THE report by the Commission of Inquiry into the sale of Zamtel has revealed more anomalies, including one in which an official from RP Capital Partners of Cayman Island, issued directives to high ranking senior Zambian Government officials and drafted ministerial and presidential speeches on matters surrounding the Zamtel deal.
The 112 paged report states that the committee tasked to probe the sale of Zamtel discovered numerous e-mail correspondence from a Peter Heilner, issuing directives to senior Government, Zambia Development Agency (ZDA) and Zamtel officials.
“The committee has uncovered numerous email correspondence from RP Capital’s Peter Heilner issuing directives to high ranking and senior GRZ, ZDA and Zamtel officials, set timetables and tasks, drafted ministerial and even Presidential speeches and letters and orchestrated the deployment of personnel to strategic positions and departments,” the report reads.
The report states that it was clear from the outset that RP Capital,the transaction advisors in the Zamtel deal through Mr Heilner,single-handedly planned, managed, drove, controlled and executed the entire process.
The report says the Government, ZDA, Zambia Information Communication Technology Authority (ZICTA), State House staff, Zamtel and many others were reduced to the role of mere spectators with little or no input and control over the process.
The report says that audited Zamtel accounts dated March 31, 2009 pegthe book value of the company’s fixed assets -that is only the property, plant and equipment at US$81 million (K412,072,000,000).
The report states that the $81 million is just a book value and not the market value of Zamtel’s fixed assets which would be expected to be considerably higher than that.
“The committee finds it difficult to understand how RP Capital advisors could arrive at a value of Zamtel’s fixed assets of $38million in the absence of conducting a thorough, detailed and professional valuation of Zamtel’s fixed assets,” the report reads.
The Government further decided to pay for the 25 per cent shareholding it already owned in Zamtel and paid a total $334,440,000 in what was termed as Tax shares and subscription amount while Lap Green only paid $257 million for the 75 per cent shareholding of which the Government was only entitled to $42.6 million translating to 16.6 per cent of the sale value.
The Government has to date only received a cash sum of $15 million and that RP Capital received more than $12.6 million based on 5 per cent of $257 million.
The report reveals that the Zesco optical fibre network assets valued at approximately $20 million was given free of charge to Zamtel.
Lap Green also took over Zamtel as a debt free company with $64million sitting in its bank account which was provided by the Zambian Government.
And giving examples of correspondence, Press releases and speeches prepared by RP Capital’s Mr Heilner for the Government, the report attached a letter drafted by him and signed by former president Rupiah Banda on November 9, 2009 to Chinese President, Hu Jintao, asking for a loan from the China Export and Import Bank.
In the draft letter, Mr Banda was asking his Chinese counterpart to assist the Zambian Government obtain $75,424,323 concessional loan from the $10 billion programme for infrastructure in developing countries to cover the amounts owed to Zamtel’s Chinese equipment suppliers, Huawei and ZTE for projects that the two companies were in the process of completing.
“I write to you to request your assistance in a matter that is of national importance to the Republic of Zambia. As you may be aware,the Government of the Republic of Zambia is currently in the process of privatising Zamtel which has severely under performed in recent history.
“This privatisation will revitalise the telecommunications sector in Zambia through increasing investment and will contribute substantially to the development of Zambia as whole,” read the letter drafted by Mr Heilner on behalf of former president Banda to President Hu.
The letter stated that the sale of Zamtel was of considerable urgency in order to ensure the success of the company and on-going development of Zambia.
“I would like to request your support in obtaining approval from the China Export and Import Bank in respect of Zambia’s application,” the ?letter read.
Another document drafted by Mr Heilner was a Press statement by the then minister of Communications and Transport, Geoffrey Lungwangwa, on the ICT sector in Zambia.
In the statement allegedly written for the minister by Mr Heilner,Professor Lungwangwa said that the government and the communications Authority of Zambia (CAZ), ZICTA, had set out two ways in which they intended to encourage the deployment and usage of ICT products and services in Zambia.
Prof Lungwangwa said the first was through careful management of the licensing regime and that CAZ intended to issue no additional fixed or mobile licenses for the foreseeable future.
He said the second was through pricing and that CAZ intended to use its powers as set out in the new ICT Act to intervene in the wholesale market that existed between telecommunications operators.
Mr Heilner is also alleged to have provided answers to parliamentary questions, Order number 760, where questions concerning how much money the Government ministries and departments owed Zamtel immediately prior to the acquisition by Lap GreeN and how Lap GreeN intended to recover the debt.
The other question was on the total value of Zamtel assets at the time of privatisation.
[Times of Zambia]
ok we have heard you story sebastian zulu and sata,now as a matter of fairness we are earnestly waiting for a reply from Dr situmbeko musokotwane an mr lungwangwa
iam sure by now they have read the report.so tatwalande sana first
Lusaka Times what are all those question marks about? It is difficult to read this piece!
The beginning of the article says it’s a 112page document. I assume the writer of the article picked out what they deemed to be ‘headline’ grabbing items. It’s difficult to draw conclusions on the basis of this article alone and whatever one may have heard through the grapevine. That said, stop assuming those in the present government are all airheads, I’m sure consultations will be thorough.
Can LT redo this article. It is impossible to understand. I am sure PF can refund $15m very easily
okey its kind of tricky now, Lap GReen is not guilty, the then zambian government its the one which is suppose to pay for everything, those people who were in power
very difficult to understand the wrong doings in this piece.
