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Friday, July 3, 2020

Dr Mutesa questions Government’s capability to pay LAP Green $480 million

Economy Dr Mutesa questions Government's capability to pay LAP Green $480 million

Zambians for Empowerment and Development (ZED) President Fred Mutesa
Zambians for Empowerment and Development (ZED) President Fred Mutesa

Zambians for Empowerment and Development (ZED) leader Fred Mutesa has questioned whether government has the financial capacity to compensate former majority shareholder in Zamtel LAP Green of Libya $480 million.

Dr. Mutesa says the claim of compensation by LAP Green has not come as a surprise as it was anticipated.

The opposition leader says government should have avoided such consequences if only it had found better ways of handling the matter.

Dr. Mutesa has however, noted that as things stand it would be better to wait for the matter to be looked at by the courts of law.

LAP Green has challenged the decision by the PF government to seize its 75% shares.

In the petition filed in the Lusaka High Court on Monday, LAP Green has outlined its 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.

The Libyan firm is additionally claiming for substantial losses it has suffered as a result of the seizure of the shares.

LAP Green Network has disputed the legality of the Zambian Government’s claim that LAP Green%u2019s shares were taken for public purpose.

QFM

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45 COMMENTS

  1. Oh, come on…. after PF raises its $500m bond there will still be $20m left for national development. What’s the problem?

  2. RB sells ZAMTEL to LAP Green almost for free. SATA grabs it and gives it back to the “Zambian pipo” (Winter Kabimba as the new board chairman). Lap sues gov claiming $480 millions!! Do u pipo see whats wrong with his picture? I would rather give ZAMTEL to Lap Green for free than pay $480 millions to have Winter Kabimba who has never managed a business run it to the ground!!

  3. Most Zambians are quite ignorant and backward. Being sued by a company that illegally acquired a parastatal does not imply that you will necessarily lose the case. The law says that you cannot enforce a contract that is illegal. After all, how can an armed robber claim that he lost some money at a house he was carrying out an operation!

    • i think you are the one that is ignorant. even assuming the findings of the commission of inquiry were correct, they do not allege any wrong doing on LAP Green, i.e. it was not involved in the valuation process. all the alleged wrongs were done by the Zambian government regardless of who was in office. you cannot use your own default to opt out of an agreement. the price is irrelevant, even with basic knowledge of contract law you will agree that consideration need not be adequate but valuable. Unfortunately for Zambia, the same law used to grab the shares makes it mandatory for compensation not at the price the property was acquired but at market value. i rest lap green’s case.

    • #4.2lawywer
      Niwe kalapasha chachine..thats how how corporate or is it business law operates.This govt will be bankrupt within one year.No investor will even wish to risk his money to buy JUNK bonds from unpredictable govt bound to be bankrupt.

    • @4.2 Lawyer, a fraudulent and hence illegal process cannot bestow good title no matter how law abiding the recipient is.

    • Spot on lawyer 1. Long est, fraud is a matter of fact that can not be proven by a biased commission. Secondly, the only way the Zambian govt can claim fraud is if they can show they did not have competence to detect it. The contract has an arbitration clause. The Zambian govt should have used it. Even if the contract is declared void, you still have to compensate them for the money they have invested. This one is a no brainer and common sense should have prevailed. Sebastian Zulu has never practiced commercial law.

  4. When you are a leader you should learn to listen. Our leaders never listen especially when they are holding the reigns of leadership. HOW MANY PEOPLE SPOKE AGAINST THE IDEA OF SELLING ZAMTEL BEFORE IT WAS DONE? The leaders never listened. African politians are always almost the same; they all fall by the same mistake that made the previous government fall. Today the PF is getting all the insults and the blunt for MMD’s mistakes. PREVENTION IS BETTER THAN CURE and this is too hard for African governments to understand. Not everything that PF is doing today is right BUT not everything that they are doing is wrong, the question is; ARE THEY LISTENING?    

  5. @ #6- I do not see anything that contradicts the law in what I wrote. You have no mandate to call me ignorant unless you can attach your CV to this site. The contract was based on assets that were improperly valued. There is clear evidence that the value attached to the company misrepresented the underlying fundamentals of the business. You must be ashamed to call yourself a professor when we all know that you probably haven’t attained such an accolade!

    • i think you are the one that is ignorant. even assuming the findings of the commission of inquiry were correct, they do not allege any wrong doing on LAP Green, i.e. it was not involved in the valuation process. all the alleged wrongs were done by the Zambian government regardless of who was in office. you cannot use your own default to opt out of an agreement. the price is irrelevant, even with basic knowledge of contract law you will agree that consideration need not be adequate but valuable. Unfortunately for Zambia, the same law used to grab the shares makes it mandatory for compensation not at the price the property was acquired but at market value. i rest lap green’s case.

    • Sorry Character Assassin 00, but your first sentence in this thread was that “Most Zambians are quite ignorant and backward” so it is clear that you also have no “mandate” to call other people ignorant without attaching your own CV to this site.

