Maravi

Ministry of Finance had no role in privatising Zanaco - Magande

Ministry of Finance had no role in privatising Zanaco - Magande
By Kabanda Chulu
Sat 04 Feb. 2012, 13:01 CAT

NG'ANDU Magande yesterday told the Commission of Inquiry into the sale of Zanaco that he was not sure if the US$ 8.25 million paid by Rabo Bank for acquisition of 49 per cent shares went to the Treasury account.

And Copperbelt University Professor Juvenalis Tembo has said the negotiating team was not involved in determining the price of selling Zanaco shares and selection of the preferred bidder (Rabo Bank).

Magande, who was finance minister during the partial privatisation of Zanaco, could not give categorical answers to some questions that were asked during his submissions to the Commission.

He explained that the role of the finance minister in the process of privatisation was to sign away government assets held in state-owned enterprises that were sold.

"I signed the sale and purchase agreement, shareholder agreement and management services agreement and I used to sign many other agreements giving away government assets bearing in mind that the documents were prepared by technical people at ZPA and that the Attorney General has endorsed them," Magande said.

"The finance ministry had no role in privatising Zanaco and it was convinced that ZPA negotiators would come up with a good price so I never got into details on how they arrived at US$8.25 million."

When asked why he did not show interest in selling of state-owned enterprises (SOEs) especially Zanaco considering that the minister of finance is the custodian of government assets, Magande responded that his office was too busy to know full details of the transaction.

"Privatisation was not a subject matter of the job description that was given by the appointing authority and the process involved selling of over 300 SOEs so I would not look into the detailed transaction of each company. Besides the ministry of finance has no officer to undertake valuation because there is the government valuation department," Magande said.

"Bulk documents were brought to my office and I just signed and with Zanaco I signed the conclusion of the sales agreement though I was not part of the negotiations and US$8.25 million was too little to get my attention since I focused on much bigger things like the budget overrun that had occurred during that period and putting in place measures to ensure that the US$7.1billion debt was cancelled."

When asked how proceeds from privatisation were used and if at all Rabo Bank paid for the acquired shares, Magande said the privatisation Act had guidelines on usage of the funds.

"Money was paid by Rabo Bank but I am not sure if it went into the treasury or if an account was opened elsewhere," he said.

When asked if he played any role in the privatisation of Zanaco, Magande responded that he was briefed by the Zanaco chairman and other officials.

"I never interfered because it was not within my responsibilities and when they concluded negotiations the ZDA brought documents and I signed and also there was time when Vedanta bought KCM, again they brought documents saying this is urgent and I signed and I was aware about some concerns raised by stakeholders but I passed them over to ZPA officials," said Magande.

And founding chairman of Zanaco Andrew Kashita said the defective privatisation process of Zanaco must not be blamed on Rabo Bank but on Zambian negotiators who lacked national interest.

"We demand the publication of the valuation report and the technical and sales agreements. It is also difficult to understand why our people settled for this deal," said Kashita.

And Prof Tembo said he was appointed chairman of the negotiating team when Rabo Bank had already been selected as the preferred bidder.

"We were not involved in the selection of the bidder and we don't know how they arrived at the value price because we were just told to go and negotiate but terms and conditions had already been agreed so my team was just editing and not really negotiating," said Prof Tembo.

Labels: MINISTRY OF FINANCE, NG'ANDU MAGANDE, PRIVATISATION, ZANACO

posted by MrK @ 3:32 AM