U are VERY DULL not to follow the money!!!
Really strange that you cannot see. Maybe you shouldn’t be commenting on the matter. How do you allow another person to make rules for your family, when you are alive and in good mental state?
You are just too thick and very daft if you can’t see anything wrong!!
In short LAP Green did nothing wrong.
If anything wrong happened, then it was government or RP capital involved.
Welcome to zambia. it is a proper circus.
I see the reason why the president asks-r we not ashamed?sure this is retrogressive for a country like ours where govt leaders r given already drafted letters by business people.anyway let us also listen to the people evolved
Waiting for the rebuttal.This report was expected as per sata instruction.
Sad story indeed.As always gvt officials working for interests at the expense of Zambians.Privitisation is not always the answer
you are not normal sharp shooter..if the figures arent true,then the bafoon RB and his thieving crew should defend it.,why are you always bitter?you relative was in gvt?
yaba UBUTUTU MU ZAMBIA. I have written reports for my boss before. Nothing wrong with that. It is standard procedure for technocrats to write speeches. So your constable Data writes his own speeches?
some of these journalists are so dull.
Well you haven’t written ONE ON BEHALF OF THE BANK THAT WAS LENDING YOU THE MONEY!!!!
SO HEILNER(SPELLING),WAS RB’S BOSS??YOU MUST BE DULL MAN.
Well, well, well, interesting! The emperor has no clothes now. So these so called learned fimo fimos couldn’t even provide answers to simple parliamentary questions? A foreigner, like everything else with MMD, who was an “interested part” to the deal had to do it for them? It seems nothing was sacred to these thieves. Even being dishonest to their own legislatures was OK. No wonder they even contemplated selling off education (schools) so they can personally cash in—wow, I cry for country!
I await to see how MMD sycophants are going to spin themselves out of this tangled web of utter ineptitude and total disregard of fiduciary responsibility to the Zambian people. By the way, where is the full report? I would love to personally read it firsthand so I am not fed filtered crap!
grab it!!!its ours either irregularities or not-just grab it!RB and his corrupt lieutenants must be jailed 4 selling our property 4 few gwees while us owners pay more gwees.wat a shame
lelo lelo.. dora wawa
We have never had an educated president who could write speeches
Speeches are not written by the presidents or prime minister in the case of UK, Canada, Italy. He/she just gives an idea of what they ought to say….
No 10 serious business!
Thiefs thiefs in MMD. Shameless thiefs who are fighting to protect themselves. Ati Sata is witch hunting ….this stinking theft ?? Please Sata be fast now…give back the Zamtel to Zambians, it belongs to Zambians. Imagine Zambia gave the Zamtel to Kadaf and sons. Selling Zamtel at $15 million….useless thiefs indeed.
I fail to understand where the wrong doing is here. So an advisory firm wrote speeches and was very involved in the whole process, why is this a surprise? Wow such a shocker. When a private company does an IPO it’s investment bankers are thoroughly involved in the whole process- this doesn’t seem out of the ordinary. Also the continued focus on the fixed assets is slightly silly, question is how much was this company worth as a going concern considering its debt/equity leverage, its growth over the last ten years etc.
Be serious…
Foreigners do not have your country’s interests at heart.This firm was there to make a killing.Craft everything according to it’s plan and rip the most benefit.
And i “thought” you were a wise person, examine the roles of all the parties then come back and Zamtel wasn’t preping for IPO, it was a government company being privatised.
It was predetermined sale. RP Capital, Zambian Govt through Rupiah’s son worked this deal. Why should someone draft letters on behalf of the government?
Facebook is currently a private company and has a valuation of between US$80-100 billion dollars. It has only raised about US$ 2 billion in venture capital over the last 7 years and only has revenues of approx US$4 billion. Apple had about 100 billion in revenue last year and has a valuation of about US$380 billion. If you compare Apple’s revenue to valuation ratio it is about 3.8x, whereas if you compare Facebook’s revenue to valuation ratio its about 25x. So effectively Apple is being severly undervalued when compared to Facebook. Considering Apple’s growth over the last 7 years this is clearly the case. However FB’s valuation is based on future expectation. It’s clear FB does not have 80 billion in fixed assets, they’ve only raised 2 billion in capital in their firm’s life.
Use your ignorance somewhere else
So if FB is valued at 100-80 billion dollars on no more than 10 billion dollars worth of assets how can these people continuously address Zamtel’s fixed assets. Was Lap Green buying Zamtel as a going concern or it’s fixed assets? Clearly it was buying the company as a going concern. To keep mentioning fixed assets puzzles me. Fixed assets do have a part to play in a valuation- but that is largely dependent on the quality of the fixed assets.
The Ernst & Young Report needs to be made public also, the details of Zamtel’s financial health must be known before people jump to any conclusions.
So far nothing raises any alarms beyond Dora’s issues regarding the single sourcing of stuff. But otherwise everything else seems like it was done according to industry practice. In the West when you hire a firm to advise you- they provide you with deep advisory services, thats normal and not strange. It may only seem strange because Sata doesn’t know or understand these things. But thats just an opinion…more information is needed to come to any good conclusions.
#17
Your explanation is hard for PF cadres to grasp.They are used to rumour mongering.Worse still Sebastian Zulu and his crew(COI) are not schooled in valuation hence the above report.
17-18/Thoughts. Iwe wemwana waliya
Please speak English, I don’t understand you.
I think we are tired of this corruption in Zambia can you with immediate effect remove the immunity (bombasa).
