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Friday, October 1, 2021

How Bally can fix it: Give back Zamtel and KCM to the rightful owners

Columns How Bally can fix it: Give back Zamtel and KCM to the...

By Michael Chishala

I have heard some very impressive speeches by our new President Mr Hakainde Hichilema on many different topics. This is a rare time I feel very proud as a Zambian that we kicked out the corrupt PF Kakistocracy with a very large boot! The President has strongly stressed that rule of law shall be followed strictly and it shall in fact be strengthened.

The sad story of Zamtel and Konkola Copper Mines (KCM), originally owned by LAP GreenN and Vedanta respectively, is a classic case in how to chase away investors whilst gaining notoriety abroad as a nation of men and not laws. What has been most disappointing is not only that these two companies were grabbed from their rightful owners through a highly questionable, if not corrupt procedure, but that too many Zambians were clapping their hands whilst this was happening!

I find it most ironic that on one hand we supported this lawlessness, but on the other criticised the former PF government for breaking the law in other areas such as caderism, corruption, theft, arbitrary arrests, abuse of state resources or misusing the Police to settle political scores. We justified the seizures of Zamtel and KCM by saying that foreign “infestors” are just rich greedy capitalists who pollute with impunity, hide profits through transfer pricing and do not follow labour laws. But as the old adage goes, two wrongs do not make a right.

The fact that Vedanta as owners of KCM does wrong or unethical things, or breaks the law is not a justifiable reason to equally break the law when dealing with them. That’s vigilante justice, the same as beating up a thief and killing him before he can be arrested, charged and locked up.

The sham KCM liquidation process overseen by Mr Milingo Lungu was a total disgrace. Us Zambians supporting it was even more disgraceful. Today we are up in arms at the slightest sign of the new UPND government bending or breaking the law (eg appointing Ministers to non-existent Ministries), but we were fine with the criminality of chasing away Vedanta and seizing their asset that they paid for and developed, regardless of the arguments about what the true value of KCM was at the time it was bought.

If KCM is polluting the environment, why don’t they get fined by the government through the Zambia Environmental Management Authority (ZEMA)? If they are hiding profits through transfer pricing, why doesn’t the Zambia Revenue Authority (ZRA) punish them? If ZRA lacks capacity to detect sophisticated transfer pricing, why doesn’t ZRA either get some experts from abroad seconded to teach them how, or send their people abroad to take a course in nullifying transfer pricing mechanisms?

If KCM has failed to pay suppliers on time and messed up the Copperbelt economy, why on earth aren’t all those suppliers owed millions of Dollars not taking them to court and using bailiffs to grab KCM assets? It is an open secret that the KCM board has always had government representatives from the day Vedanta bought the mine. So does this mean they have been sleeping for 17 years? So why were they appointed if they were that incompetent? Does this mean that the alleged sins of Vedanta have never been discussed in all the dozens of board meetings since 2004?

If Vedanta have not honoured their obligations to invest in Zambia substantially, the solution is to just engage them, give them an ultimatum and deal with them accordingly. The sale agreement was very explicit that any disputes were to be settled by international arbitration, not through nonsensical fake liquidations pushed through a Zambian judiciary where brown envelopes seem to rule.

How is bypassing the law and illegally grabbing KCM from Vedanta a solution to anything? How do we expect to attract better buyers for KCM when all the best companies will not touch KCM with a 3 meter pole? A few weeks ago, the bank accounts of Mr Lungu the liquidator were frozen as reported by News Diggers. I shall not in the least be surprised if serious corruption and wrong doing are uncovered. There is more than a 70% chance that KCM was just being used as a cash cow by the corrupt evil PF regime.

FILE: Finance Minister Situmbeko Musokotwane and LAP Green Managing Director Abdulbaset Elazzabi congratulate each other after a successful hand over of 75 per cent share of Zamtel to LAP Green in Lusaka

The story of Zamtel mirrors that of KCM. When President Michael Sata took office, he wasted no time in setting up a kangaroo Commission of Enquiry to prove the sale of Zamtel to LAP GreenN was somehow improper. Its outcome was already pre-set and the Commission just went through the motions like a puppet on an invisible string. The final report was a total joke and was used to paralyse and seize the company in one of the first major illegalities of the corrupt PF regime. I always laugh when people claim that corruption in PF started when Mr Sata died.

