Lunte Member of Parliament, Hon. Mutotwe Kafwaya, has expressed grave concerns over the alleged collapse of the government’s debt restructuring deal, citing corruption and dishonesty as major contributors to the deal’s demise.

Hon. Kafwaya asserted that the debt restructuring deal, a key initiative pursued by the government, is now “as good as dead” due to what he claims is a lack of transparency and questionable practices in its execution.

Among the highlighted issues, Hon. Kafwaya pointed to the revelation that the government had purportedly agreed to pay $2.5 billion between 2024 and 2025 to bondholders. This decision, according to him, has reportedly angered the International Monetary Fund (IMF). He emphasized that committing to such a substantial amount contradicts the ongoing $1.3 billion program with the IMF and raises concerns about the financial feasibility of such an agreement.

Furthermore, Hon. Kafwaya criticized the government for agreeing to an 18% haircut instead of the 40% demanded from other creditors, deviating from the G20 Common Framework’s principle of equal debt treatment. He disclosed that the face value of the new bonds was increased to $3.135 billion in both scenarios, exceeding the original $3 billion face value of the old notes.

The Member of Parliament expressed his dismay, stating, “The agreement announced on 26th October 2023 with the External Bondholder Steering Committee is so absurd that it has shocked the IMF, Official Creditor Committee headed by China and France.”

In response to these concerns, Hon. Kafwaya urged the government to provide an explanation for the alleged scandalous clauses in the debt restructuring deal, which has reportedly been renounced. He emphasized the gravity of the situation, indicating that an announcement about the renouncement had been directed to the London Stock Exchange.

Hon. Kafwaya concluded by asserting that the reported carelessness in dealing with such matters is now costing the nation and could potentially lead Zambia back into a state of debt distress. He called for increased honesty in governance matters to avoid economic hardship and soaring living costs.

The government has not yet officially responded to these allegations, and the situation is likely to draw further scrutiny in the coming days.

Adolphus Mubanga, a Lusaka businessman and the country representative of CURZON Global Limited, has been convicted and sentenced to two years of imprisonment with hard labor for the possession of properties considered proceeds of crime. The judgment was delivered by Lusaka Principal Magistrate Irene Wishimanga.

Adolphus Mubanga had initially faced joint accusations alongside former Defence Minister Geoffrey Mwamba. However, they were later separated from the indictment, and Mubanga faced independent charges related to the possession of assets believed to be derived from criminal activities.

The charges against Mubanga specified that between June 1 and August 30, 2021, he was found in possession of four million and 50 thousand units of currency in a named bank, deemed to be proceeds of crime. Additionally, on August 30, 2015, he allegedly possessed K980 000 held at a specific bank, and on November 30, 2015, he held K525 954 in another bank, both amounts considered proceeds of crime.

Lusaka Principal Magistrate Irene Wishimanga handed down the verdict, sentencing Mr. Mubanga to a two-year prison term with hard labor after finding him guilty of the charges. The judgment marks a significant development in the legal proceedings surrounding the alleged possession of assets derived from criminal activities.

Mr. Mubanga’s association with CURZON Global Limited, a company where Geoffrey Mwamba reportedly expressed interest for business dealings in 2011 during his tenure as Defence Minister, adds an additional layer of complexity to the case.

It is noteworthy that Geoffrey Mwamba, the former Defence Minister, remains a separate entity in the legal proceedings, and the verdict pertains solely to Adolphus Mubanga’s charges.

London, November 28, 2023 — The High Court in London heard explosive allegations against former Barclays boss Bob Diamond, claiming that he fabricated a conflict of interest to obstruct Zambian businessman Dr. Rajan Mahtani from benefiting from the sale of Finance Bank Zambia (FBZ).

Dr. Mahtani, who founded FBZ in 1986 and agreed to a takeover by Diamond’s Atlas Mara company, accuses the latter of breaching the terms of the acquisition agreement, leading to a lawsuit seeking up to $100 million (£80m) in damages.

In his testimony on Tuesday, Dr. Mahtani refuted claims of a conflict of interest linked to the appointment of Faber Capital as a fundraising agent for the sale of FBZ and its subsidiaries. He alleged that the conflict was a pretext for delaying Faber’s appointment, hindering the raising of funds to achieve an ‘earn out’ target by the deadline of December 31, 2016.

The alleged conflict arose as Faber Capital was also mandated to work for Crane Bank, a Ugandan bank that Atlas Mara was considering for purchase. Dr. Mahtani dismissed the conflict as a ‘fiasco,’ stating that none of the involved parties, including Faber Capital and Crane, saw any problem.

During cross-examination, Atlas Mara’s representative, Anna Boase KC, cited correspondence indicating the company’s cooperation until the identification of the conflict on August 5, 2016. Boase argued that Atlas Mara resumed working with Faber once the conflict was resolved on September 27, as Faber dropped its Ugandan client.

Dr. Mahtani countered that none of the parties involved agreed on the existence of a conflict during that period. He claimed that the conflict issue soured relations between Atlas Mara and Faber, pointing to an internal email from Faber on September 24, expressing frustration with Atlas Mara’s reluctance to work with them.

Despite the email, Faber continued to work with FBZ, emailing Dr. Mahtani on October 9, outlining conditions for becoming the official fundraising agent. Dr. Mahtani blamed Atlas Mara for preventing the funds from being raised, emphasizing that it was the company’s lack of cooperation.

The ongoing trial raises serious allegations against Bob Diamond, whose past controversies include a forced exit from Barclays in a 2012 interbank rate-fixing scandal. Barclays was fined a record £290 million for manipulating rates determining mortgage payments.

The trial continues, promising further revelations and insights into the intricate web surrounding the FBZ takeover.

Source: Nick Forbes
Central News, Press Room, Central Criminal Court