Number 20, that may be so- but the point of blogging should not be for people to rant as some do. It should be to discuss and learn and expand our understandings of things.
It shocks me that Sebastian Zulu has come to his conclusions without even hiring a financial advisory firm to assess whether RP Capital’s valuation was in fact correct or not. The reality is that any one who has ever been involved in this sort of work will tell you its not an exact science, particularly for private limited firms. What is needed here is for an independent inquiry to be set up and for auditors and financial valuation experts to ascertain Zamtel’s value before and after the Lap-Green deal.
Sebastian Zulu and co. should only focus on what legal aspects of the inquiry.
Sharp shooter, You must be very dull. You think every PF cader is un educated to fail to grasp? Mulimuchibe.
Starved man,
You are failing to see the point, it is not your half baked speeches for your Boss we are talking about, it is someone outside Government, who has an interest to protect to completely take over and determine Government position on the matter, deliberately planned to ensure no contradictory statement comes out. So the issue here is this guy taking over legitimate Government functions, especially on statements to the public, including parliament, this was an anomaly and dereliction of duty. Forget about your hafl baked speeches, lat time I listened to oen, I wondered whether your boss was so dull, I now understand the reason, thanks!!!
Zambians wake up. Your coments are not upto date. silly comments. Zamtel is yours. it was built are its not a natural resource like oil which libyans have. It took hard work. innovation and commitment to have it in place unlike oil which was a gift free from God. Fight it back you fools. Am a foreigner and am shocked to read some comments that empower us foreigners in your land. Work up
If anything, MCS is simply doing what he promised all Zambians. removing corrupt minds among Zambians. After corruption is over what else MCS? We need development, I mean, seeing all roads completed; all farmers paid their dues; all youths employed. We do not have to get into Late Mwanawasa’s path of fighting Chiluba’s on corruption only to end up with Wash-out after losing so much. All those found wanting should throw themselves into Cells!
I am actually shocked. I have not read the report and i wish i can get a copy. Its common practice for transaction advisors in deals to draft press statements for clients on a deal depending on the mandate of the advisor.
If this is the smoking gun Sata thought he had, i see Zambia losing alot of money on this deal. What a waste of tax payers money if this is what the commission concluded.
# 14…IMPROVE YOUR SPELLINGS… BEMBLISH ENGLISH!
@15, Thoughts:
Which investment bankers was RP Capital representing? I thought RP was only contracted by the Zambian govt to valuate the assets of Zamtel! I have never heard of an interested part in a real estate deal drafting letters on behalf of clients to secure loans, because that would raise conflict of interest issues which you seem blind to here!
RP Capital’s extent of involvement should have ended at giving our govt their honest opinion on what Zamtel was worth. That’s what evaluators are supposed to do, period! Anything beyond that would be or should be considered illegal/suspicious. I believe RP went as far as they did because all they were interested in was the deal to succeed, at all cost, so they can get paid big time—like they did!
Big difference between a realtor and an investment advisory firm. During acquisitions its totally normal for the company structuring the acquisition to act on behalf of it’s client in ways that are not normal for other sectors. Much this depends on the amount of girth a firm is given by it’s client and what its brief is. For example was RP strictly hired as a evaluator or also as an adviser; if the latter then they would also have been involved in structuring any deals reached once the gov’t chose a suitor? Again I’m just making assumptions based on industry norms. Like I said it is difficult to jump to any conclusions before any thing concrete is actually found against them. So far there is no smoking gun, only what some may call suspicious – but even that is debatable.
More reason why the Rupiah govt should have released the valuation report by RP Capital, but they refused to do so for reasons we all can only speculate. None of us, probably including even many of our law makers in parliament who saved at that time, knows the parameters which were ascribed to RP Capital’s operations. This is a big problem we have in Zambia and many, I am afraid to say, African countries. Govt business done on behalf of citizens that do not need secrecy are all done in the dark. Why was it so hard for the Rhupia administration to tell us the details of this deal in order to avoid misunderstandings and innuendo? I know this is not a question for you to answer, but doesn’t things like this bother you?
What some of you must understand is that the zambian people were robbed during the sale of zamtel….and what we want is justice and not your useless rhetoric about who gets to write speeches or how valuations should be done.
Spot on. Zambians are very comfortable with the low life standards they live, they are quick to support wrong doing. The report is very clear, procedure was not followed and some individuals benefited from that. Whats so hard to understand?
No 29, the commission has failed to find what you were robbed. Should this case go to court the Zambian government is going to lose big time. Lap Green will even seek payment for lose of business after winning the case. Watch this space bwana welcome to the real corporate world. Remember this case has already been to the highest court in the land.
Were you a benefactor from the previous regime? Anybody can second guess what B.S you are going to post.
LapGreen stole Zamtel? I don’t see anything wrong on the party of LAPGREEN, at least not in this article. LapGreen was the winning bid! If Zamtel was under valued, that was not LapGreen’s problem.
As for RP Capital, they were contracted by the GRZ to value Zamtel and advise the govt. If they provided answers and wrote speeches for whoever, this is part of the services offered by an advisory firm(like RP Capital). Investment banks and the like do this sort of thing every day.
If any body is at fault here, its’ most likely the politicians.
I now understand why the govt will hesitate to go to court based on the allegations in this article.
Guys, schooling is good :)
Lets’ be objective
Thank you- a voice of sanity!
