Maravi

Provide proof Zamtel sale was a fraud - Musokotwane

COMMENT - Zamtel had 'few and obsolete assets'? How about it's realestate holdings? And why did the Zambian government pay more for it's 25% shares than it received selling the 75%? Why did it pay anything for it's 25% holdings AT ALL? It already owned ZAMTEL. Situmbeko Musokotwane is a crook, who oversaw the plunder at ZCCM-IH, which should be receiving at least $300 million a year in dividend payments, instead of the first time ever $18 million last year. He did away with the Windfall Tax, which has cost Zambia at least $1 billion a year in uncollected mining industry taxes. He needs to be in prison.

Provide proof Zamtel sale was a fraud - Musokotwane
By Masuzyo Chakwe
Sat 14 Jan. 2012, 14:40 CAT

FORMER finance minister Dr Situmbeko Musokotwane has challenged the PF government to provide proof that there was illegality and fraud in the sale of Zamtel.

Commenting on the intended reversal of the Zamtel sale, Dr Musokotwane yesterday said Zamtel would be nationalised if the government implements its threat because LapGreen already owns 75 per cent of the company. He said this would be the first time in more than 30 years that the state nationalises a company.

"The PF want to nationalise Zamtel because they claim it was illegally and fraudulently sold to LapGreen. This is what they have always said even during the process of selling Zamtel when they were not yet in government.

"They raised similar objections when Zambia National Commercial Bank was being privatised and, in fact, they organised and held public demonstrations to support them," he said.

Dr Musokotwane said on assuming office, President Michael Sata appointed a commission of inquiry on the sale of Zamtel.

Dr Musokotwane said sadly, as in many other commissions, an opportunity was lost in failing to appoint independent commissioners who would have provided non-biased views on the matter.

"Instead, the Minister of Justice himself and other politicians were appointed to head this commission.

Since these politicians are fully aware of the public pronouncements made by the President that the sale of Zamtel was fraudulent, it cannot surprise anyone that their report had to be in the same line of thinking or else they would have been sacked from their jobs," he said.

"Now that the PF is in government with full access to information on the sale of Zamtel, let them go beyond their usual vague and loose accusations that Zamtel was illegally and fraudulently sold.

Let them provide point-by-point proof to back their assertions. Let them, point by point, state what the law and relevant regulations say about privatisation and let them, on the same points, show where violations were made," he said.
He said Zambians by now had come to learn that the PF were very economical on truth.

"The PF promised jobs for all youths within 90 days of being in office. Not true. They promised money in our pockets in 90 days. Not true. They promised to restore the Barotseland Agreement of 1964 in 90 days.

Not true. They promised to raise minimum wages. Not true. They promised a new Republican constitution in 90 days. Not true, and so on, and so forth. With this track record of being deliberately untruthful, Zambians are well advised to demand proper and detailed explanations from the government. To believe or accept statements from a government that is known for being untruthful is dangerous for our country," he said.

Dr Musokotwane said in order for the PF government to convince Zambians that the sale of Zamtel was not done in the best interest of Zambia, it should refute findings of the audit report on Zamtel by Ernst and Young, a reputable international firm of auditors which found Zamtel to be insolvent with enormous and unsustainable debts against few and obsolete assets.

"Let the PF, point by point; indicate the illegality and fraud, which was committed in the sale of Zamtel. As illegality and fraud is the main point they have used to persuade the public of the need to reverse the sale, it is important that the public should demand that the government goes beyond generalities to provide specifics of wrong doing," he said.

He said the PF alleged that Zamtel was sold at an undervalued price.

"They can prove this to the Zambian public if they release the audit report on Zamtel from Ernst and Young and let's see if that report ascribes a value for Zamtel that was higher than the price government sold the company for. What us as MMD know is that the auditors ascribed negative net worth whereas the price obtained after the sale was much higher," he said.

Dr Musokotwane said the government had access to the Zamtel valuation report by RP Capital and should take a reasoned position on it and indicate thereafter if the final price obtained for Zamtel was lower than the value in the RP Capital.
"We know it was higher. But above all, valuation reports are just reports.

The actual true value of anything is only determined when serious buyers indicate the price they are prepared to pay for an item …" he said. "The price that was paid for Zamtel at $257 million, all of which was received long ago in the country, was very good for a company that only before then was assigned a negative value."

Dr Musokotwane said the price was the best that Zambia had ever received for any parastatal company ever sold and was more than seven times that paid for units of ZCCM when it was sold to become KCM.

He challenged the PF to provide well reasoned out arguments to refute this.
Dr Musokotwane said by threatening to nationalise Zamtel and even ZANACO where they were establishing yet another commission of inquiry, the government was playing a very dangerous game that would push the economy backwards.

"To start with, nationalising Zamtel means the taxpayer must compensate LapGreen. Given the price they paid for the company, the extra investments they have made since then and the positive turn around in the business, the compensation demanded could be anywhere between $400,000,000 to $1 billion. We can't be sure whether this money will ever be recovered because in accordance with the PF manifesto, they will choose party cadres to manage the company.

How will the company then remain profitable and protect jobs?" he asked.
He said, "This type of arbitrary action damages the reputation of Zambia as a destination for investments.

It has taken more than 20 years to build confidence in the investor community that an investment made in Zambia is free from political seizure. This confidence was getting to maturity hence the billions of US dollars that poured into our economy to revive and expand mines, build hotels and establish farms. This very basis for creating sustainable jobs has now been shaken badly even by the mere threat to nationalise Zamtel."

Dr Musokotwane said Libya was part of the capital-rich Middle East including Saudi Arabia, Kuwait, Dubai and other Gulf Emirates which was exporting capital all over the world creating jobs for young people.

"Now we are busy spoiling all this and we expect to develop our country and create jobs? Will it then surprise us when the value of our currency begins to lose value quickly as it is doing now because the public is getting nervous about the safety of their money while those planning to invest hold back the inflows of their money into Zambia due to similar fears?" he said.

"I appeal to the government once again to settle down, sober up and focus on developing our country. Creating a mindset within ourselves that focuses primarily on hunting for mistakes committed by the previous government even where there is no justification for doing so just slows down the country. Let those same energies now focus on how to develop industries, infrastructure, jobs, and business opportunities."

He advised the government to respond to the rumour going around that the real motive for wishing to nationalise Zamtel was because they already have a preferred buyer that they would want to sell the company to.

"As this could be very damaging to the reputation of Zambia as a country where rule of law and transparency are respected, it is important for government to pronounce itself clearly on the matter," said Dr Musokotwane.

Labels: CORRUPTION, SITUMBEKO MUSOKOTWANE, ZAMTEL

posted by MrK @ 7:46 PM