Malila justifies reversal of Zamtel sale
By Mwala Kalaluka
Sun 08 July 2012, 13:25 CAT
PRESIDENT Michael Sata's decision to reverse the sale of Zamtel to Lap GreenN was without malice and done in public interest, says Attorney General Mumba Malila in his skeleton arguments following the latter's petition against the transaction's reversal.
Malila said Lap GreenN's petition against the decision by government to compulsorily acquire 75 per cent shareholding in Zamtel should be dismissed with costs because it is premature. He said President Sata's action was done in the public interest, without malice and was reasonable in the circumstances of the case.
This is in a matter where Libya's Lap GreenN has challenged a decision by the government to reverse the sale of 75 per cent shares in Zamtel.
According to skeleton arguments filed before Lusaka High Court judge Albert Wood on Friday afternoon, Malila said Lap GreenN commenced its action against the government without exhausting the legal procedures provided.
He submitted that the government's decision on Zamtel was legal and has met all the relevant procedural requirements.
Malila said the decision fell within a species of action called Eminent Dormain which exists in most democratic societies.
He said since President Michael Sata scrupulously followed the procedural steps, there was no ground on which LapGreenN could fault the government.
"The petitioner contends that there was procedural impropriety on the ground that it was not heard before the President made up his mind. The right to be heard is not absolute and must be considered in light of the provisions of the law," he said.
"We submit that on the authorities and upon a fair reading of the Act there was no procedural impropriety on the part of the President."
Malila said the acquisition of 75 per cent shareholding in Zamtel by LapGreenN was extremely controversial.
He submitted further that the issue of compensations was never discussed by the parties before the matter was brought to court.
"We submit that the petitioner has commenced this action without exhausting the procedure provided for under Section 5 2 and 11 of the Act," said Malila.
"It is only after that procedure has been exhausted that an aggrieved party can commence proceedings before Court. In short, this action is prematurely before this Court and it should therefore be dismissed with costs."
Labels: LAP GREEN, MICHAEL SATA, MUMBA MALILA, ZAMTEL
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Court's decision over Zamtel is ‘troubling' - LAP GreenN
By Chiwoyu Sinyangwe
Sun 15 Apr. 2012, 13:28 CAT
LAP Green Networks of Libya has described as "troubling" the Lusaka High Court's rejection of its plans to halt government operating the total telecommunications provider.
LAP GreenN, whose controversial ownership of three quarters of Zamtel was aborted by the PF government last January, had sought the Lusaka High Court's intervention to prevent the government from dealings that would be adverse or prejudicial to its 75 per cent shareholding in Zamtel.
The firm which bought Zamtel for US $257 million in 2010 in a deal criticised by key stakeholders has sued the Zambian government before the Lusaka High Court, demanding, among other things, that its 75 per cent equity in Zamtel and the management control of it, is returned forthwith, failing which it seeks market-value compensation in the amount of US$480 million.
But High Court judge Albert Wood dismissed with costs Lap GreenN's application for an order of interim relief on the ground that an order for interim relief in whatever form it was being sought should be granted before the hearing and determination of the petition.
Judge Wood said the correct position was that the application should be heard and determined first before an order, writ or direction is issued for purposes of enforcing or securing the enforcement of any provisions.
Reacting to judge Wood's ruling, LAP GreenN which a fortnight earlier had sought the Lusaka High Court's declaration that the procedure used to compulsorily acquire the shares was improper, unreasonable and unlawful, contrary to Article 16 of the Constitution vowed to "vigorously pursue" its full legal rights despite the latest setback.
"While we have stated previously that we hope the government will see that their actions are not in the interests of either Zamtel or Zambia and that reason will prevail, last Tuesday's decision is troubling,"
the investment wing of the Libyan government stated. "Basic safeguards
and reassurances to protect our shareholdings should be in place until
this case is resolved."
LAP GreenN stated that although it prefers that Zamtel and its equity in it is returned to the company, it would seek damages if its desire was not granted.
"We prefer its equity in it is returned to us so that LAP GreenN can resume making its important contribution to the Zambian people and the Zambian economy," stated Lap GreenN.
"However no one should be in any doubt that we will vigorously pursue our full legal rights and interests in Zamtel through the courts both in Zambia and internationally, until we have satisfaction."
Labels: CORRUPTION, COURTS, LAP GREEN, LIBYA
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COMMENT - LAP Green did not pay $256 million for ZAMTEL, they received $75 million, courtesy of the Zambian taxpayer. Add to that the way the new Libyan government came to power, on a wave of violence and the murder of the head of state, and add to that their human rights violations, especially of Africans of Libyan and continental descent. And I will say - no way. There are islamist terrorists in their government and military command. I don't see the West lining up with their business interests either.
LAP Green promises long legal battle over Zamtel
TIME PUBLISHED - Thursday, April 12, 2012, 6:12 pm
Libya’s LAP Green Network has promised a long legal battle both in Zambia and internationally over its seized 75% shareholding in Zamtel.
The Libyan firm which bought Zamtel for $256 million from the previous MMD government before the PF government reversed the sale, says in a statement released to QFM News that no one should be in any doubt that it will vigorously pursue its full legal rights and interest in Zamtel through the courts in Zambia and internationally, until they have satisfaction.
LAP Green has described the Lusaka high court’s decision on Tuesday to throw out its request to freeze its 75 percent shareholding in Zamtel as troubling.
It says its request was to ensure that the Zambian Government does nothing with its shares as it has been reported it might, until the matter has been properly settled by its Petition in the courts.
LAP Green argues that basic safeguards and reassurances to protect its shareholdings should be in place until the case is resolved.
It adds that its preference is that Zamtel and its equity is returned, so that it can resume making its important contribution to the Zambian people and the Zambian economy.
The Lusaka High Court will hear LAP Green’s Petition on 9th July 2012.
QFM
Labels: CORRUPTION, COURTS, LAP GREEN, ZAMTEL
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COMMENT -
Sue them back. They received ZAMTEL for free, and were given $75 million on top of that, courtesy of a $77 million loan from China. The MMD is corrupt as hell, and there is no way the PF government should honour their corrupt deals, let alone be sued by scum like the new Libyan government. They came to power through the murder of their head of state, and have committed atrocities against their local African population. To hell with them.
LAP Green demands $480 million in Zamtel compensation
TIME PUBLISHED - Monday, March 19, 2012, 6:52 pm
LAP Green Network, the Libyan Investment Authority’s international telecommunications arm has challenged the Zambian Government’s action to seize its 75% share in Zamtel. In the petition filed in the Lusaka High Court today, LAP Green outlines it right to financial compensation for the value of the asset at the time of seizure should the shareholding not be restored to it, which is calculated to be US$480 million.
The Libyan firm is additionally claiming for substantial losses it has suffered as a result of the seizure of the shares. LAP Green Network disputes the legality of the Zambian Government’s claim that LAP GreenN’s shares were taken for ‘public purpose’.
Wafik Al-Shater, Chairman of LAP Green Network, contends that it is very clear that the seizure of LAP Green’s shareholding in Zamtel by the Zambian Government was illegal and unconstitutional, and to the detriment of both Zamtel and its customers.
Mr Al-Shater in a statement released to the media says in the 18 months that Zamtel was under LAP Green’s management, it increased its total subscriber base by 600% to over one million at the start of 2012 and significantly increased the company’s market share, leading to a 50% increase in revenues.
He adds that the growth and prosperity that Zamtel saw under LAP Green’s management was unprecedented.
He explains that through major improvements and upgrades in systems and infrastructure, including a 100% increase in the number of base stations, LAP Green Network improved network performance and established a far superior service for Zamtel’s customers.
Mr Al Shater says LAP Green took a bankrupt company and developed it into a strong telecommunications provider able to deliver real value to all shareholders, to serve the Zambian people and to contribute directly to the Zambian economy sustainably into the future.
Mr Al-Shater says LAP Green is compelled to take this course of action as dictated by the procedure set out in Zambian law.
He adds that it is sincerely hoped that reason can prevail, and that LAP GreenN can resume making its important contribution to providingtelecommunications services to the Zambian people.
Mr Al-Shater however, states that to recover the company’s significant investment in Zamtel, LAP Green will consider any and all legal options available, if necessary, whether in Zambia or in other jurisdictions.
QFM
Labels: LAP GREEN, LIBYA, ZAMTEL
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Bye Bye Lap Green, It Was NOT Nice Meeting You.