No 31
The say ignorance is expensive… thats what people do not understand. DRC kicked out First Quantun from the their mine in Congo. FQ has now won the case and DRC will have to pay FQ US$1.8bn. That is international law. This case will not go to court.
Thats what you expect when the country is run by grade twelves…
How do you ask for a loan to sell your property? Why should your property leave you with concessional loans? The buyer must be told. this is what we have? Take it or leave. A buyer must take all its debts, liabilities etc. what was needed was money which was to build aleast 15 hospitals like UTH in each province.
38 Am Bemba,
” How do you ask for a loan to sell your property? Why should your property leave you with concessional loans? ”
Rupiah Banda and team never considered themselves to be in charge of the common good, or the good administration of the Government of Zambia’s resources.
They viewed their stay in office as an opportunity for personal enrichment. That is why they sold 75% of ZAMTEL for 257 million, then bought 25% of ZAMTEL for $334 million, and made up the $77 million difference with a $75 million loan from China.
In other words, rather than receiving a paltry $257 million, they ended up with $75 million in debt. (Not sure what happened to the other $2 million.)
That, is fraud.
There is no way that LAP Green and RP Capital are not aware of this.
PF should apologise to LAP Green and MMD offficials and forget this issue, thats the way forward.
you really dumb…
Zoona ulitako.
People keep saying Zambia was robbed. Really? You actually got the better part of the deal. You were paid for a firm that would surely have died a long time ago if it was not a parastatal. How is it possible that a firm which had an initial monopoly in the telecoms industry is now trailing the newcommers. Just use your logic. How many people use cell-phones? How many people use land-lines? Which market segment is growing fastest and how fast was Zamtel growing in its markets? It was actually the market loser!
Africa’s future rests on mobile connectivity so in other words land-line operators aren’t worth much any more in Africa. You weren’t robbed, you were done a favour. If you can’t see that its because you need an education!
That said if laws were broken, due process should take its course. Thats what the police, courts etc are for.
I just want to add this for some of you who don’t understand how valuation works. When a company acquires a firm, it has to estimate that firm’s net present value. This effectively means the firm is buying the future cash flows of the company. As such there are numerous ways of doing a valuation, my favourite way is the DCF method- discounted cash flow method. With this method you have to project what the present value of a company’s future cash flows are. So for me this is the question…..what was ZAMTEL’s cashflow position.
Many years ago, I went to see a Minister to ask them to officiate at a function. I was just a University student then. I was surprised to hear the minister asking me to draft the opening speech for him concerning the function. I went away thinking, ‘so these ministers, whatever they say is just writen for them!’
Politicians are not very bright people, and the sooner we get rid of politics the better for the world.
so what is the next step ..?
No 39
When Dr Mosokotwane told Sata to realize the report, he was not a fool. Thats the difference between Sub A qualification and a PhD in Economics. What next is for Sata either to shout up or next time he shouts corruption he need to go consult people with brains not Mmembe
I knew Musokotwane is Dr. Buthis performance at Ministry of Finance was pathetic. He is no match to magande. In conclusion, credentials don;t make a good manager.
From what I read here, I don’t see any corruption. It’s like I sell you my car and then I come back to you saying I messed up, I want the deal reversed. The problem with the commission that wrote this report is they already had opinions given to them by Sata even before they had received any evidence. Zamtel was on life-support before LAP Green moved in and now it has been moved from the ICU to a general ward with the prognosis is looking pretty good.
Its a case of catching a kapenta thinking you have caught a shark…. then because you are ignorant the workers on the boat are cheering you that Boss its actually a shark. School is important bane….
And because Sata is a bully no one wanted to tell him that we do not have a case. The all accepted the commission and made some allowances. You could read from the Finance Minister Mr Chikwanda’s statement the Zambia has no case when he said ” We will negotiate with the Libyans”
sata, what a pathological liar.
#s 37 Dojodo and 45 The Engineer (Australia)…Our Lord Jesus Christ conquered the world. He did not hv a paper 2 hz name. Use your certificates nxt time u visit the toilet….as tissue paper. WISDOM is what is important
#51 wisdom tayisa ngaameno yamukanwa, u need to be learned 4 you to have wisdom..somebody who has wisdom bt no knowledge of how privatisation and valuation works will alway do a shoddy job…. knowledge is power.
You should also understand that degrees and theories are not wisdom. #51 has a point
Isn’t it people with so called “education” and “advanced degrees” who plunged the world financial system into trouble which the Western world is still suffering from? Wise men and women warned of the impending doom, but what did they get, the same crap you are advancing here—-educated people have spoken so it must be gospel truth, right? What nonsense is this!
No 52 thank you i rest my case. I am not good at the bible, all i know is God helps those who help them selves… ESUKULU
@10 starved Man: I think you missed the point, RP capital is a private company not Government?? For your information, very much controlled by Banda Boys. On what grounds would they write speeches for the Government officials including the President? Man we all live in Developed World but let’s write facts that mislead our fellow Citizens.
Something is wrong and should be investigated. Look at anomalies in the whole deal. This is a public company not for individuals. Sometimes I really get disappointed with the caliber of so called Zambian Executives. They can’t stand to their grounds, just B leaking to keep their Jobs.
