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Reversing Zamtel sale will be in national interest - Kashita

Reversing Zamtel sale will be in national interest - Kashita
By Mwala Kalaluka
Tue 17 Jan. 2012, 13:50 CAT

FORMER communications minister Andrew Kashita says reversing the MMD government's sale of Zamtel's 75 per cent shares to Lap Green Network of Libya would be in the national interest because the transaction was done illegally.

Commenting on government's imminent reversal of the previous MMD government's sale of Zamtel to a Libyan company, Kashita wondered what was wrong with some leaders from the MMD who were now defending foreigners against national interest.

Kashita said Lap Green Network did not bother to follow the legal processes when buying Zamtel because someone in the echelons of power must have assured them that all would be well.

Kashita said the Zambia Development Agency ZDA Act number 11 of 2006 lays the procedure of how State-owned enterprises could be privatised or commercialised but that the Act was not followed in the case of Zamtel.

"The Act gives the power of functions to the ZDA to plan, manage...in other words to oversee all aspect of privatising state enterprises. All the government should do is to say we have decided to privatise such and such an organisation," Kashita said.

"ZDA is under the Act empowered to see how to proceed with the privatisation. The procedure to be taken is also laid down in the Bill or in the Act, right through from the time they have to invite valuation advisors."

Kashita said ZDA had to ensure that open and transparent steps were undertaken during the valuation stage.

"All these things were totally ignored...any international company or any company wanting to buy business in another country has a duty to learn and confirm with knowledgeable local people what procedure should be," Kashita said.

"Lap GreenN should have found in Zambia something about the Law, they did not bother, somebody must have told them not to bother."

Kashita said the MMD government went further to select little-known RP Capital of Cayman Island to value Zamtel when it did not ask any local surveyor to carryout the valuation.

Kashita said what worried him most in the Zamtel transaction was that the people that were supposed to safeguard national assets maintained some strange silence while two senior public legal officers, Mumba Malila and Dominic Sichinga, were removed from their positions for standing up.

"Because of the failure to follow the steps that should have been undertaken under the Law and the strange silence by what I call the gatekeepers, it raised a lot of noise, people were complaining about it. There were discussions and questions raised in Parliament but government went straight through and sold," Kashita said.

"They are claiming even today that the company was insolvent, it had a huge debt...the biggest problem Zamtel has, like Zampost, like Zesco is that the government itself as the biggest consumer of services never pays up so debt goes up."

Kashita said he did not believe that the value of Zamtel was what was declared at the time the government announced the sale of Zamtel to Lap GreenN.

"Justice Dennis Chirwa in his inquiry discovered all the flaws that had taken place but incidentally out of all the people who appeared as witnesses in that inquiry there was not one from ZDA," he said.

"Those saying that if we try to reverse the sale we shall pay compensation, which will be very heavy, how do they know? Because Lap GreenN had a duty to discover what the law is."

Kashita said his expectation was that if Lap Green Network was a prudent international company, it should have sought an indemnity from the government that would have allowed it to recover their money if something went wrong.

"They should have known that the law did not allow them to do the way they did it and if they say they didn't know, its their duty as international financiers to know wherever they are what the local practices are and ignorance is not a defence," said Kashita.

"In sum, the decision to reverse the sale is good but it must be because of the Zambians' interest... If Lap GreenN want to show that they were right to own what they bought, can we please ask the question, did they know about this ZDA Act and its procedures, why didn't they insist that it be followed?"

According to the commission of inquiry set by President Michael Sata to investigate the sale of Zamtel, 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 company.

The report gives a lowdown on Dora 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.

The report revealed a deliberately complicated transaction to siphon money from Zambia and stated that 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.

Labels: ANDREW KASHITA, CORRUPTION, LAP GREEN, ZAMTEL

posted by MrK @ 6:29 PM