      And since it is impossible to attach a CV at LT, perhaps you could direct us to your page on LinkedIn so we may all study your qualifications and debate your skills accordingly? 

  6. @4, what made that contract illegal? Did Lap Green acquire it under duress, fraudulently, by committing a crime etc? Maybe Zambia was under-age and did not know what she was doing. The Govt had an upper hand in the contract, whether they knew it or not or pretended not to know it. It was never the fault of Lap Green that they were a shrewd business entity. Blame RB and gang and not them; they never got Zamtel at gun point. If Lap Green breached the conditions of the contract then it may be terminated.
    I have hope that it will end well because as a nation we cannot lose twice. 
    Those of you on Zamtel, how is the network doing?

    • Contract can be made illegalNull and Void)( on three basis.
      1. Abi initio ( Subject matter being illegal) in this case,was the sale of zamtel illegal ???
      2. Misrepresentation,Duress,Fraudulent activity.(Who was under duress here? . 3 and by Legal implication (certain laws that are drafted and makes the conduct of the activity illegal or is outlawed ( nationalisation,state of emergency e.t.c.).

    • Contract can be made illegalNull and Void)( on three basis.
      1. Abi initio ( Subject matter being illegal) in this case,was the sale of zamtel illegal ???
      2. Misrepresentation,Duress,Fraudulent activity.(Who was under duress here? . 3 and by Legal implication (certain laws that are drafted and makes the conduct of the activity illegal or is outlawed ( nationalisation,state of emergency e.t.c.).

  7. @CHARACTER ASSASSIN 00: Who declared the sale illegal? Who is the ‘armed robber’? Until the C.O.I. report is put through a judicial process no illegality has been established. This is what should have happened before the reversal and, only then would any illegality have been established and anyone found wanting reprimanded. No need for you to call everyone dull and only yourself the smart one or rocket scientist just because they hold a different view from yours.

  8. The Zambian government is not obligated to pay a ngwee. The two ways of nationalizstion. Expropriation that comes with compansation and confisication wiith no compesation. Zambia is a soverign state and as such can not be sued in another country.

    • Read Article 16 of the constitution. The state can never get anyone’s property without a law providing for such powers and where such a law exists it must always provide for compensation at the market value as does the Lands and acquisition Act which was used in this case. this least LAp Green will walk away with is the shares’ worthy at the price immediately before the acquisition. I would actually ask for more on the ground that the shares’ price was reduced by the so called investigations by govt

  9. LAP entered into an illegal transaction and such forfeits everything. No court should hear this case in Zambia and there is no international court to that can hear that case. It is washout.

  10. The manner in which the sell of Zamtel was declared ‘illegal’ leaves a lot to be desired. The president set up a COI to look into the ‘fraudulent sell of Zamtel’. Surely this was prejudicial to the process? The head of the commission was a cabinet minister – surely he was not going to go against the wishes of his boss? Lap Green and RP capital were not accorded the opportunity to present their cases during this process, which means that the whole process was not fair and even handed. COI are not courts and the fact that the president has unilaterally rejected the recommendations of the Chongwe headed commission to re-instate the Barotse Agreement clearly demonstrates that the findings of these commissions are not legally binding which means that the govt did not have to seize Zamtel.

  11. @ 6, 8 & 9. Stop being argumentative for nothing. Go and read the report from the transaprent and PUBLIC investigation. The sale transaction failed on many procedural and substantive grounds legally and therefore non binding/illegal. LAPGREEN ignored public sentimentwhen being given guarantees by RB.They ignored basic Foreign Investment Strategic Decision Making, Evaluation and assessment rules that demand that you critically analyse SLEPT environment. Soverign risk is the biggest threat to business seeking to invest in a foreign, sovereign country. S-Social(peoples consent and feeling), P-Political(change in policy as decided by people), L-Legal(existence of laws that would make govt appropriation possible e.g land act used by Malila). They’l get at most what they actually transferred

  12. @RE Thinker- I can see that you are a very logical and constructive blogger who does not rush to use profanity. LAP will have to paid back for its investments if it is found with no wrong doing, RP Capital will be liable for the improper valuation. It is not prudent to state at the time that LAP is or is not involved in wrong doing. Privatisation deals take a lot of paper work and a lot of back room dealing is involved.

  13. @Champ- 7.2- You prove my point exactly because unlike both myself and other people I have argued against, you are the only one who has gone into the verbatim of what I have said and not even discussed the issue at hand. Get back to work if you have a job, better still, get back to your books or breast milk. Adults only!

  14. @16. Good that you holding on and acknowledging debate from @ Thinker. I take it you are versed in contract law (offer, acceptance, consideration, terms, conditions, warranties, representation, mistake, capacity, illegality, etc). Zambia has a mountain to climb. LapG is dealing with same entity GRZ; whoever the manager is (last time RB and now MCS). GRZ entered into a contract with LapG. Was GRZ a minor or even insane at that time of contracting. And by the way, depending on the agreement a country can be sued in another state. For instance most IPPAs have UK, RSA, Botswana and others as countries of adjudication/litigation.

