Zamtel report exposes more anomalies

THE report by the Commission of Inquiry into the sale of Zamtel hasrevealed more anomalies, including one in which an official from RPCapital Partners of Cayman Island, issued directives to high rankingsenior Zambian Government officials and drafted ministerial andpresidential speeches on matters surrounding the Zamtel deal.

The 112 paged report states that the committee tasked to probe thesale of Zamtel discovered numerous electronic mail (e-mail)correspondence from a Peter Heilner, issuing directives to seniorGovernment, Zambia Development Agency (ZDA) and Zamtel officials.

“The committee has uncovered numerous email correspondence from RPCapital’s Peter Heilner issuing directives to high ranking and seniorGRZ, ZDA and Zamtel officials, set timetables and tasks, draftedministerial and even Presidential speeches and letters andorchestrated the deployment of personnel to strategic positions anddepartments,” 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 theentire 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 theproperty, plant and equipment at US$81 million (K412,072,000,000).

The report states that the $81 million is just a book value and notthe market value of Zamtel’s fixed assets which would be expected tobe considerably higher than that.

“The committee finds it difficult to understand how RP Capitaladvisors could arrive at a value of Zamtel’s fixed assets of $38million in the absence of conducting a thorough, detailed andprofessional valuation of Zamtel’s fixed assets,” the report reads.

The Government further decided to pay for the 25 per cent shareholdingit already owned in Zamtel and paid a total $334,440,000 in what wastermed as Tax shares and subscription amount while Lap GreeN only paid$257 million for the 75 per cent shareholding of which the Governmentwas only entitled to $42.6 million translating to 16.6 per cent of thesale value.

The Government has to date only received a cash sum of $15 million andthat RP Capital received more than $12.6 million based on five per cent of $257 million.

The report reveals that the Zesco optical fibre network assets valuedat 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 ZambianGovernment.

And giving examples of correspondence, Press releases and speechesprepared by RP Capital’s Mr Heilner for the Government, the reportattached a letter drafted by him and signed by former president RupiahBanda on November 9, 2009 to Chinese President, Hu Jintao, asking fora loan from the China Export and Import Bank.

In the draft letter, Mr Banda was asking his Chinese counterpart toassist the Zambian Government obtain $75,424,323 concessional loanfrom the $10 billion programme for infrastructure in developingcountries to cover the amounts owed to Zamtel’s Chinese equipmentsuppliers, Huawei and ZTE for projects that the two companies were inthe process of completing.

“I write to you to request your assistance in a matter that is ofnational importance to the Republic of Zambia. As you may be aware,the Government of the Republic of Zambia is currently in the processof privatising Zamtel which has severely underperformed in recenthistory.

“This privatisation will revitalise the telecommunications sector inZambia through increasing investment and will contribute substantiallyto the development of Zambia as whole,” read the letter drafted by MrHeilner on behalf of former president Banda to President Hu.

The letter stated that the sale of Zamtel was of considerable urgencyin order to ensure the success of the company and on-going developmentof Zambia.

“I would like to request your support in obtaining approval from theChina Export and Import Bank in respect of Zambia’s application,” theletter read.

Another document drafted by Mr Heilner was a Press statement by thethen 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 communicationsAuthority of Zambia (CAZ), ZICTA, had set out two ways in which theyintended to encourage the deployment and usage of ICT products andservices in Zambia.

Prof Lungwangwa said the first was through careful management of thelicensing regime and that CAZ intended to issue no additional fixed ormobile licenses for the foreseeable future.

He said the second was through pricing and that CAZ intended to useits powers as set out in the new ICT Act to intervene in the wholesalemarket that existed between telecommunications operators.

Mr Heilner is also alleged to have provided answers to parliamentaryquestions, 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 timeof privatisation.


Share this post