TIME PUBLISHED - Sunday, February 5, 2012, 2:28 pm
By Maurice Makalu
I thought I could share some important information from around Africa about the FORMER owner of Zamtel, in case some of you miss them. And just by the way, I would like to appeal to those who have been scared by some UK legal expert who said Zambia could pay as much as $3 billion in penalties to please chilax. He was just bluffing, probably because he wished he could make some money from Lap Green’s losing battle. You know lawyers and their marketing: threats and intimidation to the opponent!
If there are any who are indeed scared by that expert, it is simply because they have not read the sound legal arguments, facts and exhibits in the Sebastian Zulu report. So their ignorance is causing the fear and it is being exacerbated by politicians of doom and gloom. If not that then they are scared simply because they feel inferior to “UK people.” So it is “UK” that is scaring them.
Here is Lap Green for you….from around Africa.
1. UGANDA – 16 Dec 2011
“Uganda Telecom Ltd (UTL) will receive capital from the Libya Africa Investment Portfolio Green Network (LAP Green Network), which owns 69% of the telco, according to local news source The Observer. LAP Green Network’s new board chairman Wafik Shater said ‘We are currently looking at UTL’s critical funding need for the remainder of this year. After ascertaining the actual funds required, we will inject them into our operations here.’ UTL has suffered indirectly as a result of sanctions imposed on LAP Green Network by the UN during Libya’s civil war, worsening the telco’s already substantial debts.”
Lap Green took over UTL in July 2007. So, by the time of UN sanctions in March 2011, UTL under Lap Green management was ALREADY in WORSENING substantial debts. In March 2011 UTL’s network was disconnected from MTN Uganda over $8.27 million in disputed interconnection fees. Service has resumed but the matter is still in court. In September Airtel Uganda threatened to follow suit, over a further $4.2 million in payments.
So when you hear anybody say Lap Green Uganda is a success story, know they are just lying. Pray for them to show some love for mother Zambia.
2. RWANDA – April 2011
“Rwanda is looking for suitors for national carrier Rwandatel after the government stripped Libya’s LAP Green Networks operating license last month (March 2011). The Rwandan government stripped LAP Green Networks of the license for failing to meet key performance targets in terms of investment, network roll-out, coverage and quality of service. Although Rwandatel acquired its operating license in 2007, it only started mobile operations in December 2008.”
UN Sanctions were imposed on Libya on March 29,2011, so they were not the cause for Lap Green’s failure to pay. As at January 2012, a Rwandan court ordered that Rwandatel be liquidated. Lap Green is joining the line of chancers to take over Rwandatel.
3. NIGER – June 2011:
“Niger’s government has canceled an agreement for LAP Green Network of Libya to buy 51 percent of state-owned telecommunications companies Sonitel and Sahel Com, said Salifou Labo Bouche, communications minister. We are currently looking for another buyer,” the minister said on national television yesterday. The decision comes after the government “waited in vain” for a payment from the Libyan company, he said.”
The agreement was signed in Jan 2011, so for 6 months, Lap Green couldn’t pay. We can’t even use the excuse of a civil war because in Jan 2011, Libya was peacefully under Gadhaffi. Only Tunisia was in flames.
4. ZAMBIA – January 2012
So if Lap Green is such a calamity in other countries, how did it manage to succeed so quickly in Zambia? Several reasons:
(a) Zamtel had the best infrastructure amongst all of Lap Green’s acquisitions in Africa.
This is really the main reason. This is shown by the fact that when ZDA announced the privatisation of Zamtel in mid 2010, it said Lap green would invest $127 million over three years following privatisation. Mr. Hans Poulsen, then CEO, was quoted as saying, “The investment will mainly go into restructuring the company; acquiring new technology, building a 3G network, extending network coverage and at the same time re-launch the brand.”
However, in January 2012, newly appointed Chairman of LAP Green, Wafik Alshater, said, “Zamtel is now a Zambian success story. Since LAP Green’s acquisition, the telecommunications company has attracted over 400,000 new customers and grown its market share from 3% to 11%. Lap Green has committed itself to investing US$129 million (ZK670 billion) in Zamtel over two years so as to create a truly competitive and world class telecommunications company.”
This means by January 2012, that $129 million investment was yet to be done. So the success from 2010 to date was on already existing Zamtel infrastructure.
(b) This best infrastructure was given to them on a silver platter.
In addition to receiving the gift of $64.25 million (money for 25% shares) from government to fund its first year operations, government settled its telephone bills which at acquisition amounted to $7 million and at the time of the Zulu report, only $100,000 was outstanding. So in just over a year, government gave Lap Green $71 million free of charge. On top of that, it cancelled tax liabilities amounting to $100 million. Furthermore, Lap Green did not pay the $257 million in full. Instead $64 million of that was to be paid as equity capital over three years.
So who on earth can fail to succeed when there is free money coming from all over?
(c) Zamtel only needed to retrench, not to “desperately” recapitalise, to become profitable. So whoever would have had the guts to fire its employees would have succeeded.
As at March 2010, Zamtel revenue was K385 billion, its staff costs were K253 billion. This was 65% of revenues compared to industry average of 25%. The loss at the same date was K104.8 billion.
So all somebody needed to do was to fire the excess 40% staff costs. This would have translated into cost savings of K154 billion (40% of revenue). The $71 million that was given to Lap Green could then have been channeled into retrenchment packages. Zamtel would have instantly become profitable, like it did under Lap Green, and the other creditors it had would have been settled, including the cancelled $100 million tax liabilities.
5. ZAMTEL: BEST PRIVATISATION DEAL IN AFRICA???!!!
Given the above, what did those politicians and “experts” mean when they told us to celebrate and be proud, saying, “Zamtel was the best telecoms privatization deal in Africa?”
They meant that out of 10, some got zeros, ones and twos; we were the only one with a three: the best among the worst.
6. LIBYA – 27 January 2012
Libya is undecided on the future of its African investments. Mohammed Abdul Aziz, Libya’s deputy foreign minister, admitted on Thursday that the National Transitional Council (NTC) does not yet know the exact extent of Libyan investments on the continent.
Earlier this month, Mustafa Abdul Jalil, the chairman of the NTC, said: “There may be investments that would be better for the Libyan people for them to be closed”. Abdul Jalil added, however, that Libya would increase its investments in Sudan, particularly in agriculture and property. “Reason and justice require us to direct agricultural investments close to Libya instead of the Far East or Central Asia,” he said.
7. CONCLUSION
Now you know. There is nothing to miss about Lap Green. Let us just calculate their change from whatever they spent, give them back and remain with OUR Zamtel. But also, let us not rush to mass re-employee in the name of “creating jobs.” That would be foolish!
Labels: LAP GREEN, LIBYA, ZAMTEL
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Malila defends Sata on Zamtel
By Maluba Jere
Fri 03 Feb. 2012, 14:01 CAT
ATTORNEY General Mumba Malila has submitted that the decision taken by President Michael Sata to compulsorily acquire 75 per cent shareholding in Zamtel does not fall within the parameters of unreasonableness and cannot be challenged.
He has asked the Lusaka High Court to dismiss with costs an action by Lap Green Networks, the former owners of Zamtel, in which they have asked the court to order for the reversal of the government's compulsory acquisition of 75 per cent shareholding saying the action is prematurely before the court.
Libyan-owned Lap GreenN has sued the Zambian government seeking an order of mandamus to compel the government to reverse its action of unilaterally taking away 75 percent shares in Zamtel which it said belonged to it.
This is in a case where Lap Green had asked the court for an order of certiorari to remove into High Court for Zambia to quash the decision by the government to unilaterally and unlawful reverse the sale of 75 per cent share in Zamtel to Lap Green.
Lap Green contends that the move by government was unfair, illegal and that the investigation committee set up to investigate the sale of share in Zamtel which government based its decision to reverse the shareholding was not binding and was unlawful because the said committee did not operate in accordance with the inquiries Act.
But Malila in his skeleton arguments in opposition to summons for leave to apply for Judicial Review pursuant to Order 53 of the Rules of the Supreme Court (White Book) 1999 edition, argued that the decision by the government to compulsorily acquire 75 per cent shareholding in Zamtel should be set aside because it was legal and correctly done within the law.
He said Lap Green's grounds had no basis at law and that the government decision to acquire the shares was legal, adding that it met all relevant procedural requirements.
He further submitted that the applicant had not placed before the court sufficient grounds upon which the court could inquire into the matter because it had not exhausted administrative processes for compensation under the lands acquisition Act chapter 189 of the Laws of Zambia.
"There is nothing exceptional about this case which would justify the applicant to commence his actions without exhausting the procedure provided for under Section 5 (2) and 11 of the Act," he said.
"Our contention is that this is an attempt by the appellant to disrupt the administrative process. Section 11 of the Act is explicit in that the claim by an interested party to be submitted to the minister is not limited to compensation claims but the other claims as well. It is only after such procedure has been exhausted that the applicant can commence proceedings before this court. In short, this action is prematurely before court and should be dismissed with costs."