LAP GreenN had turned Zamtel around within just one year. From a weak bankrupt company with millions in debt and a bloated workforce, Zamtel was transformed into a profitable fast growing company that quadrupled its subscribers and nearly doubled in value, yet with a third of the original labour force!

The corrupt PF cabal took over the company by force and hounded out the CEO Hans Paulsen at the barrel of a gun and deported the CFO Hayee Adnan. How do you think that looked like on the world stage to anyone with billions who was looking for a country to invest in, especially after a credit rating downgrade soon after? PF then run Zamtel into the ground within three years, as reported by the Auditor General.

Today we owe LAP GreenN close to half a billion Dollars as compensation which we do not have. We were slapped with a $380 million judgment in 2017 and interest has been accumulating since then with not even a single payment made as far as we are aware. Zamtel is a shell of its former self under LAP GreenN, with some of the best employees having left. Many Zambians defended and supported this criminality by PF, yet they began crying like little babies when the same criminality was extended to them and manifested through wanton corruption, lawlessness and brutality.

So what is the solution? Very simply, give back the two companies to their original owners. Call them for a round table meeting and sign an agreement that all claims for compensation should be waived in exchange for LAP GreenN and Vedanta being given back their companies. A short 3 year tax break can be thrown in to sweeten the deal and allow for recovery, with a very strong stick shown that no nonsense like failure to pay suppliers on time, pollution, or creative accounting shall be tolerated.

This shall bring back investor confidence and increased FDI. We cannot afford the luxury of the lawlessness and foolishness that characterised the incompetent and inept PF regime for ten years. We need all hands on deck to fix the economy. We need Vedanta to be part of the team of Bally so that with all our collective efforts, he can fix Zambia.

REFERENCES:

  1. London High Court orders Zambia to pay $380 million in compensation for nationalizing Zamtel
    https://www.libyaobserver.ly/economy/london-high-court-orders-zambia-pay-380-million-compensation-nationalizing-zamtel
  2. Libya in $380m dispute with Zambia over Zamtel takeover
    https://www.lusakatimes.com/2020/10/14/libya-in-380m-dispute-with-zambia-over-zamtel-takeover/
  3. LAP Green disappointed with PF Government behaviour
    https://www.lusakatimes.com/2012/08/29/lap-green-disappointed-government-behaviour/
  4. High Court allows LAP Green to take case to neutral country, Government to appeal decision
    https://www.lusakatimes.com/2013/03/30/high-court-allows-lap-green-to-take-case-to-neutral-country-government-to-appeal-decision/
  5. FIC seizes Milingo’s accounts, as Chirwa wonders why people are panicking and moving cash out of the country
    https://diggers.news/local/2021/08/30/fic-seizes-milingos-accounts-as-chirwa-wonders-why-people-are-panicking-and-moving-cash-out-of-the-country/
  6. In blow to Vedanta, Zambian court rules KCM liquidator to stay in post
    https://www.reuters.com/article/us-zambia-mining-vedanta-idUSKBN29B26F
  7. Zamtel in huge losses, firm is technically insolvent-Auditor General
    https://www.lusakatimes.com/2015/02/13/zamtel-huge-losses-firm-technically-insolvent-auditor-general/

Michael Chishala is a Zambian analyst with interests in Philosophy, Law, Politics and Economics. [email protected]

53 COMMENTS

  1. People never ceases to amaze… give KCM to Vedanta? The problem is that when one is not affected, they don’t feel what those who are affected feel. Maybe call back Anglo the real owner of the company, it will make sense. Not the nsamya again, please.

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  2. Boss we have tried privatisation and we have not benefited anything. Mopani never made any profit until when it went to the incompetent PF it made a profit. Yama you suffer from inferiority complex and you think we can’t do it. All we need are competent professionals willing to lift Zambians out of poverty. Botswana is were they are today because they have a huge stake in companies. Under Glencoe Mopani never made a profit. So if you want Bally to be a one term president then continue preaching kaak.

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  3. You can not paint the 2 cases with the same brush………

    In the LAP green case , that was pure banditry and opportunism by sata when seeing Libya disintegrating ………

    On the vendetta case , zambia has pretty solid grievances against them , even the mining world remains mute on this case….

