Maravi

Government moves into zamtel

Government moves into zamtel
By Chiwoyu Sinyangwe, Bright Mukwasa and Kombe Chimpinde
Wed 25 Jan. 2012, 14:00 CAT

THE government has taken back 75 per cent shareholding in Zamtel "fraudulently" acquired by Libya's LAP Green Network in the controversial transaction hatched in 2010 at US$257 million. But former finance minister Situmbeko Musokotwane says the repossession of Zamtel's 75 per cent shares will not die naturally.

And a combined team of security wings yesterday sealed off all Zamtel operations across the country, expelling foreign top officials in Lusaka led by managing director Hans Poulsen, who has been replaced by telecommunications engineer, Dr Mupanga Mwanakatwe.

Meanwhile, the new Zamtel management has opened an account at Zanaco Lusaka Business Centre to provide a window for Zamtel regional accountants to deposit sales and other monies previously blocked by Drug Enforcement Commission (DEC)'s freezing of the company's official accounts.

President Michael Sata said yesterday that he deemed it desirable and expedient to compulsorily acquire the 75 per cent shareholding of Lap Green Network in Zamtel after the government having accepted without reservation the report on the findings of the committee investigating the sale of state-owned telecommunication company.

"The appropriate notice under the law has been given," special assistant to the President for press and public relations George Chellah said in a statement.

"Consequently, the President has ordered the dissolution of the Board of Directors of Zamtel. The Head of State has appointed Dr Mupanga Mwanakatwe, chairman and acting chief executive officer as a first step to regularise the affairs of the company. A new board will soon be put in place to give the policy guidance and direction to management and staff."

He said the government would restructure ownership of Zamtel to ensure Zambians owned the bulk of the shares in a revitalised Zamtel.

President Sata further directed Zamtel management to address the plight of Zamtel workers with due immediacy.

"There should be no loss in jobs except through retirement and attrition while maintaining the highest levels of discipline and respect of law," he said. "Zamtel workers have served with distinction in an area of sophisticated information technology. This has been so from the inception of the company."

President Sata reiterated his "relentless commitment to his duty as custodian of the interests of the Zambian people" and assured the Zamtel workers that their traumas and anxieties would be ended.

But Dr Musokotwane said although the debate on whether government must nationalise Zamtel or not was under the bridge, he was still interested in establishing why the government had taken such a decision.

"I can't speak for Lap GreenN but you cannot expect them to walk away from their investment without asking to be compensated. I do not want to speak for them, I think that is up to them. My interest is establishing why as a government we acted in the manner that we did as far as battles for Lap GreenN are concerned. That is their own internal matter, they can do what they want," Dr Musokotwane said.

He reiterated his demand for ZDA to release its report submitted on Zamtel.

"I know because I was a minister then that on all three counts, the ZDA said something different from what the commission of inquiry has said, so the question is who is telling the truth? ZDA or the commission…," he said.

Asked to counter the argument that officers at ZDA were operating under duress and pressure from government on the deal, Dr Musokotwane who is also Liuwa member of parliament said the same thing then could be said about the Sebastian Zulu-led commission of inquiry.

"Before PF got in government they called the sale fraudulent, remember that the commissioners were ministers so if you say that the ZDA were under the influence of government, why shouldn't the same be said on the commission of inquiry? So let us not politicise these issues. This is probably water under the bridge, but for those who want to know the truth, this issue still needs to be established after all, most probably this thing is going to go to court," he said. "I have been a public officer since 1991. I have worked under the Kaunda, Chiluba, Mwanawasa and Banda regime. Over this period, I have been above board. This is the only period that people are making accusations against me."

Dr Musokotwane also said the re-nationalisation of Zamtel would be a test case for other investors wishing to invest in the country.

And top foreign officials at Zamtel were yesterday expelled from the company shortly after reporting for their "daily routine" work schedules.

The expelled officials included Poulsen, a Ugandan national, David Chetty, chief technical officer, a Malawian of Asian origin, Adrian Hayd, chief financial officer, a Pakistani national and Ismail Dore, senior manager for business planning, a Zambian of Asian origin.

Sources said the expulsion of Dore was a "mistaken identity" as he is Zambian but his "skin colour sold him out".

In an emailed memo to workers, Zamtel chief human resource and administration officer Eve Banda confirmed the presence of state security at Zamtel operations and installations throughout the country.

"Dear all, we are currently surrounded by police presence, please I know this is a difficult working environment but let's endeavour to work as we await further instructions from the Government. Thanks…," Banda stated in a memo sent to all employees about 8:30 a.m yesterday.

Workers who spoke separately confirmed the heavy presence of officers from the security wings who offered thorough screening to employees reporting for work yesterday morning.