Malila further stated that the decision by the government to compulsory acquire 75 percent shareholding in Zamtel falls within a species of actions called ‘Eminent Dormain' as such the court should not entertain the applicant's demands.
"Government followed the right procedure and the applicant has not stated any ground upon which the government can be faulted as regards the procedure laid out in the Act," he said.
"In fact my Lord, it is the applicant that has rushed to court without first exhausting all the procedures laid down in the Act which requires claimants to lodge their claims with the minister and present any claims to court only within six weeks after publication of the notice in the gazette as provided in section 11 of the Act.
And Judge Albert Wood who is presiding over the matter has ordered Lap Green to commence its action before the general registry and not with the commercial saying the matter was not of business nature.
Judge Wood stated that the matter was about the review of the decision making process rather than a review of the merits of a decision and that it could not possibly be commercial nature even though it may affect a commercial transaction.
This was after the state sought the court's guidance on whether LapGreen was correct to commence its action before the commercial registry.
Solicitor General Musa Mwenye submitted that the proceedings before court were for judicial review that emanated entirely from the decision of the government to exercise statutory powers under the Lands Acquisition Act Cap 189 of the Laws of Zambia.
But lawyer for Lap Green Vincent Malambo said what the state were seeking was shares in a commercial entity which shares were procured in all respects in the manner of commerce.
Labels: ATTORNEY GENERAL, LAP GREEN, MUMBA MALILA, ZAMTEL
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It doesn't make sense to defend LAP GreenN's corruption
By The Post
Thu 02 Feb. 2012, 13:00 CAT
LAP GreenN has been doing a lot of lobbying for support over the Zambian government's reversal of the corrupt sale of Zamtel. They have tried to get many Zambian opinion makers to speak for them, to oppose the Zambian government's repossession of Zamtel.
We can only hope that no money changed hands in this campaign.It is therefore not surprising that the Zambia Institute of Chartered Accountants on Monday opposed the reversal of this sale, describing it as "throwing the child with dirty water".
Hapenga Kabeta, the Zambia Institute of Chartered Accountants chief executive officer, said "despite the irregularities reported", the reversal of Zamtel sale might result in the country losing some public money to compensate LAP GreenN.
He further said that they "believe that LAP GreenN should have been engaged by the government with a view to reach a consensus that would give more benefits to the people of Zambia". Kabeta suggested that the shareholding of LAP GreenN in Zamtel be reduced from 75 per cent to, say, 49 per cent.
It is very difficult to appreciate why the Zambian government should be asked by the Zambia Institute of Chartered Accountants to go to bed, to get into business partnership with crooks, corrupt elements. LAP GreenN is not an innocent victim in all this.
They knew what they were doing with the Rupiah Banda regime. They were active and conscious participants in that whole corrupt deal. This was a Libyan parastatal company under the control and direction of the corrupt regime of Muammar Gaddafi. And accordingly, they got Zamtel corruptly - of course in collusion with an equally corrupt Zambian regime of Rupiah.
With all that known about the corruption of the Gaddafi regime and the equally corrupt dealings of LAP GreenN under the control and direction of that regime and the corrupt manner in which they acquired Zamtel, it is difficult to understand why any honest or decent person can ask the government of Michael Sata to simply leave that deal alone, do nothing about it or reduce the shareholding of LAP GreenN from 75 per cent to 49 per cent and continue to work with them as business partners.
We know that the Zambia Institute of Chartered Accountants has not been a strong voice against corruption and other abuses of power or public office in the way the Law Association of Zambia has been. We also know that they have been very silent over the anti-corruption crusade that was initiated by Levy Mwanawasa. They don't have a track record of speaking strongly against corruption. We don't have a reason for this.
Fighting corruption and abuses or crime in general cannot be reduced to a mere profit or loss issue. There is much more to fighting crime than making a profit.
If fighting crime could only be done on the basis of a profit and loss account, we would have long closed our prisons and we would have no police because this is not a profitable undertaking in the accounting sense. Sometimes it costs the state billions of kwacha to chase one murderer, criminal. But at the end of the day, the person whose life has been lost is never brought back to life - nothing is recovered.
We have heard this type of argument before. The defenders of corruption and corrupt elements used to band these arguments around during the Levy days. They used to argue that more money was being spent chasing corrupt elements than the recoveries that were being made.
We are hearing a similar argument over LAP GreenN and Zamtel today. So if one steals and the cost of chasing or recovering what he has stolen is higher than what will be recovered, then they should be allowed to keep their loot!
A different society doesn't operate this way. A different society operates on the basis of principles, values and standards and not necessarily on the basis of an accounting profit. There is a price to be paid for holding certain values, principles or standards.
And as we have stated before, the individual does better in a community with common values, principles and standards. And the individual does worse in a society without values, standards or principles. There is a price to be paid for the establishment and maintenance of a different society. We keep people in prisons not because there is an accounting profit to be recorded by keeping them there.
Michael and his government had no other different alternative to the repossession of Zamtel from LAP GreenN. There is no way LAP GreenN should have been allowed to keep the proceeds of corruption.
It doesn't make sense for anyone to argue that LAP GreenN got into a legitimate deal with a legitimate Zambian government and this deal, good or bad, favourable or unfavourable, palatable or unpalatable, should therefore be honoured.
This is not the issue. The issue is not whether the deal was favourable or not favourable. The issue is that there was corruption in the whole transaction. And LAP GreenN was aware of what was happening, was party to the corruption, to the fraud. They knew very well what they were doing.
It was not simply the case of corruption on the Zambian government officials' part only. Elements from the Zambian government and from LAP GreenN or Libyan government connived to steal Zamtel from the Zambian people. There is no amount of lobbying that will save this corrupt transaction and make it good.
If the Zambia Institute of Chartered Accountants sincerely believe that LAP GreenN did nothing wrong, why are they suggesting that their shares be reduced from 75 per cent to 49 per cent in a negotiated settlement with the Zambian government? Why should they be made to lose that which they legitimately, innocently and decently acquired for value? To suggest that, in itself is an admission by the Zambia Institute of Chartered Accountants that they know, in their heart of hearts, that LAP GreenN was not an innocent party, an innocent victim in this deal; they were accomplices.
There is need for honesty in our analysis of events. As David Pearce, the British Deputy High Commissioner, observed last week, the repossession of Zamtel sends a good message to honest investors in the world that this is the place to invest in if one wants an honest deal because corruption is not tolerated from any quarter.
Labels: CORRUPTION, HAPENGA KABETA, LAP GREEN, ZAMTEL, ZICA
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LAP GreenN sues Zambian government
By Kabanda Chulu
Thu 02 Feb. 2012, 13:00 CAT
LAP Green Networks of Libya has taken the Zambian government to court seeking judicial review to challenge the compulsory acquisition of its 75 per cent shares in Zamtel. And the government will consider offloading a certain percentage of shares in Zamtel to the Zambian public.
In an interview in Lusaka yesterday, justice minister Sebastian Zulu said the government used the land acquisition Act to acquire the 75 per cent shareholding in Zamtel in national interest.
"So LAP Green is challenging that decision to compulsorily acquire those shares and they have made an application for leave seeking judicial review because you first obtain leave. In the first instance, leave was refused when Zamtel accounts were blocked so they went to court and lost and now they have come back asking the court to reverse the decision to acquire the 75 per cent shares," Zulu said.
"It is their application for leave in order to go for trial, I don't know what has happened because I was told the matter will come up today (yesterday) under Judge Woods and now that we have 100 per cent shares, government will decide but probably we shall offload some to the Zambian public."
Zulu said the government was ready to defend its decision in courts of law.
"What do you do when someone wants to fight? You defend yourself, isn't it? And that is what we shall do," he said.
On Sunday, Attorney General Mumba Malila said compensation of terminated contracts would be considered on a case by case basis because some companies have deprived the country of its resources.
Malila, who did not name the companies, said some entities have already commenced legal proceedings against the government.
And Zamtel chairman and chief executive officer Mupanga Mwanakatwe has assured the nation that the entity would continue its network expansion programme and growing of its customer base despite government take over.
"Zamtel will continue to pursue an aggressive growth path and operations have continued to run smoothly since government's takeover," said Dr Mwanakatwe in a statement issued yesterday in Lusaka.
"Our ambitious growth and investment plans remain fully on-track. We are, for instance, currently in the initial phase of replacing our copper wire network with optical fibre network. Our 3G roll-out plan is also on course and very soon we shall be inviting some of our valued customers to participate in product testing."
