a predetermined and foregone conclusion.

4. Invitation of bidders for Zamtel

4.1 The pre-qualification process.

i. On the 15th of September 2009, the ZDA advertisement/ notice for the sale was published in the local and international media.

ii. Friday the 16th of October, 2009 17.00 hours was the closing date for the interested bidders to submit their Expression of Interest (EoI) and eight (8) international firms submitted namely:

. LAP GreenN - Libya,
. Altimo Holdings – Russia,
. Unitel/Angola Cables –Angola,
. Bharat Sanchar Nigam Limited (BSNL) – India,
. Mahanagar Telephone Nigam Limited (MTNL) –India,
. Portugal Telecom –Portugal
. Telecel Globe (Part of Orascom Telecom);and
. Telkom South Africa - RSA.

iii. The ZDA Board prequalified all the eight (8) interested bidders including LAP GreenN.

4.2 Comments and observations on LAP GreenN.

4.2.1. Following a review of the bid from LAP GreenN this Committee noted serious and critical anomalies in the qualification of LAP GreenN in the preliminary stage which ZDA, their lawyers and their transaction advisors deliberately ignored.

The Public invitation announced on the 15th of September 2009 for invitation to prequalify for participation in Zamtel privatization set out three mandatory criteria.

i. 1st criteria – Minimum 5 years operation in the telecommunications industry.

We quote from the Zamtel privatization pre qualification application form sent by ZDA to all prospective bidders:

“Only Companies with a minimum of 5 years licensed operation in the telecommunications industry, as the primary activity of the Company, will prequalify.”

We further quote from the LAP GreenN’s completed pre-qualification application form as submitted to ZDA wherein LAP GreenN state that they have been in the telecommunications industry for 8 years:

“16th October 2009

LAP GreenN Application form”

Page 4: “Criterion 1: Number of years in operation in the telecommunications industry – 8 years”

We also quote from the above mentioned minutes of ZDA Board Meeting of
the 31st of March 2010:

Page 2: “Incorporated in 2007, LAP Green Networks shares its mission with its
parent, LAP, namely to contribute to the development of African nations.” LAP GreenN having been incorporated in 2007 at the time of prequalification (16th October 2009) had been in existence for less than three years. It is clear from the above, that LAP GreenN did not meet the first of the mandatory pre-qualification bidder selection criteria – namely the requirement to have been a telecommunications operator for not less than five years.

Furthermore, it was a requirement in the 1st prequalification criteria, that documentation in support of criteria 1 be submitted and we quote:

“For Sole Applicant Companies: (i) A copy of at least one (1) license for the Company to operate a national telecommunications network”.

A diligent search by this Committee reveals that LAP GreenN does not own any licence to operate a national telecommunications network.

It is the considered opinion of this Committee that LAP GreenN should have been eliminated at the pre-qualification stage as it did not meet both the five year minimum telecommunications operator requirement and the national telecommunications network licence requirement to comply with the 1st criteria in the mandatory pre-qualification.

ii. 2nd Criteria – Minimum 3,000,000 active subscribers in the telecommunications sector. LAP GreenN had no subscribers attributable to itself, its holding company or its parent company.

In order to attempt to satisfy this 2nd criteria, LAP GreenN relied on a percentage of subscribers proportionate to their shareholding in 4 separate companies in which LAP GreenN had equity interests namely Uganda Telecom Ltd of Uganda, Rwandatel of Rwanda, Oricel of Ivory Coast and Sonitel & Sahelcom of Niger.

It is the considered opinion of this Committee that this is an absurd attempt at subscriber numbers engineering as for example, any shareholder in a public telecommunications company could then lay claim on a number of subscribers proportionate to their shareholding.

In any event, even the instructions contained in the prequalification application form clearly state on page 3 that a lead member must be “capable of satisfying criteria 1 and 2 on its own”. LAP GreenN failed the 2nd mandatory prequalification criteria.

iii. 3rd criteria – Minimum US$250 Million or more in shareholders’ equity. LAP GreenN attempted to satisfy this criterion through its parent company and stated that the capital of the company was US$500 million. However, in order to satisfy this criterion, the prequalification form requires that a sole applicant provides, and we quote “a copy of the Company’s most recent, published accounts no older than for the accounting period including June 2008”.