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  4. This Michael garbage of a person really surprises me. No wonder our presidents in Zambia are amongst the ill informed presidents on earth of course not forgetting poor Joe in US.
    It is the selfish individuals like this Mr Garbage that has contributed to our continents stagnation.

    Chimoneni Amano ububi. Noluse tachakwata. Get your father’s farm and give vandata to do their cultivation from there.

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  5. No sense .let zambians run their own affairs..let lap green come and establish their own . Zamtel belongs to zambians. Airtel belongs to Indians, MTN belongs to south africans. All the money this guys make go to their countries to develop them. As remain with used scratch card. Work up zambians..PF was in the right track on this one

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  6. Who are the original owners bwana ? Are you mad ! Zambians are the original owners and not the Libyans and the Indians. A town in Switzerland ( headquarters) of Glencore refused to give money which rightfully belonged to Zambian but preferred to keep it. And you are here campaigning for the parasites. Shame on you!

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  7. We did not support the PF takeover of KCM! A good section of Zambians which I belong to has always and consistently condemned the takeover of KCM. That action lacks legitimacy and direction. Even the qualification and credentials of the liquidator are questionable.

    Unfortunately there is lunacy doing rounds in Zambia now. People are emboldened to think you can just takeover a company just like that and is all right. I am certain that Vedanta can not accept KCM in the state it is in. Both the liquidator and Senior management have raped the company. The best route is to allow the arbitration process to proceed , remove liquidator, and KCM management should be removed. An administrator should be appointed while the arbitration is in process..technically competent team that is. Remove…

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  8. Your bally is a stooge for the Western imperialists. When he went to America, the Americans asked him to jump, and he asked how high. Don’t worry soon the whltes will reclaim what they stole from us all because of muzungu anikonde hh

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  9. Americans and other Westerners in Zambia use a lot of zamtel…give it to the Libyans? No that’s our item, just fix it if it’s broke.

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  10. Who is sponsoring this maron? Is this what we voted UPND? Wait for 2026 bwana you will go down with your pride. Of HH will fix this situation by reinstating these foreign companies, then Africa and Zambia in particular is cursed indeed.

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  11. Maybe Mr Chisala doesn’t know that KCM under Vedanta owed local suppliers billions for services rendered. It’s one of the reasons that caused the so-called liquidation. Up to now many of these suppliers have not been paid their money. First thing Vedanta did after Upnd won the last election was to promise paying all debts owed and pump in millions of dollars in the mine. Things they failed to do previously.

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  12. The other thing Mr Chisala must know is that Vedanta never invested anything in the mine but instead inherited what Anglo had generated eg copper ready for sale, blasted ore in stokepile ready for treatment, drilled ore ready for blasting, confirmed ore reserves ready for drilling. These combined were in millions of tonnes. After exhausting all this -problems started since they never bought machinery to replace them as they consumed. So how can you trust them again if in the past they failed to perform and yet they only paid US$24m and in installments.

  13. Now, like others have already stated, if you want HH to be a one term President, keep up with this n0ns3nse about KCM and Lap green. There are certain things you let the courts handle even if the cases were initiated by the previous govt. KCM was milking Zambia to the extent that the CEO (that Indian dude) was not even shy or afraid to boast about it. Those Indians never bothered to reinvest even a penny back into KCM, they always declared losses meanwhile bragging about the millions KCM was giving them. And these are the people you want to give KCM back to? What is wrong with some of you Zambians?!

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  14. Joe, Zamtel and KCM were originally created by white people before independence and were forcefully nationalised. so who are the original owners? This is how useless we are in Africa. We produce nothing.

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  15. Yambayamba and Deja Vu, Vedanta has invested 3 billion dollars into the KCM. The information is available online. Lapgreen also invested in Zamtel. Get your facts straight instead of lying.

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  16. #15 Investment in what? So how come they couldn’t maintain equipment let alone buy new ones. How come they failed to pay creditors? It’s on the website? Reminds me of Jimi Hendrix’s DO NOT BELIEVE EVERYTHING YOU READ.