    • nice analysis. in fact all zambian privatisations sales are done based opn the england and wales laws so GRZ can be sued in London just like they sued FTJ in London. precendence has already been set by the same mutembo nchito

  15. On a serious note Rupiah’s immunity has to be lifted.He was adamant when he was president on questions about the corruption allegations on sell of ZamTel.Look how at the speed of light he sold Finance Bank.His son who was at the centre stage of all this is atlarge.Its a big shame for Rupiah to even boast that his son Henry is in RSA.Rupiah should not come back from Boston because really he didnt care about Zambia

  16. Its always better to debate and respect other peoples opinion, even if you do not agree with what comes from the other side of the river bank.

    The minute we start branding other Zambians as ‘backward’ then we loose the discourse.

  17. Iwe Dr Mutesa, don’t underrate the financial capacity of our government and its donors. Paying Lap Green is small change in relation to the 2012 budget.

  18. Most of people mifght not be knowing the fact that the now MD of Zamtel was part of COI which is sheer conflict of interest. Then If you follow the track record of PF it was premeditated that they willl reverse the deal. Tell me all of you are talking big things name of one person who is prosecuted over Zamtel and punished for doing a fraud. If there is no one how was it a fraud $257Million was money which came in the country and paid. Moreso if you know who was heading the COI Dimple an Indian paid by Airtel as airtel was fearing the success of Zamtel. Now they are relaxed

  19. i have to admit that the level of debate on this topic is encouraging and clear diversion from the insults that characterise most comments on a number of themes. However, my take on this that the ILLEGALITY being talked about will be determined by the COURTS OF LAW. iF THERE any illegality in the transaction, it was RP Capital and not Government or LAPGREEN. The government of the day was duly elected and had a constitutionla mandate to run the nation and make decisions. There is nothing illegal on a decision to sell an entity.

  20. #Chief..Nail on the head. What people forget is that the contracting parties are still GRZ and LAPGreen, not MMD and LapGreen. When signing this contract, GRZ had a team of lawyers, accountants and “experts”. They can not claim to have been disdvantaged. They shortlisted the bids and picked the successful bidder. If there was any fraud, it was GRZ not LapGreen. This fiasco will cost the Zambian taxpayers plenty of money because thats how international contracts work. MMD found itself paying millions for tractors KK bought in the 1970’s from Czekoslovakia. You just cant bail out of contracts like that. They will sue offshore and attach Zambia’s international assets. Cool heads and common sense should have prevailed. If they had any proof of fraud, they should have gone to court!

  21. Kaponya Govt need prayers ,such moves though they look illegal there is a smart way
    To do it, before it comes back to bite you, also grabbing Zamtel is not gonna help poor less privileged people ,that’s just bringing more of GRZ drama hiring only relatives,less
    Professionalism.

  22. Ba Maxine don’t condemn without giving a solution what was the best smartest way of doing it. Talk is cheap

  23. Is Mr. Mutesa a Doctor in what? it makes me question some people like Mutesa who cannot think first before airing his views on Lap green. The case is already in the court of law to decide and not you Mr. Mutesa. You are a Doctor. and yet you do not know that something like communication is a security matter which should not be entrusted in hands of foreigners.Every time I made a telphone call, there was some recordings at the exchange that were not in English as our official language but in a language I have never heard of. It is better to get back Zamtell no matter how you look at it Dr. mutesa. How i wish you had waited for the outcome from the court of law before showing your ignorance about issues that involves the security of the nation. Many on this blog are still in the sleeping mod

  24. Its just pathetic that the country (my COUNTRY ) IS being run by such incompetents the PF(Party ya ma Fontini).The basic law of contract is that the contract is concluded when the parties tu the contract agree tu the terms. Party of Fontinis(PF) thinks THIS CAN BE REVERSED JUST BY THE President word of mouth.It does not work like that.Zambia stands tu lose money. Even in Northern Province there a way tu du things i mean the proper way .UBUFONTINI Bwalaonaula ZAMBIA.

  25. Imwe na imwe ma intellectuals which court in zed will rule in favor of lapgreen in zed. Which judge do you think will go against Sata and Zed people. Lap green is just going through a mayor formality so they can go to world court if at all possible. But my fair guess is lapgreen is facked. And all u Zambians above scared of lapG grow a backbone n support GRZ on this one as it was the right thing to do. But PF should be removed from the board membership. 

  26. Or n u guys talking about world court (ICJ)etc. The key principle is that the ICJ has jurisdiction only on the basis of consent. So zed can simply say ICJ does not have jurisdiction the US done it before. The case does not even have the merits to get to the ICJ

    • @Pa Zed. This is not about ICJ. Its about the jurisdiction that was nominated for arbitration in the contract!! ICJ is a criminal justice court not commercial court.

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