Only a fool can supoort the theft of RB, RP capital and dollar. Please Sata step up the process of getting our Zamtel. These thieves thought Zambians are fools to be raped day light. No no , they were mistaken. Zamtel we are getting it back whether you like it or not…you thieves..shaaa
No 54. I think its you misleading people here. RP Capital was retained by GRZ to advise on the valuation of Zamnet. Its very common practice for an advisor to retrain a client to issue public statements which have either not been reviewed or prepared by the advisor. The reason is that statements issued by the client in this case GRZ can have legal implications on the the advisor i.e RP Capital. Living in a Developed country does not mean you know everything. Ask from people who have been exposed to such deals. You are the one who is misleading your fellow Citizens
Thoughts:
Anything wrong with getting a USD20m fibre optic for free? nything wrong with valuator convincing the seller to settle all debt and leave enough cash flow enough to run a company for one year? Anything wrong for single sourcing the valuators? Anything wrong with projected cash flow not being highlighted in arriving at the value of the property? Anything amiss in not considering the assests (whether in good shape or not)? anything thing wron with the way the Government conducted themselves?
FINALLY anything wrong with end product from both or one side? Yes corporate world, but YES it should be CORRECT too hence the availability of arbitration for aggrieved parties!! So anything wrong with the current pronouncements?
Tell these baffoons who hide behind eloquently written english while the obvious is on their noses. I cannot believe the previous govt can be supported even minutely on this one.
#51 Are you saying fweba sambila ukunya we just wasted our time? That is an insult to education. It is also a blasphemy to liken Christ to this. He was sent by God as a messiah and God made sure he was already equiped with wisdom. We are talking of a common man.
# 55 the Zambian Government failed to run ZAMTEL for more than 40 yrs. get it back,it will soon start sucking money from government coffers and very soon u will bury it, coz nobody will be interested in buying it.
The solution is not selling it. Havent you heard of hiring competent people to run and manage govt entities?
#48 The Engineer (Australia) and #40 Thoughts are evidently enemies of Zambia and most likely not even Zambian but beneficiaries of the the previous and corrupt govt. Take their blogs with a pinch of salt
38:
I agree with you. We Zambians are the losers here. This deal was engineered from outside Zambia. The reason it worked for the ‘engineers’ was that we had greedy and corrupt people in government.
All these guys on this blog who claim to be clever have failed to see anything in this report.
Educated people do not understand much about clever people who trot from country to country robbing and misdirecting governments. We were robbed over Zamtel. We paid to buy shares that we already owned? We borrow to stock some cash in Zamtel before selling it? What business are you in, Thoughts and The Engineer (Australia)?
@60 I’m a software developer with experience in finance.
@57,Like I said- anything that was illegal should be looked at and taken to court- however claims on impropreitry on the valuation are false hence the gov’t focus on fixed assets which are of no consequence in coming to a valuation. Only the present value of future (free) cash flows is important here. My own company has had to go through valuations before and our assets were not considered at any point, the only thing considered was what our discounted free cash flows were. There are other ways of doing valuations like using multiples for example a revenue multiple based on industry averages- but then all of this depends on the particular case.
Are valuation done the same way everywhere and in every situation? You seem to be stack in the mode of “one size fits all” kind of mentality!
No 60. Ignorance is expensive…. and is no excuse. Wait for the case to go to court.
As for the optic fibre I can’t comment on that because we do not have minutes for the discussions that took place nor do we know for what reason that was brought into the deal. But logically the reason for this would probably to make Zamtel more long term competitive and put in a better situation to compete. Also considering that Zambia desperately needs IT infrastructure there is also the chance that it was assumed that Zamtel because of it’s focus on telecoms would have done a better job handling the optic fibre network. Again I have no clue how the transfer of assets was done from ZESCO to ZAMTEL, again if it was contractually done there is nothing wrong with it- but without any knowledge of how this was done we are speculating.
Every one one point that must be made is that every one here wants what is best for Zambia- but we must think critically about this issue instead of taking political sides. Sata has political reasons to make the MMD look like it mishandled this issue and the MMD was political reasons to refute this and show the opposite. The question is what is in fact the truth?
Without access to ZAMTEL’s accounts and Ernst & Young’s report WE ARE ALL SPECULATING. So before you start calling others names and making assertions of corruption or lack of corruption it is better you have concrete evidence to back up your claims. Right now no one has it. If you want to be progressive press the government to release ZAMTEL’s audited accounts for the last 10 years!
#54 SHIEKH; I beg to differ, the private sector does write speeches for government officials, there is nothing wrong with that especially for matters or events that are very technical. A minister will ofetn ask the host or sponsor to draft a speech which can then be modified or expanded to the officials desire
No 60
Mining Engineer with MBA Finance. Specifically corporate Finance. The fact is Zamtel was insolvent. Government was paying its obligation if you think objectively you will realize that Zambia actually got a good deal.
#57 you will not get the answers because intellectuals or may I say self proclaimed educated people on the blog are hiding behind knowing a lot about facebook international law etc. One fact is facebook will never sale 75% at a quarter of its value of its value and still pay 60% to return a 25% shared it already owns. 59# the argument is not because grz failed to run Zamtel for 40 yrs. The idea of selling Zamtel is welcome, the problem it was sold for a song and marred with irregularities and few thieves getting extremely rich and numerous Zambians getting poor unemployed etc.
67, you clearly didn’t understand my analogy with Facebook. I was actually showing that if you compare Apple to Facebook, Apple is massively undervalued by the market despite its phenomenal growth which is pretty much unmatched. My point is that there is no justifiable reason for this undervaluing of Apple. However there is reason to be confident that Facebook is somewhat priced correctly (though quite ambitiously). The reason is that people are confident facebook’s long term growth. The company has doubled its revenue year on year.
