Zambia, ABSA US$100m scam– who is involved?

Jean-Pierre Bemba

Jean-Pierre Bemba

On 15th August 2003, a motion to impeach President Levy Patrick Mwanawasa SC was moved in the National Assembly by UPND Chief Whip, Crispin Sibeta.

Sibeta laid impeachment charges that accused Mwanawasa of corruption, nepotism and breaches of the Constitution.

Rooted in the twelve allegations and twenty five counts, was one corrupt allegation that President Mwanawasa received kickbacks from an oil firm and importer of crude oil, Trans Saharan Trading (TST).

MMD Vice- President and Kapompo West Member of Parliament Enoch Kavindele laid 32 documents on the table in Parliament supporting an Opposition impeachment motion against his former boss and MMD President, Levy Patrick Mwanawasa. Many thought Kavindele was suffering from a poor taste of sour grapes. He was fired three months before this motion as Republican Vice-President by Mwanawasa.

Mwanawasa accused Kavindele of practising corruption.

Among the documents Kavindele laid on the table were two books written by Simon Zukas and Andrew Sardanis entitled ‘’Into Exile and Back’’ and ‘’Africa- Another Side of the Coin’’.

Kavindele stated that the 32 documents he had laid on the table of Parliament were to show that Mwanawasa was inherently corrupt and that some of his nefarious activities could be traced to his time when he was practising as a lawyer, his tenure as Republican Vice-President under President Frederick Chiluba and his presidency since 2002.

He recounted how Mwanawasa had tasked a team comprising himself, and Finance Minister Emmanuel Kasonde to raise party funds for the MMD.

Kavindele stated that they duo raised money from many sources including Trans-Saharan Trading (TST) who gave the MMD USD100, 000.00.

Kavindele said that of this amount, USD60, 000.00 was given to Mwanawasa in person through Emmanuel Kasonde. Other amounts were given to MMD National Secretary, Newstead Zimba and to State House Principal Private Secretary; Jack Kalala who was given K20million.

Kavindele also accused Mwanawasa and his wife Maureen of being involved in the importation of 30,000 metric tonne maize worth USD7, 350,000.00 through their ‘friend’. He stated that the going rate for maize was USD125.00 per tonne but Mwanawasa had instructed that the importer be paid USD245.00 per tonne which had resulted in an over payment of K17 Billion. (Daily Parliamentary Debates for the Second Session of the Ninth Assembly dated Friday August 15th 2003).

He stated that this importation of this K37 billion maize was done by Minister of Agriculture Mundia Sikatana despite the protestation by Finance Minister Emmanuel Kasonde, who stated that Zambia had a bumper crop and the maize importation was too expensive for millers.

This contract was given to Maureen Mwanawasa’s relation Eddie Chibweshya through his South African company called Space Ages International without Sikatana allowing any tender procedures citing ‘directives from State House’.

Kavindele also accused Mwanawasa of showing his corrupt tendencies as early in 1992 where he procured University of Zambia land without payments and had since built his house there.

Mbita Chitala defended Mwanawasa strongly calling the impeachment charges as fictitious. He accused Kavindele of benefitting from oil and Maize transactions.

He further accused Kavindele of giving illegal authority to LAMISE Investments to import 4500 metric tonnes Maize. He charged that the law would visit Kavindele for his ‘corrupt dealings’ emanating from his time whilst he held the position of Republican Vice- President.

Chitala also defended the allegations that Maureen had received K700 Million government funds and used it on her private initiative in the Maureen Mwanawasa Community Initiative (MMCI) stating that the ‘’ the work of the First Lady is outstanding. Her institution was assisting vulnerable people.’’

He continued that: ‘’In the first four provinces she has so far visited, namely Southern, Western, Northern and North-Western provinces, people appreciate her work.’’ He cited Choma District as a shining example of her work where she had created 166 environmental conservation women’s clubs.’’

Chitala was however silent on why K700 million government funds were used for these private activities.

Chitala also defended Mwanawasa for not paying Zambia National Service (ZNS) K160 million the outstanding bill of grading the road to his Teka Farm joking that ‘’the President never commanded ZNS to grade any road to his farm or do any work or project on his farm whatsoever.’’