Labels: LAP GREEN, PRIVATISATION
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COMMENT - It is ridiculous to keep justifying an illegal act like the ZAMTEL 'sale'. In fact, LAP Green should compensate the Zambian government for the $75 million the government paid
them. You don't offer a criminal a smaller portion of the loot.
Kavindele opposes ZICA's position on LAP Green
By Chiwoyu Sinyangwe
Wed 01 Feb. 2012, 13:59 CAT
ZICA's proposal that government should have downgraded LAP Green Networks' 75 per cent stake in Zamtel to 49 per cent amounts to endorsing corruption, says Enoch Kavindele.
Zambia Institute of Chartered Accountants (ZICA) on Monday said reversing the controversial US$275 million sale of three quarters of Zamtel to LAP Green Networks amounted to "throwing the child with dirty water". ZICA chief executive officer Hapenga Kabeta said.
"despite the irregularities reported" by the Sebastian Zulu commission of inquiry into the sale of three quarters of the shares in the country's total telecommunications provider to LAP GreenN in 2010, Kabeta said the reversal of the Zamtel sale might result in the country using public money to compensate the Libyan investment vehicle.
"We believe that LAP GreenN should have been engaged by the government with a view to reach a consensus that would give more benefits to the people of Zambia," said Kabeta said.
"Among the alternatives would have been the reduction of shareholding for LAP GreenN from 75 per cent to say, 49 per cent. It is our hope and prayers that the decision by the government to reverse the sale of Zamtel does not prove to be costly to the people of Zambia."
But Kavindele who served as vice-president during the late presidents Levy Mwanawasa and Frederick Chiluba reigns said it would be imprudent for the government to share with foreigners a stolen product.
"The government has done the right thing to take back 100 per cent of the company stolen from the Zambian people," Kavindele said.
"If the government did not take the decision it took, then it would have been legalising graft." Kavindele said although the correction of any crime or corruption comes at a cost to any country, precedent needed to be set that Zambia would not tolerate corruption even if it involved foreign companies.
"Correcting anything that has gone wrong, there is a cost to it," said Kavindele.
"If the government were to allow LAP GreenN to continue even with reduced shareholding, it would not have sent correct messages because it would have meant that ‘fair enough you stole but you can pay and enjoy the benefits of the crime."
Labels: ENOCH KAVINDELE, HAPENGA KABETA, LAP GREEN, ZAMTEL, ZICA
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COMMENT - The GRZ should have
reduced LAP Green's shareholding in an illegal sale? What kind of compromise is that? LAP Green owes the Zambian government about $75 million, which is the net amount the Banda government paid them for the privilege of buying 25% of a company it was selling.
Government should have downgraded LAP Green's shareholding in Zamtel to 49% - ZICA
By Chiwoyu Sinyangwe and Hope Chali
THE government should have downgraded LAP Green Network's shareholding in Zamtel from 75 per cent to 49 per cent as opposed to taking 100 per cent stake which might result in the country using some public money to compensate the Libyan investment vehicle, says ZICA.
And the Zambia Institute of Chartered Accountants (ZICA) says the PF's renewed energy and vigour to fight graft must be appreciated.
ZICA chief executive officer Hapenga Kabeta said "despite the irregularities reported" by the Sebastian Zulu commission of inquiry into the sale of three quarters of the country's total telecommunications provider to LAP GreenN in 2010, the issue could have been handled from the path taken by the government.
"As a country, we should avoid throwing the child with dirty water," Kabeta told journalists during a media briefing at ZICA head office in Lusaka yesterday.
"We believe that LAP GreenN should have been engaged by the government with a view to reach a consensus that would give more benefits to the people of Zambia. Among the alternatives would have been the reduction of shareholding for LAP GreenN from 75 per cent to say, 49 per cent. It is our hope and prayers that the decision by the government to reverse the sale of Zamtel does not prove to be costly to the people of Zambia."
He said the government should have appointed an interim board of directors with a chairperson to appoint an interim chief executive officer.
"We have no problems with the professional standing of the current appointee but the principle used in his appointment was not appropriate," Kabeta said.
"Such appointments are not in line with good corporate governance practices."
On January 24, 2012, President Michael Sata announced that the government had taken back the 75 per cent stake in Zamtel "fraudulently" acquired by Libya's LAP Green Networks in the controversial transaction hatched at US$257 million.
President Sata's announcement saw former managing director Hans Poulsen being replaced by veteran telecommunications engineer Dr Mupanga Mwanakatwe.
President Sata said 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 Zamtel.
Earlier in the week, finance minister Alexander Chikwanda said the government would take back the 75 per cent stake in the country's sole total telecommunications provider 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 biggest telecommunication company.
And Kabeta said the local accountants' body stood ready to partner with the government to fight graft.
"One of areas where government needs to be commended is the fight against corruption," he said.
"There is no doubt that there is renewed energy and vigour in the fight against corruption, which must be appreciated. However, we have observed serious governance issues regarding the dissolution of boards and dismissal of senior management of parastatals and quasi-government institutions in recent past at the behest of those in government."
Kabeta said ZICA feared that the country was heading towards the path where a change of government results into automatic dissolution of boards and senior management.
"This is an effect of destroying peoples' careers and their contribution to the country," said Kabeta.
"Every institution has what we call institutional memory which normally resides in long-standing members of either the board or management continuing to provide services. Our view is that it is important that when changes are made, an objective performance assessment is carried out by a suitably qualified entity or persons, and action is taken after review of the recommendations by an appropriate body, and that the relevant laws are strictly adhered to and contracts are respected."
Labels: LAP GREEN, ZAMTEL, ZICA
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President MIchael Sata sets ZANACO as the next target
TIME PUBLISHED - Saturday, January 28, 2012, 4:38 pm
PRESIDENT Michael Sata has directed Minister of Justice Sebastian Zulu to immediately probe the sale of the Zambia National Commercial (Zanaco) Bank to establish whether procedure was followed when Dutch bankers Rabo acquired a 49 percent stake in the institution in 2007.
The probe comes days after Government reversed the sale of telecom’s company, Zamtel, whose controversial 75 percent stake belonged to Libya’s LAPGreen but has now been placed in government hands.
The Zulu-led probe team, which will also hold public meetings starting February 1 – according to a notice published – will officially try “to determine how the sale of Zanaco was conducted and to establish whether privatisation requirements were met”.
Chana Musakanya, the bank spokesperson in an emailed statement yesterday, said “Zanaco will co-operate fully with the Commission, and has been doing so upon request. We look forward to the review of the privatisation process of Zanaco, which was extensive and took place over a period of many years.”
Government has also assured – through chief government spokesman Fackson Shamenda – that business will not get hurt during and after the probe.
Mr Shamenda said: “This is a routine check into the sale of the bank as the Government attempts to normalise some old parastatal transactions. I would like to assure both shareholders and depositors that everything is under control and no-one is bound to be hurt.”
Mr Shamenda said the exercise will extend beyond the Euro-money Award recipient of 2011 to other parastatals, in a bid to ensure that the laws of the country were followed during the transactions.
Zanaco has the largest branch network countrywide, with more than 60 branches to its credit and it also has a district representation through a partnership with Zampost, making it the largest bank by representation in Zambia, according to information on its website.
It employs more than 1, 300 employees and is also the most capitalised bank in the country, according to management, but this information has not been verified with the central bank, which keeps such records, especially after capitalisation numbers for both local and foreign banks were recently hiked by BoZ.
President Sata said during the campaign period for last year’s elections that he would investigate some transactions that occurred while he was opposition leader to establish that they were done above board.
Zanaco is among the top five banks in Zambia out of a total of 18 registered commercial banks.
[Zambia Daily Mail]
Labels: FACKSON SHAMENDA, LAP GREEN, MICHAEL SATA, ZAMTEL, ZANACO
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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
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Ruling on LAP Green's judicial review today
By Mwala Kalaluka, Allan Mulenga and Kombe Chimpinde
Tue 24 Jan. 2012, 12:54 CAT
RULING in the matter where Zamtel Telecommunications Company has sought judicial review in the Lusaka High Court following the freezing of its bank accounts by the Drug Enforcement Commission comes up today. And
George Kunda says the MMD will not contest the reversal of the sale of Zamtel.Lusaka High Court judge Evans Hamaundu is expected to hand down the ruling today after the matter came up for ex-parte hearing yesterday morning.
According to a statement in support of an application for leave to apply for judicial review filed in the Lusaka High Court, Zamtel cried out that the seizure of its accounts in Barclays Bank and Zambia National Commercial Bank would lead to a halt of its operations.
Zamtel in its application is seeking a reversal of its account seizure act by DEC.