ZAMTEL was in a very poor financial state and in such a situation the buyer simply has to opt for the most appropriate deal for them. Haven’t you ever heard of companies being sold for £1 despite large asset bases?
I am also uncertain who got rich off this deal. You are making a lot of accusations without any evidence which is what I have said from the beginning. This case should go to court and everything about ZAMTEL’s financial health should be made public knowledge to stop people speculating.
How can you even tell if ZAMTEL was sold for a song if you:
1. Don’t understand how to value a company
2. Don’t have access to the financials used to value the said company
You are speculating, which would be fine if you based your assumptions on credible evidence- but so far it seems that those of us who are not so quick to shout wolf are actually saying this issue should be investigated but also objectively saying that information given so far is too little to jump to any conclusions.
#66 There’s everything wrong with the private sector writing speeches for govt. Govt is elected to proclaim policy. That suggests a govt that is a pawn. The govt governs every sector including the private sector why should the private sector jump out to direct govt policy? The private sector have their own interests and these most of the time clash with govt’s. The government writes its speeches in accordance with its policies or manifestos of the ruling party.
Colossal sums of money were spent on this transaction..let GRZ grab back our very Zamtel.
Thoughts, Is it possible then for one to assume that You most likely do not have answers to many questions based on the fact that while you may be technically well versed to give sound advise (and I have no reason to doubt your sincerity), You have insufficient information on critical answers to form an objective opinion on the matter albeit it being speculative like most of us. This is probably true even for most commentators on this matter. Sadly when the truth finally comes out, there are very few of us willing to accept our mistakes and these are the most people that eventually use all sorts of tags (insults, tribe etc) in order to hide from that responsibility. We have seen it exhibit its ugly head in the politicians and this disease has permeated the core of Zambian society
@ Thoughts,
I’m really disappointed and appalled by your comments today, I expect far much better from you!!
Utter disgrace!!!
@73, Yes. I’m speculating, but I’m giving the benefit of the doubt because there is too little information upon which to base an objective opinion especially considering that both sides of this issue have political reasons to embellish the other side. My only point has been that the claims of the firm being under-valued though potentially true have been based on faulty arguments- the fact that the government has not obtained a second valuation upon which to ascertain its claims reduces it’s credibility also. I’m totally for the truth being known- which is why I think as much information as possible should be released. But I’m not going to jump to any conclusions.
As for issues regarding Dora and her involvement- she needs to be investigated.
@73, this issue has many facets to it and the government is generalizing it too greatly. For example if it says this transaction was fraudulent does it mean the whole transaction or aspects of it. For example it claims Zamtel was undervalued, how has it come to this conclusion- has it hired a reputable firm to conduct a second valuation to ascertain Zamtel’s valuation prior to the deal and after?
It must state exactly how the optic fibre deal was illegal rather than simply say people were pressured. Question is was the previous government in it’s rights to do what it did or not? If not state how- if yes give reasons why.
It claims single sourcing of the evaluator was wrong- it needs to give greater context as to how RP Capital was engaged, and also needs to qualify whether or not RP Capital did it’s job well or not- for which an independent and reputable firm should conduct this audit.
It claims public officers benefited from this deal. It needs to qualify this statement- who benefited and how did they benefit? What is the verifiable evidence for the malfeasance?
There have been claims that ZAMTEL was insolvent- is this true? ZAMTEL’s financial reports going back at least a decade must be examined and also made public to verify what it’s financial health was.
Overall claims of impropriety must be systematically be proven case by case without any media spin.
A fully documented case must then be brought forward to the courts of law it is shown that there is concrete evidence of foul play. It must then be ascertained whether this foul play was wide-spread or whether it was a few individuals acting individually or alternatively a few individuals collaborating to break the law or many individuals etc.
Basically what I am advocating is for due process to take it’s course and for information to be provided to the public. If this is truly in the country’s best interest then this should not be a problem. The job of the government is to protect ALL it’s citizens as such any per-judgement is equally as abhorrent as corruption in an economy as small as Zambia.
Its imperative for people to be objective and not to insult each other etc.
ALL THOSE WHO THINK THIS IS A WITCH HUNT ARE *****S….CANT YOU SEE THAT THERE WAS A MAFIA LIKE CRIME TO STEAL FROM THE ZAMBIAN PEOPLE…..THE GANG OF MAFIAS INCLUDED-HENRY BANDA,JAMES BANDA,RB,DORA SILIYA,RP CAPITAL,LAPGREEN,ZDA,LUNGWANGWA ,MUSOKOTWANE AND LUWANI SOKO…MR LUWANI SOKO (NOW AT COMMUNICATIONS MINISTRY) ADVISED THAT ALL ZAMTEL EMPLOYEES SHOULD BE RETRENCHED………..WHAT A ROTTEN DEAL….PLEASE GET BACK OUR ZAMTEL SO THAT MOST OF THE RETRENCHED QUALIFIED TECHNICAL PERSONNEL CAN RESUME WORK……NB EVEN THE EMPLOYMENT PROCESS WAS CORRUPT…GO PF GO PF GO SATA …..GET BACK ZAMTEL AND CAGE ALL THE MAFIAS
More angry conjecture and accusation. Please come with concrete evidence.