Chitala said all the twelve allegation and their 25 counts were mere fantasy and were premised on ‘falsehood’.

A motion to impeach Mwanawasa on charges of corruption, nepotism and violating the Constitution was defeated by a vote of 92-57.

Bob Sichinga, Edith Nawakwi, and other opposition members of parliament supported the motion. Eric Silwamba, Derrick Mbita Chitala and Dipak Patel viciously opposed the motion.

Who could have believed at this early stage that Mwanawasa was corrupt and nepotistic? Who could have believed that Mwanawasa’s wife, Maureen was involved in maize importations? Who could have believed the charges against Mwanawasa or his administration especially that he had made the fight against corruption as his hall mark policy?

Many characterised the impeachment motion, though serious, as attempts by Mwanawasa’s enemies to stop him from the noble cause he had embarked on of fighting corruption!

TRANS SAHARAN TRADING (TST), THEY CAME, THEY STOLE, THEY LEFT!

Trans Saharan Trading obtained offices in Nangwenya Road, Lusaka in August 2001 and cited in their documents their lawyers as MNB partners (Mutembo Nchito, Nchima Nchito, Dr. Patrick Matibini and Elijah Banda).

Although ZNOC where the sole importer of crude oil in Zambia, TST anticipated that they would take ZNOC’s place.

When Mwanawasa assumed office he quickly dissolved the Zambia National Oil Company (ZNOC) accusing it of insolvency and stating that it could not meet its huge liabilities. ZNOC was a parastatal, designated with the sole duty of importing crude oil to Zambia

On 8th April 2002, Minister of Finance Emmanuel Kasonde announced that:

‘’By a special resolution of the shareholders’ (Minister of Finance) meeting, the Zambia National Oil Company (ZNOC) has been wound up and dissolved. This action arises because of an urgent need to rationalise and streamline the supply of crude oil to Zambia to maintain a permanent and sustainable supply of petroleum products to Zambia.’’

Earlier Minister of Energy Kaunda Lembalemba had informed the nation that INDENI and TotalFinaElf would take over the role of ZNOC. He announced that an interim tender had been awarded to the two firms to import 180,000 metric tonnes of crude oil. TOTAL held 50% shareholding in INDENI.

He however emphasised that this contract was a short term measure in the wake of the ‘’collapse of ZNOC’’.

Treasury documents showed that ZNOC owed ZANACO USD45million and USD20MILLION to Standard Chartered Bank. The total debt burden of ZNOC was estimated to be in excess of USD100 million.

Fred Mmembe and Edith Nawakwi had accused President Frederick Chiluba and his Assistant for Economic Affairs Donald Chanda of benefitting from transactions at ZNOC. Donald Chanda was Board Chairman for Indeni, TAZAMA and ZNOC.

Chiluba defended this position comparing it to the USA where fuel as a strategic commodity, is under the Presidency’s office.

Zambia being a landlocked country will continue to have perennial fuel problems and therefore the building of strategic reserves, the monitoring of its prices and the efficient importation of crude oil (feedstock) for its refinery at INDENI is vital. The processing of this crude oil and the build up of its processed reserves remain a key driver to a stable economy.

Zambia requires about 600,000 tonnes of oil per year with the bulk used as heavy fuels in the mining sector.

Some people had encouraged Mwanawasa to dismantle ZNOC describing it as ‘‘Chiluba’s corrupt infrastructure’’.

ZNOC was duly dissolved.

TST CLINCHES THE DEAL – AUGUST 2002

In August 2002, in murky circumstances, the Zambian government awarded Trans Saharan Trading (TST) to be the sole supplier of crude oil to Zambia canceling the contract earlier given to regional suppliers TotalFinaElf in March 2002.

AMALGAMATED Bank of Southern Africa (ABSA) gave a finance facility of USD100million to TST. This facility was given following the financial guarantees given by the Republic of Zambia through Bank of Zambia.

ABSA was invited in 2001 to provide the finance facility for ZNOC’s oil procurement following their failure to secure a long term facility with local banks. ZNOC had an haphazard and ad-hoc arrangement with ZANACO.