This Committee highlights and quotes from page 6 of LAP GreenN’s prequalification application form:

“We have provided our balance sheet as per draft accounts which clearly show that we have capital well above the minimum of US$ 250 Million. Please note that the audit of our financial statements for the year ended 31 December 2008 has not been completed. We will furnish you with the audited accounts as soon as the audit is completed.”

Clearly, LAP GreenN had no audited accounts. LAP GreenN therefore also failed the 3rd mandatory prequalification criteria

Despite LAP GreenN having failed ALL THREE OF THE MANDATORY PREQUALIFICATION CRITERIA, they were allowed to proceed to the next stage of the Bidding process.

5. Evaluation of bids

5.1 Bidding Round

i. After the pre-qualification process the eight (8) bidders were invited on 23rd October, 2009 to submit their non- binding bids (offers) for the purchase of 75% percent shares in Zamtel and the closing date for the submission of their proposals was the 23rd of December, 2009 at 15.00 hours local time.

ii. On the closing date four (4) out of the eight (8) bidders submitted their nonbinding offers in the tender box at the ZDA office building and these were:

. Altimo Holdings – Russia;
. Bharat Sanchar Nigam Limited (BSNL) – India,
. Lap Green Networks –Libya,
. Unitel/Angola Cables - Angola.

iii. On the 11th of January, 2010 the ZDA Board approved the acceptance of the four (4) offers after the due process of evaluation and therefore, all four (4) qualified to the next stage of the bidding process.

5.2 Comments and observations on the Altimo Holdings bid submission:

i. The electronic bid was received by the ZDA five (5) minutes after the closing time and therefore, the bid was late and should not have been accepted. Although ZDA received an application from the bidder justifying that the late arrival was due to a technical fault of their internet saver. The ZDA Board accepted the appeal one week later and the Altimo Holdings bid was accepted and elevated to the next stage. Under normal tendering practice electronic bids are never accepted due to the possibility of technical problems. In fact, the bidders had a mandatory obligation to submit hard copies of the same, in addition to the soft copy, physically by dropping it in the tender box at the ZDA office.

ii. In addition to accepting the late bid from Altimo Holdings, the bid was further given an “amnesty” during the evaluation process by the evaluation team after the evaluation team noticed that the bid did not include a Capex figure. A Capex figure of US$58million was put forward by Altimo Holdings after contact by the Evaluation Committee.

6. Short listed bidders/Final bids

6.1 The final binding bids.

i. On 2nd February, 2010, solicitation documents were sent to the following firms for their final binding offers. The closing date for the submission of their bids was 12th March, 2010.

ii. On that closing date, only three (3) bids were received from the following firms:

. Altimo Holdings – Russia,
. Lap Green Networks – Libya,
. Unitel/Angola – Angola.

iii. Bharat Sanchar Nigam Limited (BSNL) – India did not submit their bid. They had requested for an extension to the closing date which had been rejected by ZDA.

iv. After evaluations and recommendations from the ZDA management, the ZDA board the ZDA approved the acceptance of binding bids from both Lap Green Networks and Unitel/Angola on 31st March, 2010 and authorized ZDA management to invite the 2 bidders for negotiations.

v. The bid from Altimo Holdings was disqualified for, among other reasons, their bid being incomplete as it did not include a business plan. The Board approved that the Altimo bid be placed in reserve, in case the Lap GreenN and Unitel bids failed at the negotiation stage.

vi. At its approval meeting for the negotiations, the ZDA Board also approved the appointment of the negotiating team. This Committee notes that the provisions of Section 40 (1) of the ZDA Act, provide that “The Board shall appoint an independent negotiating team for each sale”.

This Committee is therefore surprised by the inclusion of the following:

a. The Attorney General – Mr. Abuydi Shonga; As a consequence of his membership of the ZDA Board, the Attorney General cannot be considered an independent member of the negotiating team.

b. Director General ZDA – Mr. Andrew Chipwende; By virtue of his employment as Director General of ZDA, the Director General cannot be considered an independent member of the negotiating team.

c. Transaction Advisor, RP Capital Advisors – Mr. Peter Heilner By virtue of their employment as consultants to ZDA, particularly since their remuneration was a percentage based fee only payable if a sale occurs, and therefore in their interest to conclude a sale regardless of whether the terms were favorable to GRZ or not, Mr. Peter Heilner cannot by any stretch of the imagination be considered independent.

d. Legal Counsel, Simmons & Simmons; The purpose of appointing an independent negotiating team is to ensure that the negotiations are conducted in good faith and a transparent manner. Due to the strict rules regarding client confidentiality legal counsel cannot be considered independent as their professional duty lies with their client.

e. Director of Telecommunications, Ministry of Communication and Transport – Mr. Luwani Soko. Prior to his appointment at MoCT, Mr. Soko was Technical Director of Zamtel.