It claims single sourcing of the evaluator was wrong- it needs to give greater context as to how RP Capital was engaged, and also needs to qualify whether or not RP Capital did it’s job well or not- for which an independent and reputable firm should conduct this audit.It claims public officers benefited from this deal. It needs to qualify this statement- who benefited and how did they benefit? What is the verifiable evidence for the malfeasance?There have been claims that ZAMTEL was insolvent- is this true? ZAMTEL’s financial reports going back at least a decade must be examined and also made public to verify what it’s financial health was.Overall claims of impropriety must be systematically be proven case by case without any media spin.
@ Thoughts here is how The RP Capital Group describes itself as :
“….an alternative investment firm specialising in identifying superior intermediate and long-term investment opportunities on behalf of institutional investors and qualified high-net worth individuals. We have offices in the United Kingdom and United States.
“Our investment team has significant experience investing in regions such as Eastern Europe, the Middle East, Africa and Japan, using a wide variety of strategies. Of particular note is our unique merchant banking approach and our ability to structure a wide range of privately negotiated transactions.”
Note that they did not specialize in rescuing ailing operations, nor in equity mergers between communications companies. They specialized in identifying opportunities for institutional investors and high-net worth individuals. Thus they possessed no unique, desirable expertise to be applied to the Zamtel valuation.
According to reports from noalamina.org/, out of Argentina, which tried hard to figure out who owns what in the global mining business, there may be some reason why these RP Capital people are familiar and single sourced by our Zambian Ministers (MMD gov’t) after all. To quote a computer translation from the spanish original:
” RP Explorer Master Fund/RP MEF , is a London-based hedge fund, managed by RP Capital Partners Cayman Islands Limited . In May 2007, along with Glencore International AG , it set up an SPV “special purpose vehicle”, along with three highly dubious private shareholders (Barry Steinmetz, the Gertner family and Dan Gertler), between them owning 72% of Nikanor PLC , in an attempt to buy out the company. (Cont’d)
Nikanor PLC has a lease (though this is currently under review by the government of DRC Congo for alleged licence infringements) on what could be one of the he richest copper-cobalt deposits in Africa. The takeover failed – thanks to opposition by founding shareholders. [“Saved in the time of Nik?” London Calling, MAC website, 19/5/07].
A few months later, RP EMF stated that it was strongly opposed to a bid by a company called Camec (see Capital Group Companies ), to buy out Katanga Mining Limited – another suspect player in DR Congo, in which RP EMF had a major (15.72%) shareholding. RP EMF believed that “this unsolicited offer of Camec’s shares undervalues the potential of Katanga and the quality of its assets”
Umm….they described themselves as a merchant bank. Merchant banks usually help their clients acquire new businesses. M&A is a typical function of any merchant bank worth talking to. So in this case the GRZ under RB hired RP Capital to conduct a valuation so that it could sell ZAMTEL to a firm seeking to acquire a new firm.
I simply don’t see anything wrong with that. Please come back with concrete evidence :)
Please read on and connect the dots!!!
Okay, all the information you are quoting is unrelated to ZAMTEL. Please come back with concrete evidence on this specific case.
The takeover was supported by a notorious 67-year-old Belgian national, George Forrest (of the Forrest Group ) – who himself held 24% of Katanga Mining [FT 8/11/2007].
The bid was probably also supported by Glencore, which had an exclusive contract to market the output from both Nikanor & Katanga’s mines. An enlarged Katanga Mining could, according to the Financial Times, “become Africa’s largest copper producer by 2011” – as well as “a future target for a big group such as the acquisitive Xstrata , which is 40 per cent-owned by Glencore.” [FT ibid] (since reduced to 35%)
There it is, the missing link as to why these people would be trusted so by veteran cabinet ministers, they are the selfsame chaps who cut all those wonderful “rip off” ZCCM mining deals we are all so grateful for now.
Which rip off ZCCM deals? To my knowledge Glencore’s first investment in Zambia was only done recently.
In any case I’m still uncertain where the wrong doing is. Just seems like a group of investors who wanted to take-over a mining operations- these sorts of things happen all the time. You have shareholders who are for it and against it, which ever side is the majority wins. Perhaps I misunderstand…
pipo who say they see nothing wrong are just looking at one side of the story,we have professional valuators in govt and those advise the politicians of the best approach on zamtel but dora fired them because they seemed like blocking the deal,why go agaist the advise of the attorney general?it is totally wrong for a private firm to write presidential speeches unless you dont understand the deal ,just reading without understanding ,this zamtel saga its a deal which RB and minions understood very well but they need a criminal speech hence asking rp capital .but this shows how incompetentant mmd govt was.so dont compare pf to mmd in terms of intellectualness.pf is every day consulting professionals on all this matter,even if we are to pay,lap green,its a somthing that the zambian govt can se
with the new libyan govt,it can take 20 years but its worthy it,venezula are in it and they are paying just 1/4 of their oil profits to exon mobil.
The great economist Dr Situmbeko Musokotwane, can you please refute the contents of the Zulu report in the light of the fact you did not like the Minister of Justice heading the committee.
Deal with facts only and let us have your side of the story. It does not appear that you even took part in the sale except that you must have provided the money without question.
” The Government further decided to pay for the 25 per cent shareholding it already owned in Zamtel and paid a total $334,440,000 ”
That is one key – the government under President Rupiah Banda paid more for ZAMTEL than it received from the alleged ‘sale’. And they paid it from a loan from the Chinese government. When you sell something, money is supposed to go your way, not to the buyer.
38 Am Bemba,
” How do you ask for a loan to sell your property? Why should your property leave you with concessional loans? ”
Rupiah Banda and team never considered themselves to be in charge of the common good, or the good administration of the Government of Zambia’s resources.