Zamtel wants the court to also declare that the Act under which DEC seized the accounts, which is the prohibition and prevention of money laundering Act number 14 of 2001 was unconstitutional as it infringes article 161 of the Republican Constitution.
Zamtel also seeks damages suffered as the result of the seizure of its bank accounts.
Featuring on Muvi TV's The Assignment programme on Sunday night, Kunda, the former Republican vice-president in the Rupiah Banda regime, said the current government should take responsibility over the reversal of the sale of Zamtel.
Banda's government sold 75 per cent shares in Zamtel to LAP GreenN of Libya for US$257 million, a decision the previous government described as "the best".
But the current government has reversed the transaction, with President Michael Sata saying the deal was consummated by a corrupt regime.
"Let those who want to reverse the sale of Zamtel take responsibility; they are the government, but you see other people have got their own rights, for example LAP GreenN. And also you see Zamtel has been performing well. So far, I am told the subscriber base has increased from 100, 000 subscribers to a million. Now, it shows that the company is doing well, but anyway our government feels that they should repossess, we go by that," he said.
Kunda insisted that the reversal of the sale of Zamtel would be costly on the part of the government.
"As we have said before, this is going to be a very costly reversal and also what we are saying is that this is the best privatisation ever undertaken in this country and that is the fact because all the facts are there, but it is up to the government. If they want to reverse, let them reverse, but we can only state our position," he said.
Kunda described the Sebastian Zulu report on the sale of Zamtel as a fraud and fault-finding.
"Mr Sata, he is the President and he is going to take responsibility for this. You see these are the things which they are investigating us over when we go to the defunct Task Force; why did you do this; why did you do that. That is what is happening, procedural lapses; that is what they are investigating. So, even these issues those who have been involved in this, they will be answerable, they will be accountable to the people of Zambia because there are legalities involved," he said.
"This will entail terminating binding agreements. Now at international law, you have to go back to the agreement. You look at dispute resolution mechanisms will this be through arbitration, which law will be applied all those. We must be ready for that and of course the government will take responsibility."
Kunda accused President Sata of witch-hunt in his fight against corruption.
"For example, Sebastian Zulu was given instruction to say this was a corrupt transaction, I want it to be reversed. It is fraud, it is predetermined. They were going to reach this conclusion, anyway this was Mr Sata's wish and he is still pursuing it and threatening anybody. They have published this report so we must all debate, but when we debate as MMD he comes out very strongly, he is threatening with reprisals which are uncalled for, for a President of the country," said Kunda.
And Felix Mutati says the government must allow Zambians to decide what action should be taken regarding the privatisation of Zamtel to Lap GreenN of Libya.
Mutati, the former commerce minister and now leader of the opposition in Parliament, said it would not help to reverse the whole sale of Zamtel based on "a few" irregularities that surround the transaction.
He said the MMD will not join in giving emotional responses on the government's decision to reverse the sale but analyse its content as a basis for them to make informed responses to the Sebastian Zulu-led commission of inquiry findings.
Mutati said the MMD's preliminary assessments, however, based on extracts from the press indicated that there were contradictions in the report which has been made public.
"There are some contradiction and technical inaccuracies, for example, the report says government returned US$15 million as net profit, whereas at the same time they indicate that government was paid US$257 million. The second is the indicator that RP Capital valuation stands at US$38 million, while on the other side they blame RP for facilitating a total purchase price of US$257million," he said.
"On the technical platform, it indicates that the book value of Zamtel is US$84 million, but it does not indicate that when transaction has taken place under the ZDA Act, the basis of evaluation must be the net assets therefore does not take into account the liability and these are some of the exempts that have come through from the press indicating these inadequacies."
Mutati, who was last week summoned by the Taskforce investigating plunder in the previous regime, reiterated that the sale of Zamtel was in the best interest of Zambians as it was limping, stressing that reversing the sale because of "a few" irregularities may not be in the interest of the country.
"Zamtel at the time as confirmed by audited reports of 2009, which indicated that Zamtel registered a loss of US $20 million had a subscriber base of around 100,000 and its survival was premised on not paying taxes to government and also defaulting on its financial obligation to the various lenders," Mutati said. "In this matter, it is paramount that sometimes you may need to cure a wound but not cut a limb. This is a fundamental transaction."
Labels: COURTS, GEORGE KUNDA, LAP GREEN
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Zamtel deal
By The Post
Mon 23 Jan. 2012, 12:00 CAT
IT is said that
"what you get by dishonesty, you may enjoy like the finest food, but sooner or later, it will be like a mouthful of sand" (Proverbs 20:17). It is also said that
"the more easily you get your wealth, the less good it will do you" (Proverbs 20:21) and that
"the riches you get by dishonesty soon disappear, but not before they lead you into the jaws of death" (Proverbs 21:6).
This is the case those who corruptly sold and bought Zamtel are today finding themselves in.
The writing was on the wall for all to see that there was something wrong with this transaction which no decent regime would accept. But neither Rupiah Banda nor his friends in LAP GreenN were ready or willing to listen.
They thought they were the alpha and the omega - everything was dependent on them. And they didn't think that they were going to leave power so soon, so early; they didn't believe that with all their corruptly acquired money, penniless people would defeat them in the September 20, 2011 elections. They thought they had it all wrapped up and that after another five years in power, nobody would ever talk about their corrupt sale of Zamtel.
It is said that "a warning given by an experienced person to someone willing to listen is more valuable than gold rings or jewelry made of the finest gold" (Proverbs 25:12). Rupiah and his LAP GreenN friends cannot say they were not warned or that they were not advised by fellow Zambians, including ourselves, to stop their evil and corrupt schemes in Zamtel. But they were not ready to listen to anyone. The money was too big to forego; the stakes were too high to lose.
They were ready to defend a clearly corrupt transaction against all political, moral and legal wisdom that they were given. Whoever tried to stop them was an enemy. They even got rid of an extremely honest Attorney General, Mumba Malila, whose only crime was to try and advise them against this clearly evil transaction. Today, they will have to face Malila - he is back as Attorney General. And they are out there appearing before our law enforcement officers as criminal suspects over the same things they were advised against.
This is what greed does to people; "bloodthirsty people hate anyone who is honest, but righteous people will protect the life of such a person" (Proverbs 29:10); "the righteous hate the wicked, and the wicked hate the righteous" (Proverbs 29: 27).
There is nothing wrong Michael Sata and his government have done in trying to straighten a transaction that was born twisted. What can anyone truthfully expect Michael to do? Watch them enjoy the fruits of banditry, plunder, corruption without doing anything? They have stolen from the people.
Zamtel was 100 per cent owned by the Zambian people and it has been corruptly taken away from them.
What can anyone truthfully expect a president who represents the people to do? A government which bases all its actions on the highest interest of the broad masses of the Zambian people and which is fully convinced of the justice of its calls, can never do anything other than what Michael is trying to do - get what has been stolen from the people and give it back to them. A people's government, a people's president, protects the people. And only when the people have such a government, such a president can they rid themselves of corruption and all its consequences.
To see someone stealing from the people, harming the interests of the masses and yet not feel indignant about it is something that only corrupt elements of the Rupiah type can tolerate. One has to be corrupt to defend what has happened to Zamtel, to defend Rupiah's Zamtel-LAP GreenN deal. In fact, if one wants to see where one belongs on the corruption indices, one should simply look at where one stands on this issue, on the sale of Zamtel to LAP GreenN by Rupiah and his friends.
Only a corrupt element can either suggest that repossessing what has been stolen from the people will scare away investors. What type of investors can be scared away by the acts of a government that doesn't tolerate dishonesty, thieving or corruption? Only corrupt investors want to deal with a corrupt regime.
And truly, there is no shortage of such investors in the world. There are many. But the question is: of what value are they to a country and its development?
We all know that the Gaddafi regime was not only tyrannical but it was also corrupt in its dealings with weak African leaders and their regimes. We all know that Gaddafi used to give some weak African presidents money to induce them or bribe them to take positions that were favourable to him on various, including business deals in their own countries. And Rupiah knows this very well. We will not ask him the embarrassing question: what did Gaddafi do for you? Or how much did Gaddafi pay you?
There is a new regime in Libya which we hope will be different from that of Gaddafi and treat other Africans with respect and with a spirit of solidarity. And we expect them to demonstrate this by giving back to sister nations that which was taken away from them through the corruption of their own leaders and Gaddafi.
We believe it will be much easier for the new Libyan leaders to deal with honest African leaders than crooked elements that Gaddafi had corrupted with money, with bribes.