"Yes, the cops are screening everything from laptops and just about all personal belongings, and these are officials from Zambia Police, DEC and OP Office of the President," one worker said anonymously.

"But as for the accounts, all accountants that deal with monies from sales, collections on the payment bills, sim Subscriber Identity Module cards sales, and all regional accountants have been instructed to deposit whatever they have collected so far into account number 0030210000008659 at Zanaco Lusaka Business Centre."

And the Lusaka High Court yesterday rejected an application by Zamtel that its quest for a judicial review over the Drug Enforcement Commission's freezing of its bank accounts should act as an injunction if granted.

Judge Evans Hamaundu said in a ruling delivered yesterday morning that while he would grant Zamtel leave to commence judicial review proceedings, this order shall not operate as a stay of execution of the seiziure of the company accounts.

The security wings last week seized bank accounts belonging to Zamtel as part of a money-laundering investigation.

A Cabinet meeting of January 4, 2011 resolved to seize the 75 per cent stake held by the Libyan company, LAP GreenN, an investment wing of the Sovereign Wealth Fund used by fallen Libyan tyrant Muammar Gaddafi in spreading his hegemony on the continent as he sought to rule Africa.

[Fallen tyrant? He wasn't a 'tyrant' and he didn't 'fall'. He was illegally overthrown by NATO, so France and the UK could get a bigger part of the Libyan people's oil. - MrK]

On Monday, finance minister Alexander Chikwanda said the government would take back a 75 per cent stake in the country's sole total telecommunications in a decision made to "restore Zamtel back to the people of Zambia".

Under its previous government, former president Rupiah Banda's influence in abusing and circumventing set government institutions and procedures aided RP Capital to ensure LAP Green Networks bought Zamtel despite not being fit to run the country's total telecommunication provider.

The sale of Zamtel was initiated by former communications minister Dora Siliya and former president Banda's son Henry with RP Capital of Cayman Islands.

The sale saw Siliya's antics and manoeuvres which saw her disregard legal advice of the Attorney General's chambers and often chased top government and quasi government officials who disregarded her sworn trajectory over the sale she orchestrated.

ZDA was "pressured" to sell three quarters of Zamtel to LAP GreenN" despite the Libyan company having failed all three of the mandatory prequalification criteria.

The report also stated that Lap GreenN lacked the minimum three million subscribers as required by ZDA as LAP GreenN had no subscribers to itself, its holding company or its parent company.

The report stated that LAP GreenN had no audited accounts. Despite the government selling Zamtel to LAP GreenN for US$257 million, prior to privatisation, Zambia paid US$120 million for tax shares in Zamtel, and a further US$214. 45 million for investment shares.

"GRZ effectively paid Zamtel US $334.45 million to retain 100 per cent of its shareholding in Zamtel immediately prior to privatisation," the report read in part. "It is most perturbing that the GRZ decided to pay for the 25 per cent shareholding it already owned in Zamtel and paid a total US$334.4 million in what was termed as Tax Shares and a Subscription Amount."

On the other hand, Lap GreenN only paid US$257 million for 75 per cent shareholding of which the government was only entitled to US$42.6 million about 16.6 per cent of the value.

The net effect of this deliberately complicated transaction was that Lap GreenN took over Zamtel as a debt-free company with US$64 million sitting in its bank account with the US$64 million having been provided by GRZ and equivalent to the exact sum of money required for the newly-privatised company's capital expenditure for its first year of operations.

The report stated that the sale of Zamtel was fraught with irregularities in the tender processes, coercion in the acquisition of Zesco's assets, bad faith with the selection criteria, negligence in the management of the account of GRZ net proceeds, and a failure to monitor post-privatization.

The commission of inquiry led by Zulu, the justice minister, revealed that RP Capital was so powerful that it used to draft speeches former president Banda made on Zamtel as well as ministerial statements on the US$257 million sale of 75 per cent of Zamtel to Lap GreenN.

The report detailed that key government institutions like Zambia Development Agency (ZDA) and Zesco made decisions and abrogated their normal tender procedures as well as normal way of doing business because they "may have been under duress".

The report revealed that in some cases, officials who resisted the influence from Banda's aides were dismissed from their positions rampantly.

The report points out a case of Cyprian Chitundu who was fired from Zesco and replaced by Ernest Mupwaya for resisting the seceding of the Zesco optic fibre network to Zamtel to feed into the directive by RP Capital. Chitundu has since been reinstated as managing director of the power utility.

Labels: CORRUPTION, DEC, EVANS HAMAUNDU, LAP GREEN, MICHAEL SATA, RUPIAH BANDA, SITUMBEKO MUSOKOTWANE, ZAMTEL

posted by MrK @ 2:50 PM