They viewed their stay in office as an opportunity for personal enrichment. That is why they sold 75% of ZAMTEL for 257 million, then bought 25% of ZAMTEL for $334 million, and made up the $77 million difference with a $75 million loan from China.
To put it in another way, instead of receiving a mere $257 million, we end up $77 million in debt.
And that is called fraud.
LAP Green and RP Capital must have known about this, they structured the deal.
#89 – you have posted half of all blogs on this issue – Why such an overwhelmimg interest. If you did not benefit from the sell of Zamtel, I wonder how you cant see sense.
WHAT A SHAME THAT EDUCATED PEOPLE WRITE SUCH NONSENSE, SUPPORTING DAY LIGHT THIEFT??? YOU S.T.U.PID ZAMBIANS SUPPORTING RB AND HIS MAFIA TEAM SHOULD BE CAGED AS WELL. YOU HAVE PRIDE THAT STINKS AMAFI. WONDER WHAT YOU ARE STUDYING / DO IN YOUR DIASPORAS.
FACT IS ZAMTEL WILL BE TAKEN BACK AND BE FOR ZAMBIANS. STU.PID FOOLS DON’T COMMENT ABOUT ZAMBIAN AFAIRS IF YOUR INTEREST IS TO BRING ZAMBIA DOWN. WE HAVE A WORKING GOVERNMENT WITH INTEREST FOR ALL ZAMBIANS. PLEASE LEAVE SATA ALONE AND CONTINUE UKUPIPA UTUKOTE. YOU FOOL…
@94,@95
We have too many educated illiterates here on this comments thread (the most dangerous species to our society) who wouldn’t notice fraud and corruption even if it was being carried out in front of them; honestly how can one NOT see the money trail in these transaction or have the cheek to ask where the wrong doing is; where does one start to explain?….no wonder “wealthy” foreign mine owners like FQM who owe us millions of dollars in unpaid taxes are throwing coins at ZNBC for the natives watch the Africa Cup as that’s what we call progress and development….mere handouts …giving you your own money!!!
WAKE UP!!!
Jay Jay (Whoever you are!!), you have a master mind. You have smelt the trail. There is more you need to piece together and factor into this. But you are on the trail.
Thoughts is blogging for the sake of blogging i.e. superficially.
Don’t give up Jay jay.
‘Lap Green also took over Zamtel as a debt free company with $64million sitting in its bank account which was provided by the Zambian Government.’
Either this is a fabrication or something must have terribly been wrong. Why was the money ‘sitting’ when the company was undercapitalised and loosing maket share to the other 2. Funny enough the money was ‘provided’ by the Zambian governement, did they provide it for any specific project or what>?
In conclusion, I think the public have to be allowed to see the full report. the times article above does not make sense at all but then again i suspect even the full report is a dodgy read.
The Government paid $334 million for the 25 per cent shareholding yet it already owned in Zamtel. How do you pay for something which is already yours?? Then Lap Green only paid $257 million for the 75 per cent shareholding resulting to a Zamtel net sell of $42.6 million.. But RB and his administration were kids, besides Zamtel was a debt free company & Lap Green found $64million in the Zamtel bank account.. To me Zamtel was literally gotten for free
The PF Government should also look at the concessions that Railway Systems of Zambia (RCZ) were given by the Mwanawasa Government. His excellence MC Sata should find and read the document. It will be like looking at the same ZAMTEL picture, RCZ management should have drafted the document for Government just to rubber stamp. Maureen Mwanawasa’s name kept coming up as the ‘BIG’ brain behind this rubbish.
Please bring evidence that Dora and the like benefited, and if they did should pay as individuals. The deal can be clean but if they acted as agents for either Lap Green or RP capital and got a commission then we have to look at what the laws of Zambia say against doing such. We need to see what Zamtel was worth, my sense without looking at the report is that it was valued right but politics and the issue of agents is what is causing these issues. Zamtel was dead before privatization and heavily in debt. Economics of appeasement will get us in trouble as a nation. That is way government should not own anything otherwise it will be used for the wrong reasons. Really wish an independent inquiry was conducted by a reputable firm. Lets wait and see.
ZAMTEL value: $5 billion ($5,000,000,000)
Banda Government pays LAP Green to buy ZAMTEL: $77 million
What is difficult to understand?
Wasn’t the illegality of the sale not so much in the structuring of it as in the extraction of wealth that did not belong to MMD for use in advancing it’s political purposes? It seems to me that’s what the original objection to the sale was.
consultant to valuate it at $5000 (no matter that you paid $40,000!) so I can sell it for $10,000 based on its future usefulness to the buyer, it matters little how the figure was arrived at if I did not have the right to sell your car in the first place! Or if you have given me the right to act as your selling agent, if I undervalue it and take part of the proceeds to do things you have not authorized (wine and dine your wife so as to steal her away from you, for example) have I not behaved unethically, immorally and in fact illegally?
This is the crux of what the government must seek to unearth and prove against the former administration.
I strongly believe that zamtel was not sold on a basis of as is but rather live value.
Ba Thoughts mwalilyako limbi. Even us who chewed with FTJ never saw any wrong doing
Ba Thoughts mwalilyako limbi. Even us who chewed with FTJ never saw any wrong doing Fact is you are posting too much which shows you are MMD trying to sway our thoughts. Wait for the courts instead of waffling
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