LAP GreenN, the Libyan Investment Authority’s international telecommunications arm, Monday filed court papers challenging the Zambian Government’s action to seize LAP GreenN’s 75% share in Zamtel.
In a petition filed before the Zambian High Court, LAP GreenN 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 GreenN, said: “LAP GreenN is very clear that the seizure of our shareholding in Zamtel by the Zambian Government was illegal and unconstitutional, and to the detriment of both Zamtel and its customers. In the 18 months that Zamtel was under LAP GreenN’s management, we 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. The growth and prosperity that Zamtel saw under our management was unprecedented.”
Through major improvements and upgrades in systems and infrastructure, including a 100% increase in the number of base stations, LAP GreenN improved network performance and established a far superior service for Zamtel’s customers. LAP GreenN 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 said: “We are compelled to take this course of action as dictated by the procedure set out in Zambian law. Nevertheless, we sincerely hope that reason can prevail, and that LAP GreenN can resume making its important contribution to providing telecommunications services to the Zambian people. However, to recover the company’s significant investment in Zamtel, LAP GreenN will consider any and all legal options available, if necessary, whether in Zambia or in other jurisdictions.”
The petition filed today outlines LAP GreenN’s 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. In addition, LAP GreenN is claiming for the substantial losses it has suffered as a result of the seizure of the shares.
WHAT THE COURT PETITION IS ALL ABOUT:
(i) It challenges the constitutionality of the compulsory acquisition of LAP Green’s shares mainly on the basis that the same was not carried out for public purpose as contemplated by the Zambian Constitution
(ii) It challenges the legality of the compulsory acquisition under the Lands Acquisition Act mainly on the basis that it was not carried out for public purpose under section 11(1) of the Lands Acquisition Act, that in any case, the Act is the wrong instrument to use in the circumstance of this case and that the decision of the government is generally improper, unreasonable and in breach of the rules of natural justice. As a result of these challenges LAP GreenN requests that the shares are returned to it
(iii) In the alternative claims for compensation for the shares so compulsorily acquired in accordance with section 11(2) of the Lands Acquisition Act
(iv) It asks for an interim order directing the government not to dispose of the assets or shares of Zamtel until determination of the matter
About LAP GreenN
LAP GreenN is the telecommunications investment arm of Libyan African Investment Portfolio (LAP), focusing on the telecommunications sector in emerging markets. It operates mobile and ISP businesses in Uganda, Zambia, Ivory Coast and South Sudan. LAP GreenN is actively seeking to increase its footprint across Africa and the Middle East.
Background of LAP GreenN in Zambia
In June 2010 LAP GreenN acquired a 75% stake in Zamtel, the former state-owned Zambian telecommunications company, for US$257 million. The Government of Zambia retained a 25% stake in the company. LAP GreenN’s acquisition followed an open, transparent and competitive bidding process that attracted bids from eight international investors.
LAP GreenN’s participation in the bidding process, which was overseen by the Zambian Development Agency, was conducted with strict adherence to the established legal framework in Zambia and overseen by an international team of lawyers.
In early 2012, the new Zambian Government announced a reversal of the sale.