25 January 2012
THE Government has taken over the 75 per cent shares held by Lap Green Networks in Zamtel after accepting, without reservation, the report on the findings of the committee constituted to investigate the sale of the telecommunications company.
And Government will restructure ownership of Zamtel to ensure Zambians owned the bulk of the shares in a revitalised company.
Meanwhile, President Michael Sata has, as a result, ordered the dissolution of the board of Directors of Zamtel. The Head of State has appointed Dr Mupanga Mwanakatwe, as Chairperson and acting chief executive officer as a first step to regularise the affairs of the company.
President Sata said in a statement issued by his Special Assistant for Press and Public Relations, George Chellah yesterday that he deemed it desirable and expedient to compulsorily acquire 75 per cent shareholding of Lap Green Network in Zamtel.
Mr Sata said the appropriate notice under the law has been given.
"Government having accepted without reservation the report on the findings of the committee investigating the sale of Zamtel, President Sata has deemed it desirable and expedient to compulsorily acquire the 75 per cent shareholding of Lap Green Network in Zamtel," Mr Sata said.
The President said a new board will soon be put in place to give the policy guidance and direction to management and staff. He has further directed management to urgently address the plight of Zamtel workers.
"There should be no loss in jobs except through retirement and attrition while maintaining the highest levels of discipline and respect for law.
"Zamtel workers have served with distinction in an area of sophisticated information technology. This has been so from the inception of the company," President Sata said.
He reiterated his relentless commitment to his duty as custodian of the interests of the Zambian people and assured Zamtel workers that their traumas and anxieties would be brought to an end.
The take-over of Zamtel by the Zambian Government follows findings by the commission of inquiry constituted to investigate the sale of the company concluded that the transaction was "fraudulently and illegal."
The commission chaired by Justice Minister, Sebastian Zulu established that the sale was conducted in an incompetent and misleading manner that resulted in the company being grossly undervalued at US$38 million despite having a book value of $81 million.
The report revealed that audited Zamtel accounts dated March 31, 2009 pegged the book value of the company's fixed assets - that is only the property, plant and equipment at $81 million (K412, 072, 000,000).
The report states that the $81 million was just the 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 $38 million 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 of $334,440,000 in what was termed as Tax Shares and Subscription Amount while Lap Green Network 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 percent 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 five per cent commission of the $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 Network also took over Zamtel as a debt free company with $64 million sitting in its bank account which was provided by the Zambian Government.
The report further states that the Rupiah Banda government went ahead to sell Zamtel despite the fact that Lap Green Network had failed all three of the mandatory pre-qualification criteria during the bidding process and as a result should have been disqualified at the preliminary stage.
The three requirements are:
(a) A minimum of five years of licensed operation in the telecommunication industry;
(b) Have more than three million subscribers on fixed, mobile or fixed wireless networks;
(c) A minimum of $250 million shareholders' equity for private entities or a minimum market capitalisation of $500 million for public listed entities.
RETRACING THE ZAMTEL DEAL
- 21/01/09- Dora Siliya tells Times of Zambia in an interview that Government has started evaluating Zamtel assets and liabilities in preparation for the coming on
- board of an equity partner.
- 11/02/09- Former President Rupiah Banda urges Zambians to give Dora Siliya chance to look for a strategic partner in Zamteal without interference.
- 13/02/ 09- Dora Siliya tells Parliament that she acted within the law when she signed the Memorandum of understanding (MoU) with RP Capital for the evaluation
- of Zamtel assets.
- 16/02/09- William Harrington petitions to have Dora Siliya investigated.
- 17/02/09- George Kunda springs to the defence of Dora, saying she acted within the provisions of the law when she signed the MoU with RP Capital Partners.
- 26/02/09 - Chief Justice Ernest Sakala constitutes tribunal headed by Supreme Court Judge, Dennis Chirwa, to probe Dora Siliya of allegations of abuse of
- office and corruption.
- 16/04/09- Tribunal clears Dora, but says her failure to comply with Attorney General's advice is a matter for the President to deal with.
- She breached Article 54 (3) of the constitution by failing to heed the Attorney-General's advice.
- 21/04/09- Dora resigns as Communications and Transport minister.
- 16/06/09-Lusaka High Court, Judge Philip Musonda quashes Dennis Chirwa tribunal findings that Dora Siliya breached the Republican Constitution by failing
- to heed the Attorney-General's advice.
- 24/07/09- Rupiah Banda tells Zamtel employees in Ndola that Cabinet approves the sale of 75 per cent shares in Zamtel.
- 10/06/10- Rupiah Banda says the partial sale of Zamtel to Lap Green is irreversible.
- 30/09/11- President Michael Sata directs Justice Minister to probe the sale of Zamtel and that report should be ready in 30 days.
- 17/11/11 - Commission of Inquiry constituted to scrutinise the sale of Zamtel presents report to President Michael Sata, establishes that the transaction was fraudulent and illegal.
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