[Don't hold your breath. The new Libyan government in infinitely more corrupt than the government of mr. Ghadaffi ever could have been. They came to power through NATO destruction of their country, and many of them are racist and insane. Then, many of them are Islamist fanatics who fought the US Army in Iraq and Afghanistan, like the Libyan Islamic Fighting Group (LIFG). And now they are getting NATO air support. Gee, I wonder if they could have been working for parts (Rockefeller) of the US government all along, to provide cover for foreign invasion and a continued stay in Iraq. After all, they were created by the US's Porter Goss and Zbigniev Brzezinski in the 1980s to begin with, to fight the Soviets in Afghanistan. In true Pentagon supporting tradition, Hollywood even made a movie glorifying them - Rambo III, filmed entirely in Israel, with Israeli actors. Recently, Hollywood made a movie vilifying President Mugabe, called The Interpreter, with Nicole Kidman, and a movie supporting the diamond monopolist Anglo-American De Beers driven Kimberly Process diamond certification, called Blood Diamond, with Leo DiCaprio, a process aimed mainly at keeping Zimbabwe from selling it's diamonds and maintaining the economic blockade of the country. And I'm not impugning the actors' integrity at all, just their political and economic insight, which I am sure is based on mainstream media reporting. - MrK]
It won't do to let LAP GreenN keep Zamtel, a company they had corruptly acquired, for the sake of just being seen to respect the property rights of foreign investors. There is no need for Michael and his government to refrain from taking a principled position simply because doing so will make them look bad in the eyes of investors, or rather corrupt investors.
Of course, we shouldn't forget that there are people in this world who take cruel advantage of the poor and needy and their governments or representatives; that is the way they make their living. But whereas there are people whose job, whose way of earning a living is to collude with corrupt elements and defend them and their deeds, there are also people who see it as their life's mission to defend the people and that which is just against those who try to steal the people's honour.
And right now, Michael is doing just that - defending the people's interests and their honour.
A man who colludes with corrupt investors to steal from his people is not an honourable man. There must be a certain amount of honour in a country for it to prosper. When there are many men and women without honour, there are always others who bear in themselves the honour of many men and women.
Labels: LAP GREEN, ZAMTEL
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President Michael Sata urges Investors in Zambia and ZAMTEL workers not to panic
TIME PUBLISHED - Sunday, January 22, 2012, 3:08 pm
President Michael Sata has urged investors in Zambia and ZAMTEL workers not to panic or be used by individuals who have axes to grind with the Government and are peddling all kinds of lies as a cover for their crimes.
The President has said that the PF Government’s primary duty was to be custodian of public interest and it therefore has a duty to correct falsehoods, distortions and misrepresentation of facts by elements that have unscrupulously plundered public resources.
“Despite the release of the Report of the committee investigating into the sale of ZAMTEL to LAP Green Networks to the public, members of the tainted MMD administration assisted by some imprudent media houses are still having a field day spreading falsehoods, alarm and despondency,” says President Sata.
President Sata underlined that LAP Green failed to meet three cardinal bench marks prescribed by the Zambia Development Agency (ZDA) in the sale process.
“And these are: (a) a minimum of five years of licensed operation in the telecommunications industry (b) have more than three million subscribers on fixed, mobile or fixed wireless networks; and (c) a minimum of US$250 million Shareholders’ equity for private entities or a minimum market capitalization of US$500 million for public listed entities,” President Sata said.
“LAP Green all the same had the sale consummated by a corrupt regime which disregarded its own legal requirements of effecting the tender process, the mandatory legal consent by the Attorney General and ensuring valuation within the provisions of our laws. Although, there is no documentary evidence of any valuation, R.P Capital were paid US$12.6 million which was shared with the corrupt collaborators with explicit assistance by the Government officers at various levels.”
Mr Sata said that Government is convinced that a deal of this nature shrouded in insidious corruption cannot be sustained by any court of law in the international community.
“Therefore, the scare mongering tactics by Dr. Situmbeko Musokotwane intended to cover up his crimes is essentially an exercise in futility. The PF Government’s unequivocal stance on zero tolerance for corruption has the fullest support of theinternational community which abhors resource misdirection through corruption, a big contributory factor to Africa’s retardation,” President Sata said.
“Since the advent of the PF administration all donor institutions and Governments have increased their aid outlays to Zambia and the challenge is in fact for Zambia to develop adequate capacity to use the external aid timely and effectively. ”, Mr Sata said.
On investment, President Sata said it was flowing into the country at a commendable pace because investors trust the PF policy consistency and predictability, the pillars of credibility.
“The type of investors that are idols of the likes of Dr. Musokotwane who come via the route or channel of corruption are a luxury Zambians can do without. Make no mistake about it, for we are determined to see transparency, accountability and good business moral codes in all spheres of Governance,” the President says.
“Investors who are here and those planning to invest in our country are assured Zambia is a reliable investment destination. Zambia has not only both peace and stability but is irrevocably committed to the rule of law. What is more, there are no restrictions let alone cumbersome procedures for externalisation of dividends.”
The President said that suggestions of investors shunning Zambia is a misperception and pipe dream of Dr. Musokotwane.
“The former minister as yet has a lot of things to answer including the tax deferment concessions he gave in ways which Zambian law does not mandate. Sabre rattling as a defence, he will soon prove, is unsustainable and will not get him off the hook even with the lavish coverage he is getting from reckless media houses with a strange agenda,” President Sata said.
“This Government will not be stampeded into precipitate actions and if the Government is slow in bringing to book those who have committed crimes against Zambia, it is only because they want to follow the due process of the law. We urge ZAMTEL workers not to panic or be used by people who have axes to grind and who are peddling all kinds of lies as a cover for their misdeeds. If any accounts have been frozen it is to prevent the money from being taken out and it is basically in public interest.” , Mr Sata said
President Sata emphasized that when ZAMTEL has been sorted out the majority of the shares will be owned by Zambians.
“ZAMTEL is a viable proposition when things have been realigned and streamlined. The temporary setbacks of the workers will be attended to so that workers are not subjected to uncertainties any more. Government has both the will and capacity to meaningfully capitalize ZAMTEL,” President Sata said.
“As Head of State, I will never sideline my commitment to safeguard and superintend the interests of the Zambian people. Zambians with the passage of time will realize that they never misallocated their trust by entrusting me to preside over their fate and destiny.”
Labels: LAP GREEN, MICHAEL SATA, NEOLIBERALISM, SITUMBEKO MUSOKOTWANE, ZAMTEL
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DEC working under political pressure – Zamtel Managing Director
TIME PUBLISHED - Saturday, January 21, 2012, 5:12 pm
Zamtel managing director Hans Paulsen has said that siezure of ZAMTEL accounts by the Drug Enforcement Commission (DEC) was unreasonable and calculated to frustrate Zamtel management and paralyse the company’s operations. DEC seized three accounts at Zanaco and 10 others at Barclays Bank on January 18, 2012. This is according to the company’s application for leave to apply for judicial review, filed in the Lusaka High Court on Thursday.
“The DEC has no reasonable grounds to believe that all monies in the seized accounts are proceeds of criminal activities. The action by DEC has been precipitated by political pressure that the sale of Zamtel was allegedly fraudulent, an allegation that has not been proven in any court of law.”
“Monies have been wrongfully seized, based on a unilateral and unsubstantiated report. The DEC’s decision is wrong and not justifiable in the circumstances. Zamtel has never been heard by DEC after the seizure of the accounts,” Mr Paulsen said in his affidavit verifying facts.
Mr Paulsen said that Zamtel believes that the seizure is an indirect way of expropriating its property as it shall become non-operational due to lack of access to its funds.
“This is not in public interest as its internet services, fixed phone lines, mobile phones and other services will eventually shut down, due to lack of access to funds to pay for services and operational expenses. Employees shall be greatly affected in that Zamtel will be unable to pay them,” he added.
Mr Paulsen says the DEC’s action implies that Zamtel is an illegal business notwithstanding that Government, to which DEC belongs, is a shareholder in Zamtel.
“This is not in public interest as its internet services, fixed phone lines, mobile phones and other services will eventually shut down, due to lack of access to funds to pay for services and operational expenses. Employees shall be greatly affected in that Zamtel will be unable to pay them,” he added.
“This will have an unprecedented impact on the economy and security of the country. It is desirable and in the interest of justice that this court grants leave to Zamtel to file a notice of motion for judicial review and that the order of leave to commence judicial review acts as a stay of the DEC’s decision to seize monies in the bank accounts belonging to Zamtel,” he said.
Lusaka High Court judge Evans Hamaundu is scheduled to hear the matter on Monday, January 23, 2012.