However ABSA were ‘advised’ to abandon the negotiations with ZNOC as it was ‘a likely sinking ship.’

Following the dissolution of ZNOC in March 2002 ABSA were shepherded to TST!

ABSA signed the USD100 million finance facility following assurances from the new government that TST would be the sole supplier of crude oil importation to Zambia. To this effect Government issued the necessary guarantees and securities.

The deal with TST included the acquisition of feedstock from the suppliers, operations, and payments to TAZAMA for pumping and for storage.

In effect the government guarantees gave TST the sole mandate to procure, import, refine, market and sell the feedstock

In August 2002, TST proceeded to import its first Cargo worth USD20million promising Zambians of cheap pump prices.

Soon after its first importation, TST made a ‘donation’ of USD100, 000.00 to the MMD. Vice- president Enoch Kavindele received the money and gave Minister of Finance, Emmanuel Kasonde USD60, 000.00 for onward transmission to Mwanawasa.

Mwanawasa received the USD60, 000.00. Later Principal Private Secretary Jack Kalala also received a K20million. The balance was given to the MMD National Secretary Newstead Zimba.

TST DEAL ABRUPTLY CANCELLED-APRIL 2003

On 15th April 2003, Mwanawasa announced that he had used his presidential decree and powers to prematurely terminate the supply contract Zambia had with TST.

He also banned minsters and their relatives from doing business with government. ‘’If you (government ministers) business is more important for you, it is better for you to resign as you cannot have it both ways.’’

There were allegations that his Vice- President, Enoch Kavindele was involved in the setting up of TST and VODACOM in Zambia. Kavindele denied such links stating that his son Enoch Kavindele Junior was the one connected to the deals!

After this public attack, Kavindele issued a statement condemning his boss and accusing him of practicing dictatorial tendencies by establishing the Constitution Review Commission (CRC) without consulting his colleagues in Cabinet.

It was inevitable. The bad blood and public utterances were symbolic of a serious rift between the President and his Vice.

On May 28th 2003, Mwanawasa addressed the nation making dramatic announcement that he had fired his Vice-President Enoch Kavindele and his Minister of Finance Emmanuel Kasonde.

He ;later replaced them with Nevers Mumba (Vice- President) and Ngandu Peter Magande (Minister of Finance and National Planning).

In his letter of dismissal to Kavindele, Mwanawasa accused him of ‘’failing to share the vision of high integrity.’’

He accused Kavindele of receiving a donation of USD100, 000.00 from Trans Saharan Trading (TST) on behalf of the MMD and only declared USD60, 000.00.

He stated that when he confronted Kavindele about the irregularity in money received from TST, he said Kavindele told him that he intended to use the balance to ‘’repair MMD vehicles procured in 2001 which were now in deplorable condition!’’

He also accused Kavindele of authorising TST to import to Zambia two shiploads of 90,000 metric tonne of crude oil without his (Mwanawasa’s) authority.

He further accused Kavindele of conniving with Finance Minister Emmanuel Kasonde to give Sable Transport a maize contract without following tender procedures and using this transaction for their personal pecuniary benefits.

He also demanded that Kavindele pays the debt of K206 million he owed the Zambia National Service (ZNS) for construction of a dam and rehabilitation works done at his farm.

Kavindele responded by declaring himself Party President. He stated that Mwanawasa was ‘forgetful’ hence his denial of knowledge about the specific circumstances surrounding the USD100, 000.00 donation from TST.

On his address to party cadres that marched to State House on June 1, 2003, Mwanawasa justified the dismissal of his Vice President, and Minister of Finance.

He said that ‘’you can accuse me of all sorts of things and call me all sorts of names but I am not worried because my only worry is the welfare of the people.’’ He continued: ‘’I don’t care if the decisions I have made make me unpopular, I want to leave a legacy that Zambia had a President who did not tolerate indiscipline. I can now see a corrupt free Zambia which these good-for-nothing individuals failed to do in the ten years!’’

He lamented that; ‘’that I sometimes feel isolated when I am being attacked. But I know that the silent majority are with me. I will not be pushed into resignation like last time. I resigned because I was frustrated and I was not the final decision maker.’’

