Maravi

(LUSAKATIMES) Zamtel report shows that RP Capital official issued instructions and drafted presidential speeches

COMMENT - According to this article in the New York Times, Peter Heilner of RP Capital Partners structured the ZAMTEL sale. (NY Times) Privatization of Zambian Phone Company Degenerates Into a Feud, By MATTHEW SALTMARSH

Zamtel report shows that RP Capital official issued instructions and drafted presidential speeches
TIME PUBLISHED - Monday, January 16, 2012, 11:07 am

THE report by the Commission of Inquiry into the sale of Zamtel has revealed more anomalies, including one in which an official from RP Capital Partners of Cayman Island, issued directives to high ranking senior Zambian Government officials and drafted ministerial and presidential speeches on matters surrounding the Zamtel deal.

The 112 paged report states that the committee tasked to probe the sale of Zamtel discovered numerous e-mail correspondence from a Peter Heilner, issuing directives to senior Government, Zambia Development Agency (ZDA) and Zamtel officials.

“The committee has uncovered numerous email correspondence from RP Capital’s Peter Heilner issuing directives to high ranking and senior GRZ, ZDA and Zamtel officials, set timetables and tasks, drafted ministerial and even Presidential speeches and letters and orchestrated the deployment of personnel to strategic positions and departments,” the report reads.

The report states that it was clear from the outset that RP Capital, the transaction advisors in the Zamtel deal through Mr Heilner,single-handedly planned, managed, drove, controlled and executed the entire process.

The report says the Government, ZDA, Zambia Information Communication Technology Authority (ZICTA), State House staff, Zamtel and many others were reduced to the role of mere spectators with little or no input and control over the process.

The report says that audited Zamtel accounts dated March 31, 2009 peg the book value of the company’s fixed assets - that is only the property, plant and equipment at US$81 million (K412,072,000,000).

The report states that the $81 million is just a book value and not the market value of Zamtel’s fixed assets which would be expected to be considerably higher than that.

“The committee finds it difficult to understand how RP Capital advisors could arrive at a value of Zamtel’s fixed assets of $38 million in the absence of conducting a thorough, detailed and professional valuation of Zamtel’s fixed assets,” the report reads.

The Government further decided to pay for the 25 per cent shareholding it already owned in Zamtel and paid a total $334,440,000 in what was termed as Tax shares and subscription amount while Lap Green only paid $257 million for the 75 per cent shareholding of which the Government was only entitled to $42.6 million translating to 16.6 per cent of the sale value.

The Government has to date only received a cash sum of $15 million and that RP Capital received more than $12.6 million based on 5 per cent of $257 million.

[5% of 257 million is $12.85 million, not $12.60 million - a difference of $250,000 - MrK]

The report reveals that the Zesco optical fibre network assets valued at approximately $20 million was given free of charge to Zamtel.

Lap Green also took over Zamtel as a debt free company with $64 million sitting in its bank account which was provided by the Zambian Government.

And giving examples of correspondence, Press releases and speeches prepared by RP Capital’s Mr Heilner for the Government, the report attached a letter drafted by him and signed by former president Rupiah Banda on November 9, 2009 to Chinese President, Hu Jintao, asking for a loan from the China Export and Import Bank.

In the draft letter, Mr Banda was asking his Chinese counterpart to assist the Zambian Government obtain $75,424,323 concessional loan from the $10 billion programme for infrastructure in developing countries to cover the amounts owed to Zamtel’s Chinese equipment suppliers, Huawei and ZTE for projects that the two companies were in the process of completing.

“I write to you to request your assistance in a matter that is of national importance to the Republic of Zambia. As you may be aware,the Government of the Republic of Zambia is currently in the process of privatising Zamtel which has severely under performed in recent history.

“This privatisation will revitalise the telecommunications sector in Zambia through increasing investment and will contribute substantially to the development of Zambia as whole,” read the letter drafted by Mr Heilner on behalf of former president Banda to President Hu.

The letter stated that the sale of Zamtel was of considerable urgency in order to ensure the success of the company and on-going development of Zambia.

“I would like to request your support in obtaining approval from the China Export and Import Bank in respect of Zambia’s application,” the ?letter read.

Another document drafted by Mr Heilner was a Press statement by the then minister of Communications and Transport, Geoffrey Lungwangwa, on the ICT sector in Zambia.

In the statement allegedly written for the minister by Mr Heilner,Professor Lungwangwa said that the government and the communications Authority of Zambia (CAZ), ZICTA, had set out two ways in which they intended to encourage the deployment and usage of ICT products and services in Zambia.

Prof Lungwangwa said the first was through careful management of the licensing regime and that CAZ intended to issue no additional fixed or mobile licenses for the foreseeable future.

He said the second was through pricing and that CAZ intended to use its powers as set out in the new ICT Act to intervene in the wholesale market that existed between telecommunications operators.

Mr Heilner is also alleged to have provided answers to parliamentary questions, Order number 760, where questions concerning how much money the Government ministries and departments owed Zamtel immediately prior to the acquisition by Lap GreeN and how Lap GreeN intended to recover the debt.

The other question was on the total value of Zamtel assets at the time of privatisation.

[Times of Zambia]

Labels: RP CAPITAL PARTNERS, ZAMTEL

posted by MrK @ 7:42 PM