This Committee quotes from an email dated 21st of September 2009 from Peter Heilner to Joseph Jalasi – Special Legal Advisor to the President and copied to Andrew Chipwende – DG ZDA and Dr. Richard Chembe - Special Economic Advisor to the President:

“Luwani Soko’s move from Zamtel to MCT needs to be delayed until 21st October so he can participate in labour negotiation process (in interim he should be required to report to licensing and regulation committee)”.

Clearly, Mr. Soko, having participated in labour negotiations at ZAMTEL was not an independent member of the negotiating team.

This Committee then finds that the negotiating team appointed by the ZDA board to negotiate the sale of Zamtel was not an independent negotiating as required by Law.

7. The Negotiating Process

7.1 UNITEL – final binding bid.

Zambia Development Agency – Memorandum To The Agency Board Paper – Authorization of Final Transaction Structure for Zamtel Privatization 2nd June 2010 Zambia Development Agency Management

We quote from the above-captioned paper in relation to some of the criteria used by the ZDA Negotiating Team in assessing the two final bidders:

“It should be noted that UNITEL were asked to reconsider (a) their capital expenditure programme, which the negotiating team considered excessive (at US$ 426 million) and (b) their redundancy programme (which 67% of the workforce, was materially subordinate to LAP’s proposed 100% redundancy programme).”

This Committee noted with concern, that part of the final negotiation criteria that was used to the detriment UNITEL are criteria that should have worked in their favour – i.e. the retention of a larger Zambian workforce and the commitment to a greater Capex investment in the Zamtel network.

7.2 LAP GreenN – Final binding bid

i. The original LAP GreenN non-binding bid was based on a 70% staff redundancy. This Committee notes that the final binding bid allowed for 100% staff redundancy as a consequence of the negotiation process, perhaps as a result of Mr. Luwani Soko on the negotiating team.

ii. The negotiating team conceded several incentives that were not part of the original LAP GreenN non-binding bid:

. The inclusion of the Zesco Optic fibre Network valued at approximately US$20M;
. GRZ paying US$120M (K 557,948,972,876.00) tax liabilities;
. Operators and Service licences given for free valued at approximately US$150 M market value;
. Spectrum allocation valued at approximately US$150 M market value;
. Barring a 4th Mobile operator from the Zambian market;
. PSTN exclusivity.

This effectively means that the negotiating team cost the process in
excess of US$440 M.

7.3 The results of the Negotiations:

i. The negotiations started on the 11th of May, 2010 and the ZDA Board approved the selection of LAP GreenN as the successful bidder on the 2nd of June, 2010.

ii. The negotiations resulted in the selection of Lap Green Networks of Libya as the purchaser of 75% shares in Zamtel at a total consideration of US$257million.

iii. The transaction documents were signed on 5th June, 2010.

iv. The completion of the transaction took place on the 10th July, 2010 with the exchange of all legal documents between parties and the purchaser paid the final balance of the purchase price. Zambia Development Agency 23rd Special Board Meeting

2nd June 2010 Zambia Development Agency Board

We quote from the above-captioned Board Meeting in relation to some of the
observations made by the Board regarding the Zamtel privatization process;

“ (i) Whether or not the Zamtel Board had seen and reviewed the sale document before it was presented to the ZDA Board.”

“(ii) If the Zamtel Board had reviewed the document, were the minutes of the same Board meeting available?.”

“(iii) Ideally the draft sale agreement should have been availed to the ZDA Board for review before being forwarded to the Attorney General for approval.

“(iv) In future privatizations, there ought to be regular briefings on each stage of negotiations so that the Board would be made aware of what was going on.”

“(v) Mrs. S. Thole requested that she be recorded as having objected to clause 6.9(i) of the Board Meeting minutes (Sale of 75% equity stake in Zamtel to Lap Green Networks for a total consideration of US$256.5 million).”

This Committee notes that even the ZDA Board was not wholly satisfied with the conduct of the Zamtel sale.

Labels: CORRUPTION, DORA SILIYA, PRIVATISATION, RP CAPITAL PARTNERS, ZAMTEL, ZDA

posted by MrK @ 7:53 PM