Maravi

DEC freezes Zamtel Bank accounts

DEC freezes Zamtel Bank accounts
By Joan Chirwa-Ngoma and Mwala Kalaluka
Sat 21 Jan. 2012, 19:50 CAT

THE Drug Enfor-cement Commission has frozen Zamtel's accounts held in commercial banks operating in Zambia.

But Zamtel yesterday filed for judicial review at the Lusaka High Court over government's decision to freeze its accounts. Meanwhile, Zamtel employees risk not receiving their January salaries owing to the freezing of the company's bank accounts.

Cabinet sources revealed yesterday that the freezing of Zamtel accounts follows government's decision to repossess 75 per cent of the company's shareholding sold to Libya's LAP GreenN for US$257 million.

"That is why the workers are failing to bank the money because all the accounts for Zamtel have been frozen by the government," said the source. "This actually poses a serious problem because the workers may not even get paid. How do you pay workers when the accounts are frozen?"

Zamtel management yesterday morning filed for judicial review before judge Evans Hamaundu over the freezing of the company's accounts.

"But actually, most judges were reluctant to hear that case because of its sensitivity," said a source.

According to a statement in support for an application for leave to apply for judicial review filed in Lusaka High Court, Zamtel cried out that the seizure of its accounts in Barclays Bank and Zanaco would lead to a halt of its operations.

In the matter where the LAP Green Network-owned company has cited the Attorney General as the sole respondent, Zamtel is seeking relief from the High Court to reverse the seizure of its bank accounts.

"The applicant is a private company incorporated in the Republic of Zambia and is a one stop telecommunications company providing fixed telephone line services, mobile phone services, Internet services and other telecommunication services and products," Zamtel stated.'

The account numbers of Zamtel's accounts that were seized by DEC include, 042024000000000042, 3020001240 and 066024000000138 held at Zanaco and Barclays Bank.

Other seized accounts are 0011529, 161271152, 121156695, 0957718, 1213926, 011067026, 011067026 and 011039634 held at Barclays Bank.

Zamtel has sought an order to quash the decision by DEC to unilaterally and unreasonably issue a notice of seizure in respect of its seized accounts.
"A declaration that the procedure by the DEC to seize the seized accounts was unfair and contrary to the rules of natural justice," Zamtel stated in its application.

Zamtel wants the court to also declare that the Act under which DEC seized the accounts, which is the prohibition and prevention of money laundering Act number 14 of 2001 was unconstitutional as it infringes article 161 of the Republican Constitution.

Zamtel also seeks damages suffered as the result of the seizure of its bank accounts.

The statement further outlined the grounds upon which Zamtel was seeking relief from the court in the matter and one of them classified DEC's act as unreasonable.

"In that it permits DEC to seize property without paying compensation in the event that the seizure was wrongful, unreasonable and if the owner of the seized property is not found guilty of any offence," the application read further. "That holding money gained from a viable business duly established by law does not constitute money laundering."

Zamtel went on to argue that the seizure of its accounts amounts to an indirect expropriation of property by the government through its department or institution, the DEC.

Zamtel claimed that the decision by DEC was fraught with procedural impropriety.
"Procedurally DEC should have investigated the matter and accord the applicant its right to be heard immediately after seizing the Seized Accounts," the telecommunications company stated.

"It is settled precedent and a right in Zambia that when proceeding under provisions such as Sec 15 of the Prohibition and Prevention of Money Laundering Act number 14 of 2001 the right to be heard must be exercised by the authority involved."

Zamtel stated that DEC blatantly violated the above principle by not according it the right to be heard and to make representation regarding the seized accounts.

"That further the government, through its department, DEC is acting as the investigator and prosecutor in the same cause notwithstanding that it is a shareholder in the applicant," Zamtel stated in part. "That when arriving at the decision, the DEC failed to take into account relevant considerations such as that the applicant is a commercial entity that is able to show that the funds in the seized accounts are proceeds from business."

Zamtel stated that DEC also failed to take into account that the government, which is the shareholder in the company, sits on the board of directors and was aware of the source of the funds.

"There is no reasonable ground to believe that the funds in the seized accounts came from proceeds of crime for a company which is audited per quarter in a calendar year and both the government and LAP GreenN Network Limited as the shareholders know of these audits," the application read. "Since privatisation the applicant is a viable commercial entity and is able to have the sort of funds in the seized accounts."

Zamtel complained that the seizure of its accounts implies that the company has been operating an illegal business, in which the government was a shareholder.

"The seizure of all the accounts of the applicant will make the company more unprofessional which is not in the public interest as the provision of the applicant's telecommunication services shall be brought to a halt," Zamtel stated.

Zamtel stated in its ground of relief that it would be difficult to meet its workers' remuneration requirements following the seizure of its accounts by DEC.
The matter has since been allocated to judge Evans Hamaundu.

Sources told The Post on Thursday that Zamtel had stopped banking its daily collections due to uncertainties on the future of the company.
Cabinet recently agreed to repossess Zamtel from Lap GreenN.

A report of the Commission of Inquiry instituted by President Michael Sata led by justice minister Sebastian Zulu noted that LAP GreenN must have been eliminated at the pre-qualification stage during the privatisation of Zamtel as it did not meet both the five year minimum telecommunications operators requirement and the national telecommunications network licence requirement.

The report also revealed former president Rupiah Banda's influence in abusing and circumventing set government institutions and procedures and that he aided RP Capital to ensure LAP Green Networks bought Zamtel despite not being fit to run the company.

The report further reveals that that following review of the bid from LAP GreenN, the 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.

But LAP GreenN chairman Wafik Alshater stated that the Libyan firm would be forced to explore legal options to protect its reputation following what he termed "willful misrepresentation" of the company.

Meanwhile, Zamtel employees are uncertain about the company's future, as they risk not receiving their January pay.

"The workers want to know what their fate is. As at now, things are not okay. The workers were promised that their jobs will not be affected but looking at the way things are moving, it is not clear what may happen tomorrow," said the sources.

Labels: COURTS, DEC, EVANS HAMAUNDU, LAP GREEN, ZAMTEL

posted by MrK @ 4:53 AM