Meanwhile, anxiety and uncertainty has gripped many Zamtel top brass who do not know when or where the axe will fall from as the government tightens the noose on the company believed to have been sold after “gross” under valuation according to a study by the Sebastian Zulu-led probe team.
The company was sold for a questionable US$257 million of which only some US$15 million has been received by the government, according to Zulu who was commissioned to study the transaction by President Michael Sata.
Former Cabinet Minister in the MMD government Dora Siliya and former President Rupiah Banda’s son Henry are reported to have put together the transaction which the report says is deeply flawed and marred with gross corruption and was done without the national interest of Zambia.
Stephen Laufer, the Lapgreen representative for Southern Africa via phone yesterday said the company would issue a statement.
[Zambia Daily Mail]
Labels: CORRUPTION, EVANS HAMAUNDA, LAP GREEN, ZAMTEL
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DEC freezes Zamtel Bank accounts
By Joan Chirwa-Ngoma and Mwala Kalaluka
Sat 21 Jan. 2012, 19:50 CAT
THE Drug Enfor-cement Commission has frozen Zamtel's accounts held in commercial banks operating in Zambia.
But Zamtel yesterday filed for judicial review at the Lusaka High Court over government's decision to freeze its accounts. Meanwhile, Zamtel employees risk not receiving their January salaries owing to the freezing of the company's bank accounts.
Cabinet sources revealed yesterday that the freezing of Zamtel accounts follows government's decision to repossess 75 per cent of the company's shareholding sold to Libya's LAP GreenN for US$257 million.
"That is why the workers are failing to bank the money because all the accounts for Zamtel have been frozen by the government," said the source. "This actually poses a serious problem because the workers may not even get paid. How do you pay workers when the accounts are frozen?"
Zamtel management yesterday morning filed for judicial review before judge Evans Hamaundu over the freezing of the company's accounts.
"But actually, most judges were reluctant to hear that case because of its sensitivity," said a source.
According to a statement in support for an application for leave to apply for judicial review filed in Lusaka High Court, Zamtel cried out that the seizure of its accounts in Barclays Bank and Zanaco would lead to a halt of its operations.
In the matter where the LAP Green Network-owned company has cited the Attorney General as the sole respondent, Zamtel is seeking relief from the High Court to reverse the seizure of its bank accounts.
"The applicant is a private company incorporated in the Republic of Zambia and is a one stop telecommunications company providing fixed telephone line services, mobile phone services, Internet services and other telecommunication services and products," Zamtel stated.'
The account numbers of Zamtel's accounts that were seized by DEC include, 042024000000000042, 3020001240 and 066024000000138 held at Zanaco and Barclays Bank.
Other seized accounts are 0011529, 161271152, 121156695, 0957718, 1213926, 011067026, 011067026 and 011039634 held at Barclays Bank.
Zamtel has sought an order to quash the decision by DEC to unilaterally and unreasonably issue a notice of seizure in respect of its seized accounts.
"A declaration that the procedure by the DEC to seize the seized accounts was unfair and contrary to the rules of natural justice," Zamtel stated in its application.
Zamtel wants the court to also declare that the Act under which DEC seized the accounts, which is the prohibition and prevention of money laundering Act number 14 of 2001 was unconstitutional as it infringes article 161 of the Republican Constitution.
Zamtel also seeks damages suffered as the result of the seizure of its bank accounts.
The statement further outlined the grounds upon which Zamtel was seeking relief from the court in the matter and one of them classified DEC's act as unreasonable.
"In that it permits DEC to seize property without paying compensation in the event that the seizure was wrongful, unreasonable and if the owner of the seized property is not found guilty of any offence," the application read further. "That holding money gained from a viable business duly established by law does not constitute money laundering."
Zamtel went on to argue that the seizure of its accounts amounts to an indirect expropriation of property by the government through its department or institution, the DEC.
Zamtel claimed that the decision by DEC was fraught with procedural impropriety.
"Procedurally DEC should have investigated the matter and accord the applicant its right to be heard immediately after seizing the Seized Accounts," the telecommunications company stated.
"It is settled precedent and a right in Zambia that when proceeding under provisions such as Sec 15 of the Prohibition and Prevention of Money Laundering Act number 14 of 2001 the right to be heard must be exercised by the authority involved."
Zamtel stated that DEC blatantly violated the above principle by not according it the right to be heard and to make representation regarding the seized accounts.
"That further the government, through its department, DEC is acting as the investigator and prosecutor in the same cause notwithstanding that it is a shareholder in the applicant," Zamtel stated in part. "That when arriving at the decision, the DEC failed to take into account relevant considerations such as that the applicant is a commercial entity that is able to show that the funds in the seized accounts are proceeds from business."
Zamtel stated that DEC also failed to take into account that the government, which is the shareholder in the company, sits on the board of directors and was aware of the source of the funds.
"There is no reasonable ground to believe that the funds in the seized accounts came from proceeds of crime for a company which is audited per quarter in a calendar year and both the government and LAP GreenN Network Limited as the shareholders know of these audits," the application read. "Since privatisation the applicant is a viable commercial entity and is able to have the sort of funds in the seized accounts."
Zamtel complained that the seizure of its accounts implies that the company has been operating an illegal business, in which the government was a shareholder.
"The seizure of all the accounts of the applicant will make the company more unprofessional which is not in the public interest as the provision of the applicant's telecommunication services shall be brought to a halt," Zamtel stated.
Zamtel stated in its ground of relief that it would be difficult to meet its workers' remuneration requirements following the seizure of its accounts by DEC.
The matter has since been allocated to judge Evans Hamaundu.
Sources told The Post on Thursday that Zamtel had stopped banking its daily collections due to uncertainties on the future of the company.
Cabinet recently agreed to repossess Zamtel from Lap GreenN.
A report of the Commission of Inquiry instituted by President Michael Sata led by justice minister Sebastian Zulu noted that LAP GreenN must have been eliminated at the pre-qualification stage during the privatisation of Zamtel as it did not meet both the five year minimum telecommunications operators requirement and the national telecommunications network licence requirement.
The report also revealed former president Rupiah Banda's influence in abusing and circumventing set government institutions and procedures and that he aided RP Capital to ensure LAP Green Networks bought Zamtel despite not being fit to run the company.
The report further reveals that that following review of the bid from LAP GreenN, the committee noted serious and critical anomalies in the qualification of LAP GreenN in the preliminary stage which ZDA, their lawyers and their transaction advisors deliberately ignored.
But LAP GreenN chairman Wafik Alshater stated that the Libyan firm would be forced to explore legal options to protect its reputation following what he termed "willful misrepresentation" of the company.
Meanwhile, Zamtel employees are uncertain about the company's future, as they risk not receiving their January pay.
"The workers want to know what their fate is. As at now, things are not okay. The workers were promised that their jobs will not be affected but looking at the way things are moving, it is not clear what may happen tomorrow," said the sources.
Labels: COURTS, DEC, EVANS HAMAUNDU, LAP GREEN, ZAMTEL
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(MAILING LIST) Privatisations under probe by the Sata government
Privatisations under probe by the Sata government:
ROAN ANTELOPE MINING CORPORATION:
Following relentless pressure from the IMF and World Bank, the Chiluba government (including minister
Sata) agreed to privatise Zambia Consolidated Copper Mines (ZCCM), starting in 1997 with the Luanshya and Baluba Mines (and the Mulyashi green-field project) in Luanshya. The Zambia Privatisation Agency recommended selling the mine to First Quantum Minerals, current owner of Kansanshi Copper-Gold Mine, but Chiluba overrode the agency, instead selling the mine for USD 35 million to Roan Antelope Mining Corporation (RAMCOZ) owned by the Binani Group of India.
RAMCOZ struggled from the beginning, but the government refused to take responsibility for the failed privatisation, which had massive social implications in a town that owes its existence to the mine. The government even intervened on behalf of Binani whenever creditors threatened to discontinue business with the mine.
Eventually, in 2001, ZANACO Bank placed RAMCOZ under receivership with massive debts and leaving thousands of workers jobless. The appointed receiver was Hichilema’s Grant Thornton. In 2004, J&W Investments, a subsidiary of Enya Holdings of Switzerland, took over 85% of the RAMCOZ assets as the Luanshya Copper Mines (LCM) at about USD 7.5 million. ZCCM Investment Holdings acquired a 15% shareholding in the venture. In 2008, in
the face of falling copper prices, Enya placed LCM under care and maintenance, having accrued a USD 20 million debt to third-party creditors such as Zambia Revenue Authority, Copperbelt Energy Corporation and contractors. In 2009, Enya’s stake in LCM was sold to China Nonferrous Metals Mining Group for USD 50 million.
