International Trade Consultant Trevor Simumba has urged the Zambian government to pay the Libyan Government the US$395 million it invested in Zamtel.
And the internationally recognised head of Libya’s $67bn sovereign wealth fund is to appeal to the UN in an attempt to allow the fund to manage its frozen assets.
Mr Simumba said Zambians need to stop being so misinformed about the LapGreen issue.
He said LapGreen Networks is an existing company owned by the Libyan Investment Authority which is a sovereign wealth fund of the Libyan Government.
Mr. Simumba revealed that the LIA is pursuing all its assets including in Uganda and right now has an ongoing case with Goldman Sachs for over $1 billion.
“ZAMTEL is one of the assets they have been pursuing and there is need for soberness in handling this issue. Zambia entered into a consent judgment and it must pay,” Mr Simumba said.
Mr Simumba added, “Libya does have a Government and it is even appealing to the UN. It’s not everything that is fraudulent. Minister Mutati just needs to make sure he pays to the rightful authorities.”
And sources at the Ministry of Finance have revealed that LAP GreenN has written to Finance Minister Felix Mutati expressing displeasure over his claim that the Zambian government was in the process of settling its US$395 million debt owed to the company when in fact “no single cent” has been paid.
This is contained in a letter of claim signed by LAP GreenN chairman Dr Faisel Geigab.
Dr Geigab disclosed that the Zambian government through the Minister of Finance had been sending bank transfer documents, but no actual cash was remitted to LAP GreenN.
“The now Minister of Finance was a member of Cabinet of the Zambian government at the time LAP GreenN acquired its shareholding in Zamtel. He is very familiar with the LAP GreenN matter. It would have been more useful of him to give a more comprehensive statement in parliament last month. We say this because the recent conduct of the Minister of Finance with respect to addressing the GRZ obligations to LAP GreenN has raised considerable concerns regarding the good faith and integrity of the minister,” Dr Geigab stated.
“For example, we have been sent bank transfer documents signed on behalf of the minister instructing its bankers to transfer funds to us, however, no actual payment has been received. The Attorney General, Mr Likando Kalaluka, State Counsel, has similarly made commitments on behalf of the GRZ that payments would be made to settle the GRZ’s indebtedness in LAP GreenN, however, not a single cent has been received as yet. We have material evidence to this effect.”
He stated that government’s conduct was unacceptable and it was denting Zambia’s reputation on debt repayment.
“The conduct of the GRZ towards our matter is totally unacceptable and constitutes a breach of the Zambian Constitution and the international law. It raises questions regarding the credentials of the GRZ, including its commitments to Zambia’s constitutional democracy and democratic governance. LAP GreenN is taking active steps to pursue full compensation recovery from the GRZ locally in Zambia, within Sub Saharan Africa and internationally. As the Zambian government is part of the international finance and investment community, it is indifferent to its serial defaults of such substantive sovereign debt obligations will not help its reputation. For example, the serial default payments could have an adverse effect on its international standing, including with international funding institutions, credit rating agencies and G20 states (several of which are already aware of this matter),” Dr Geigab wrote.
He warned that there would be costly repercussions on the Zambian economy for the ‘serial defaults’.
Meanwhile, the internationally recognised head of Libya’s $67bn sovereign wealth fund is to appeal to the UN in an attempt to allow the fund to manage its frozen assets, despite the violent political rivalries plaguing state institutions.
Ali Mahmoud, head of a steering committee appointed by the UN-backed government to oversee the Libyan Investment Authority, said the fund was “losing a lot of money” because it was unable to manage old equity and bond investments.
The LIA’s assets have been under UN sanctions since the 2011 uprising against Muammer Gaddafi and any chance of them being unfrozen have previously been dashed by the power struggles and conflict that erupted after the dictator was toppled.
The chaos has affected the central bank, the National Oil Company and the LIA with officials backed by political adversaries bickering over the leadership of the organisations and their resources.
“There are alternative opportunities that are being missed and in some cases there are deposits in banks that are past their maturity on which we are being charged negative interest rates,” Mr Mahmoud told the Financial Times.
“This has caused us big losses especially on the bonds and long-term investment portfolios.”
But Mr Mahmoud has two domestic rivals each claiming to be the rightful leader of the fund — disputes that reflect deep political divides.
Another figure claiming the leadership of the LIA is Ali Shamekh, who was appointed the fund’s chief executive in August by rival authorities in eastern Libya.
He says there are possible plans to open an office in London in an attempt to talk to western governments about lifting the sanctions on the LIA.
He says the sanctions affect about 65 per cent of its assets, mostly cash and equities in countries including the UK, US and Italy.
The fund has investments in about 550 companies, including hotels and downstream oil operations in Africa and the Middle East, Mr Shamekh says, and several subsidiaries, including Tamoil and Libyan Foreign Investment Company.