This speech symbolises Mwanawasa’s puzzling double faced personality. The sincerity of his words and the naivety of his demeanour portrayed a ‘truthful’ picture and his explanations appeared sound. However this public image contrasted drastically with his actual and private activities.

Mwanawasa spoke with a stutter and was more believable than the ‘fast talking’ political opponents and ‘crooks’ he usually accused of corruption.

Mwanawasa appeared more credible and vulnerable than those keen to expose his corrupt nature. Few questioned his long standing relationships with shady dealers and characters going back to his lists of drug dealers and peddlers that formed his clientele at his law firm.

For example, in this instance he had received a bribe of USD60, 000 from TST. Mwanawasa knew who TST were and what they represented yet he chose not decline this ‘donation’ to the party!

His anger was that Kavindele had declared only USD60, 000.00 instead of USD100, 000.00! The principle of the MMD receiving this bribe characterised as a ‘donation’, from a firm with a suspicious government oil deal was never a subject of condemnation as shown by Mwanawasa’s own letter!

At the same time, his wife Maureen Mwanawasa was involved in the importation of 30,000 metric tonne of Maize without any tender process, through Eddie Chibweshya and his Space Ages International worth over USD7 million.

Yet he chose to fire his Minister of Finance, Emmanuel Kasonde for giving Sable Transport the importation of 4500 metric tonnes of maize without tender process!

Mwanawasa owed the Zambia National Service (ZNS) K160 million yet he directed that Kavindele promptly settles his K206 million debt with it!

The selective nature of using corruption allegations against his political enemies increasingly become apparent.

Many could not reconcile the image of Mwanawasa who received wide support for ‘his fight against corruption’ from donors, civil society and many Zambians and the other image of a Mwanawasa who was increasingly entangled in his corruption web and, that of his wife and his officials.

He directed ACC to investigate Kavindele and TST. Nothing came out of these investigations

TST- WHO IS TST?

Diamond Works was a Canadian company based in Vancouver. It was listed on the Canadian Stock Exchange. It owned Trans Sahara Trading (TST).

The Canadian listing was designed to give it credibility.

The company is owned by Tony Buckingham and his partner Antonio Teixeira. Diamond Works was financed by U.K’s Lyndhurst ltd, a company controlled by a consortium led by Teixeira.

Buckingham also owns Heritage Oil and Gas involved in Kazakhstan, Russia, Gabon, Congo and Uganda.

The duo, Buckingham and Teixeira operate a complicated maze of offshore subsidiaries and joint ventures such as TST.

Antony Teixeira is a pivotal businessman in Diamond Works and TST. He is known by the United Nations for his criminal activities in war-torn areas and has been cited in many indictment documents as a businessman dealing in blood diamonds, criminal networks, gun-running and mercenary operations (He owned Executive Outcomes- the official Mercenary firm recently banned in South Africa).

Diamond Works owned mines in Sierra Leone, South Africa, Angola, Congo and Central African Republic (CAR).

Antonio Teixeira is the brother-in-law to Congolese Warlord, Jean-Pierre Bemba. The 47 year old Bemba is married to Lillian Teixeira. He heads a rebel group turned political party – the Movement for Liberation of Congo (MLC).

The Teixeiras are Portuguese businessmen running ‘businesses’ in war torn countries. They are war profiteers! It is for this reason that Bemba had strong backings from South Africa, Libya, Russia and Portugal organised by Antonio Teixeira.

The diamonds mined in these war-torn or conflict areas, such as Congo, Central African Republic, and Sierra Leone are stamped as certifiably clean to escape the rigours of the international certification system –the Kimberley Process.

Jean Pierre Bemba nearly won the 2006 Congo Presidential Elections. He got 42% against winner and incumbent President Joseph Kabila’s who got 58%.

Bemba was indicted in 2008 and arrested by the International criminal Court (ICC) for serious charges of crimes against humanity and war crimes in the Central African Republic (CAR) dating back to 2003. He is currently in The Hague facing these charges.

Bemba’s father Jeanot Saolona Bemba is a businessman and Congolese politician in his own right who held ministerial portfolios in Mobutu Seseko and Laurent Kabila’s government. His sister is married to Mobutu’s son Nzanga.