The Chinese expect to increase copper output at LCM to 120,000 tonnes per year, up from 23,750 tonnes in 1999 under RAMCOZ. THE INTERCONTINENTAL HOTEL in Livingstone was sold on competitive
tender to Sun international of South Africa for USD 6.5 Million in 1998. The purchase included leasehold rights to Rainbow Lodge. Grant Thornton’s role was not immediately obvious, but Sata has queried why Hichilema chaired the board of Sun International (Zambia) until 2006.
LIMA BANK: In 1987, the two government institutions, the Agricultural Finance Company and the Zambia Agricultural Development Bank were merged to create Lima Bank. Like its predecessors, Lima’s main purpose was to provide small-scale farmers with short-term loans. However, the bank experienced problems from the start. It had inherited a large non-performing loan portfolio and liquidity problems caused by poor loan recoveries, inadequate government funding and political interference. The bank suffered from the borrowing attitudes of small-scale farmers, who saw a loan from the government as a grant – which did not have to be repaid in drought years. LIMA Bank was liquidated by the Chiluba government in February 1997 – with Grant Thornton as appointed
liquidator. KAGEM MINING LIMITED was started in 1984 as a joint venture between an Indian-Israeli cooperative
Hagura Mining (45%) and a Government company, Reserved Minerals Corporation (55%). In 1998, government offered Hagura an option to buy a further 42% of Kagem at USD 1.8 million – but later reversed on its decision to sell. As a result, Hagura took government to court, and the two parties settled the matter out of court:
Hagura agreed to buy 30% of Kagem at USD 3.6 million. Hagura now owns 75% of Kagem and the government 25%. Grant Thornton was involved in the valuation of Kagem. Zambia National Commercial Bank (ZANACO) was formed by the government in 1969. The government had tried to partly privatise ZANACO for years, going back to 2001, when the bank made a net loss of just over K 65 billion (about USD 18 million) due to bad debts. Its initial offer of selling a 35% stake attracted little interest, but in 2007, the Mwanawasa government concluded
the sale of 49% of ZANACO to Rabobank of the Netherlands for USD 8.25 million (criticised for being low by Sata). ZANACO’s net assets as at 31 December 2004 stood at USD 20.5 million.
FINANCE BANK: In December 2010, the Bank of Zambia took over Finance Bank because it violated the Banking and Financial Services Act – although critics said the takeover was orchestrated by the Banda government’s wish to neutralise the bank’s founder Rajan Mahtani. In September 2011, the bank was sold to First National Bank at K 27 billion. In October 2011, President Sata handed the bank back to Mahtani. Critics said the reversal of the sale was inspired by Mahtani’s financial support of Sata. Mahtani is involved in several court cases in relation to Finance Bank, but last week, the State discontinued one case where Mahtani was charged with money laundering and acquiring beneficial interest in voting shares of Finance Bank, and this week, the State entered a nolle prosequi in a matter where Mahatani was charged with obtaining credit by It is official – the government has decided to reverse the sale of Zamtel . At the beginning of the week Justice Minister Sebastian Zulu said a reversal would depend on the outcome of negotiations with LAP GreenN. Later in the week, however, Zulu clarified that “[w]e are taking back the shares, and if there will be any negotiation, it will be to determine whether LAP GreenN deserve any compensation or not”. The Banda government sold 75% of Zamtel to LAP GreenN of Libya for USD 257 million in 2010. After assuming office, President Sata appointed a commission of inquiry to look into the sale. In November 2011, the commission deemed the sale “irregular, illegal and fraudulent” – and this week, Sata ordered that the commission’s report should be made public to “insulate our people against blatant lies”, directing that an express copy should be sent to the Libyans “who have dirty money and dirty hands”.
Main findings of the 112-page report:
RP Capital of Cayman Islands was “arbitrarily” appointed in 2008 to evaluate Zamtel by then Minister of Communications and Transport Dora Siliya – despite the Attorney General recommending a tender. When a tribunal found she had breached the Constitution, Siliya resigned, but the High Court ruled that the tribunal had “acted excessively”, and Siliya was appointed Education Minister. Siliya submitted that RP Capital had been recommended by ministry officials, but the commission said the ministry “contradicts Ms Siliya’s statement”.
It is said that President Banda’s son, Henry, who has gone AWOL in South Africa, introduced Siliya to RP Capital. The Zambia Development Agency (ZDA) team was not independent as required by law showed “gross negligence” (the ZDA has not commented). RP Capital controlled the privatisation process, as the committee uncovered numerous emails from RP
Capital issuing directives to high-ranking government, ZDA and Zamtel officials, including drafting ministerial and even presidential speeches and letters (such as a letter from president Banda to Chinese president Hu Jintao to ask for support in obtaining a loan to acquire the government’s share in Zamtel - see below).
Zamtel was “grossly undervalued” at USD 38 million despite having a book value for fixed assets of USD 81 million and a much greater market value (estimated by RP Capital itself at about USD 5 billion in two years). Regardless, Zamtel was sold for USD 257 million – disregarding that other companies such as Unitel of Angola (rumoured to be lined up by Sata to take over a repossessed Zamtel) had offered double the money and agreed to retain 60% of the staff. LAP GreenN, which failed all three of the mandatory pre-qualification criteria, retained 30% of Zamtel’s workers. Chairman of Vodacom Zambia Enoch Kavindele said Zamtel should have been sold for USD 3 billion, pointing out that Vodafone of the UK in 2008 paid USD 900 million for a 70% stake in Ghana Telecom with slimmer growth prospects than Zamtel.
The MMD government paid USD 334.4 million as “tax shares and subscription” for its 25% stake in Zamtel (which it owned), while LAP GreenN paid USD 257 million for its 75% - of which the government was entitled to USD 42.6 million. To date, the government has only received a cash sum of USD 15 million – while RP Capital has received USD 12.6 million as its 5% fee of the sales price. The transaction was structured in a “deliberately complicated” and “ridiculous manner” to let LAP GreenN take over Zamtel as a debt-free company with USD 64 million in its bank account paid by the Zambian government (equivalent to the privatised company’s capital expenditure for its first year of operation). The contract for the sale of Zamtel between the government and LAP GreenN was prepared before the negotiation process was complete as “it is inconceivable that a contract of this magnitude could have been prepared, approved and executed and copy forwarded from the Zambia Public Procurement (ZPPA) all in the course of one morning”.
Musokotwane’s defence:
Former Finance Minister Situmbeko Musokotwane called Sata’s allegations “un-researched pronouncements”.
He queried the independency of the commission, arguing that it consisted of politicians: Since they are “fully aware” of the president having pronounced that the sale was fraudulent, “it cannot surprise anyone that their report had to follow the same line of thinking or else they would have been sacked from their jobs”.
Musokotwane pointed out that the final price for Zamtel was higher than the value set by RP Capital – and challenged the PF government to refute the findings of a 2011 audit report by Ernest & Young, “which found Zamtel to be insolvent with enormous and unsustainable debt against few obsolete assets”. In 2009, Zamtel made a loss of more than USD 30 million, spending more than 50% of its revenue on salaries, while Airtel and MTN spent less than 25% on the same (analysts cautioned against direct comparisons as Zamtel offered three services: Landline, mobile phone and internet). Musokotwane further alleged that all of the USD 257 million had been received by Zambia and used to pay workers and clear Zamtel’s large debts. In 2010, the MMD government reported that the USD 257 million was broken down into USD 117.7 million to employee benefits and liabilities, USD 64 million directly injected into Zamtel, USD 32.7 million to settle external liabilities and USD 42.6 million to the Zambian treasury. Musokotwane pointed out that the price was the best ever received for a parastatal company in Zambia: According to the MMD, LAP GreenN’s total commitment came to almost USD 400 million including money pledged for network expansion and government guarantees. The gross value raised from the 262 privatisation before Zamtel was USD 433 million.
Zamtel’s response:
Initially, LAP GreenN stated it would “do everything possible to retain our stake in Zamtel”. Then it said it would “welcome any opportunity to work with the government to secure a swift and positive outcome that benefits both Zambia and Zamtel”. By the end of the week, it went quiet. It was reported that LAP GreenN chairman Wafik Alshater was due in Zambia to seek an audience with the government, but Justice Minister Zulu said he would not meet Alshater – “not for the time being anyway”.
The commission’s small concession:
The commission did recommend that a “thorough and comprehensive” forensic audit of the sale should be instituted (Daily Nation 13, Post 13-16, Daily Mail 13-17 and Times 15-17).
Labels: LAP GREEN, NEOLIBERALISM, PRIVATISATION, RP CAPITAL PARTNERS, SITUMBEKO MUSOKOTWANE, ZAMTEL
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