  17. Sometimes I wonder what motivates some people to write on some topics. Bally must know that not all decisions that ECL and PF made were wrong. He needs to be reasonable in the manner he approaches issues. MCS made similar mistakes, so we might begin to go round in circles. When RB seized FBZ no one talked about the Deloitte Audit Report. ABC & MCS out of contempt for RB gave it back but what did we see? They regretted shortly thereafter. The issue of LAP Green and Vedanta will haunt Bally if he wants to handle it with surgical gloves. What with the wholesale dismissal of people? Nipano tuli

  18. I must say that this is one of the most useless articles that I have read on LT. People who are pushing this line don’t want HH to succeed. If you want to annoy miners on the copperbelt, keep pushing this nonsense.
    And you know what this means for 2026.

  19. I don’t think Michael has a functioning brain. Let the Zambians with brains do their jobs. As of you, you deserve to be enslaved like in the 1700’s in the US because that’s where your mind belongs and believes it’s the right place. No. 13 you belong there as well.

  20. #15 Fook I don’t know anything about LAP Green other than that my friends lost jobs when zamtel was sold. But on KCM I can talk website or no website facts are there. Vedanta came to reap without replanting. You know what they will do if allowed back? Since they can’t mine they simply start selling part by part of the plants like Binani did with Luanshya.

  21. Don’t you dare! The shallow thinking of some Zambians. You think you can only be employed by foreigners because you think they are the only ones that can manage to run companies. How will you learn if all you do is give them to others to run. Such thinking is a colonized mindset which makes my blood boil. The Bible says in proverbs that even a foolish man is thought to be clever when he keeps his mouth shut. So please keep such thoughts to yourselves

  22. Deja Vu #15, please google how much cooper has been produced by Vedanta since they came to Zambia. Then ask yourself if it could have been produced without any tangible imvestment in kcm apart from that was already there when they bough it.

  23. Clearly the author of this article has zero knowledge of what KCM was when they took over and what it became under Vedanta management. Are you really a Zambian????You have no idea.

  24. Reading comments here makes me very alarmed and sad…

    For sure KCM owed some suppliers under Vedanta management…but PF’s KCM owes more suppliers and even expropriated assets of CEC and still owe them money, does not pay PAYE and possibly any other statutory dues.

    So which is which people!

    Glen core has declared profits before! From 2016 – 2017 (years could be wrong) they were heavily investing in expansion both in Kitwe and Mufulira. It would be shear magic to invest USD 3 billion and make profit within that year. That USD 50million profit clearly shows that there are ongoing capital projects at Mopani. All what Glencore was doing is at standstill.

    It does not show that company is moving in the right direction!

  25. Chishala, you are lopsided in your comment. To be balanced you should have spoken to Mine Workers Unions they would have given you some insights. To say the least Vedanta are not sincere in their dealings. Zambia would have been better under other Investors. Lap Green how do you get investors from a disintegrating country Umulungwana????

  26. $32 Mercury mining is not like sweeping the street with worn out brooms. In mining you need efficient machinery for to keep your production levels. Vedanta never replaced these machines and neither did they successfully mine the Konkola Deep as per purchase agreement. From reports Vedanta didn’t pay the $24m which was supposed to be paid over a period of four years. As for the debts it’s common sense that it was not going to be easy for the liquidator to pay the creditors while the case was still making rounds in various courts.

  27. My brother Zambia does not have any hope of winning this case in an international court.We will end up with a judgement against us I can bet you.If we’ve failed to pay for the Lapgreen case how will we manage the KCM?
    The method used grab KCM wasn’t in the agreement.There was a clause they could have used but they were in a hurry to populist demands and we’re in trouble.

  28. At first i thought my tribal cousins have got brains to think but i was cheated. This Chishala boy, has a mental problem. He thinks a foreigners will develop this nation for him. You are even writing essays without any shame. It is high time your brain was overhauled and used to the best of others. You are a sheer waste of space to think that Zambia will be driven by foreigners. You need to grow up or else your brain has no use.

  29. Mbaluso.
    The article by Chishala is not a tribal issue but a ruling party issue to say it is tribal is nonsensical Mr Mbaluso.
    This guy Chishala has written this article under the influence of the ruling party belief, that it is only the western investor who can run the mines , we saw it coming when the now head of state said Zambians cannot run mines, this manifestation is what HH had in mind,. Mr Mbaluso you could be one of the dull guys around who couldn’t think beyond their nose, reason being that you are localising something that is international , you are bringing it to your village way of thinking that it is between you and your mbuya to the contrary my friend this issue is beyond your capacity of thinking , this article concerns the international community…

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  30. Tarino Orange @29

    ++ I like your sense of humour. Indeed he would be buried in the deserts of Libya. Right now Libya is very dysfunctional.