Teixeira continues to operate in Africa and feting heads of states with ‘small bribes’.

Diamond works has been renamed Energem Resources. This is common to international criminals and conmen who constantly change names and companies to escape scrutiny.

CONCLUSION

The TST deals in Zambia were conducted in a criminal manner, typical with TST’s known international reputation.

It operated and imported crude oil in Zambia without a clean tender process, without obtaining a licence from the Energy Regulation Board (ERB) and without obtaining a correct type of feedstock needed by INDENI to crack it.

In April, May and June 2003, TST caused serious fuel shortages and held Zambia at ransom when its lawyers obtained an injunction restraining INDENI from importing crude oil until TST’s feedstock on a Ship Ruby 111 was pumped, refined and sold.

Mwanawasa had canceled the deal and directed that any official that ‘touched’ the TST oil would be fired.

At this stage, Mutembo Nchito had also sued TST for its failure to pay  legal fees amounting to USD 738,750.00 due to MNB. TST was now being represented by Dennis Wood and Vincent Malambo.

At the heart of this scandal are the questions that beg answers. Who gave the authority for the supply contract given to Trans Saharan Trading? Who issued the guarantees and securities to ABSA?

How was Mwanawasa allowed to cancel the supply contract even in the face of this legal nightmare that would result in Zambia losing USD74.3 million? Was Mwanawasa encouraged to renege on the TST deal so that someone would walk away with USD100 million from ABSA?

Other than Mwanawasa, all those involved in this scandal are alive and should be made to account or proffer explanations as this matter is a serious threat to Zambia’s poor economy.

In fact records show that government, signed guarantees with ABSA in March 2002, before TST even won any tender. At this stage the supply contract was given to TotalFinaElf following the dissolution of ZNOC.

Further the government guarantees with ABSA were ‘discharged’ in October 2002, two months after TST got its first contract!

This withdrawal was unilateral and appears illegal as terms and conditions of the facility agreement could not allow such an action.

When ABSA placed TST under receivership, in a last ditch attempt to recover USD100 million, TST had 40,000 metric tonnes of stock at INDENI and TAZAMA.

Energy and Water Development Minister George Mpombo issued a statement assuring the nation that KPMG had since been appointed to oversee the TST affair and KPMG officials in Hastings Mtine and Zahir Sheik were appointed Receiver Managers to carry out the exercise on behalf of ABSA.

Mpombo assured management at TAZAMA and INDENI that lawyers Vincent Malambo (For TST) and George Kunda as Attorney General (For government) would handle all legal issues to ensure that Zambia did not incur any unnecessary financial burden from the TST deal with ABSA.

He assured the nation that the stocks would be sold to offset any obligations TST had with ABSA.

So what happened? What happened to the stock at INDENI and TAZAMA? How come Zambia still owes ABSA USD74.3 million?

During this process ABSA even lost the bid to buy ZANACO when Mwanawasa called off the negotiations.

When ABSA were shortlisted as key buyers and preferred bidder of ZANACO, the plans were scuttled when the TST deal was thrown in the works.

Mwanawasa announced at a press conference he held on 16th June 2004 that ABSA had been dropped as preferred bidders to buy ZANACO because ‘’they were tying the TST debt to the purchase of ZANACO’’.

Mwanawasa stated that he had called off the negotiations and that the claim by ABSA that government owed it money was ridiculous and amounted to threats! He said: ‘’such investors who use threats are not welcome!’’

Yet his own government had issued the guarantees to ABSA in 2002!

Mwanawasa even mocked ABSA for using his counter-part, Malawian President Bakili Muluzi. He said he had informed Muluzi that ABSA were welcome to ‘’re-open the negotiations as long as Zambia was not placed in a weaker position through threats.’’

He informed the nation that the Zambian government had also opened criminal investigations against TST officials.

This clearly was a complicated fraud that allowed international criminal fraudsters to obtain USD100 million from ABSA using Zambia’s goodwill, guarantees and securities and walk away while Zambia was left to assume the liabilities. Zambia now faces the misfortune of paying ABSA for this fraud when the criminals in Zambia and those at Diamond Works laugh all the way to the bank!

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