    LAP ( Libya African Portfolio ) Green is more interested in getting their money and the compensations than continue running the company in Zambia. They relocated to Dubai after the fall of Gadaffi. The company incorporated by the blessings of Gadaffi.

    Their investments and stashes in Zambia, Chad, Niger, Rwanda and Togo were all seized following the imposition of UN Sanctions in 2011, putting a colossal hollow in its operational trajectory. The author of this article is looking at things from a single dimension.

  31. I am so disappointed by the so called learned author of this article. If education means to have this mentality to produce western dependant minds then to hell with education and primitive for life.
    I am q sincere believer that education does not produce such authors but people choose wrong.
    As Zambians let strive to the best ability to run our affairs.
    We need alot of guys with mentality like kopala. If you really want bally to succeed in all his promises let’s strongly encourage him not to entertain Indians and mopani not lap green. He is a disciplinarian guy hence induce this in the running of state institutions and success shall be everywhere.

    So forget about investors who will later in insult us.
    I listened to alot of speeches by African leaders at UN, and most if not…

  32. We are now in trouble as Zambians from what we are witnessing , only a few days ago our head of state while in America he told the Americans that he will re-brand Zambian values to that of the American values really strange, how can this guy start saying such stupid thoughts Zambians cannot be Americans what values do Americans have to talk about ,
    It is from America where were most of these strange and evil activities are created, or did he just lose his mind because he was in America for three days and felt everything in America must be Zambian this President is a joke.
    Being in America for three days or three years doesn’t mean that you know America or the western world you should be asking .

  33. Chipuba ici with this article.Inferiority complex yaba UPND chaps.Opps this country will be in hands of foreigners.Atase bane.Let Zambians get the mines.If HH wants to lose in 2026 in copperbelt let him give KCM to vandeta and Zamtelto Lapgreen.He may even lose 2026.

  34. To fix it, get rid of all the PF chaps from key positions. These saboteurs will frustrate your rebuilding efforts. There is serious contamination in these institutions, There reverence is still with the thieving PF. Very soon your Ministers will smell and taste the goodness of money and boom, they will start cutting deals under the table, Before long we will be back to square one. Act now while they are still dazed,

  35. I have said it before and I will say it again. Let’s restructure the institution of the Presidency. Mwanawasa was shepherded into making the mistake of handing over KCM to vendata and so was RB shepherded into the Lap Green deal by those close to the Presidency . The two Presidents were deliberately misguided. This problem will continue until the Presidency is shielded from businessmen and facilitators who should ordinarily be doing govt work within the institution of the Presidency but end up as conduits for all sorts of illicit deals. I won’t mention names, but examples are abound both from MMD & PF. UPND please learn from the mistakes of others.

  36. Ba Chishala imwe muli bapuba. I spoken as a former ZCCM employee. You are the worst and dullest Zambian hypocrite I have come across. We tried to warn King Fred about selling the mines. And nigger you want to go back the same route? Really?

  37. DO NOT INSULT MICHAEL CHISHALA JUST BECAUSE HE HAS NO CONFIDENCE IN HIMSELF NOR IN BLACK PEOPLE. JUST GIVE HIM GOOD ADVISE SO THAT THE NEXT TIME HE SHOULD THINK BEFORE HE WRITES NONSENSE. WE ARE CAPABLE OF RUNNING ANYTHING ON THE FACE OF THIS WORLD BECAUSE THE SAME BRAIN THE WHITES OR INDIANS HE WORSHIPS HAVE IS THE SAME BRAIN THAT WE HAVE. MY HUMBLE ADVISE TO HIM IS THIS’ MR CHISHALA, WHEN YOU GET HOME TODAY, GIVE YOUR WIFE TO YOUR NEIGHBOR, LET HIM MINE HER SINCE YOU HAVE NO CONFIDENCE IN YOUR DRILLING MACHINE” Stop the nonsense of always thinking we the Zambians are dull. WE KNOW YOU HAVE BEEN SENT TO WRITE THIS AND UNDERRATE THE INTELLIGIENCE OF ZAMBIANS.
    AND SOME FOOL @ 17 HAS WRITTEN THIS ‘ Vaat Daar Fook
    Joe, Zamtel and KCM were originally created by white people before…

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