FDD deputy national secretary and spokesperson Antonio Mwanza has revealed that Libya’s LapGreen has threatened to take the Zambian government to the International Court of Financial Arbitration for defaulting on the compensation following repossession of Zamtel shares.
And Mwanza says it is common knowledge that Zamtel in its current state is moribund and it is only surviving through government borrowings and guarantees.
Mwanza, in a statement, wondered why one would claim that Zambia’s economy was recovering when government was failing to meet its statutory financial obligations.
“It is common knowledge that Zamtel in its current state is moribund and it is only surviving through government borrowings and guarantees. The Zambian government has defaulted on its commitment to pay LapGreen in excess of US$382 million in compensation following a consent judgment order entered into between LapGreen and the government of the Republic of Zambia. This is in the case where the Zambian government was sued by LapGreen following the illegal takeover of LapGreen shares in Zamtel by the PF government in 2012,”
“Facts are that LapGreen bought 75 per cent shareholding in Zamtel amounting to a total of US$252 million and following the illegal take-over of Zamtel by the State, LapGreen sued the Zambian government in the Lusaka High Court. The State failed to defend itself and instead entered a consent settlement to compensate LapGreen its initial investment of US$252 million plus interest, calculated at eight per cent. Government was supposed to make an initial payment of US$114 million in November 2016 followed by biannual payments of US$35 million in February, 2017 and August, 2017 respectively but the government has defaulted and LapGreen is now threatening to take all measures possible to recover their money including taking the issue to the international financial institutions and seize Zambia’s assets abroad.”
He stated that the LapGreen issue raised serious questions with regard to Zambia’s capacity to repay the ballooning debt that the country found itself in and the claims by government that Zambia’s economy was recovering. Mwanza stated that the implications of the actions that LapGreen was about to take had far reaching consequences on Zambia’s standing on the global financial market, especially now that the country was negotiating to get a loan of $1.6 billion dollars from the IMF.
“…and the Eurobonds and other debts are approaching their maturity repayment dates coupled with the widening fiscal deficits the country is facing. Does Zambia have the capacity to service the ever-increasing public debt if it is failing to pay such financial obligations as compensation like the LapGreen one?” Mwanza asked.
“Can government explain to the Zambian people what the status of this matter is. What happened to the initial US$252 million that LapGreen paid the Zambian government? Can the Minister of Finance confirm that the LapGreen debt was added to Zambia’s total public debt, which he stated in Parliament? How much debt has Zamtel accrued from the time government took over its operations? And how much of this debt has been guaranteed by government? Can the minister in charge of Transport and Communication explain to the Zambian people how Zamtel is performing since the government’s take over? Can the Ministry of Finance and The Ministry of Justice explain to the Zambian people what is really going on here.”
He stated that Zambians needed to know the truth about the LapGreen saga because it was the taxpayers who would foot the bill.
“The question that needs serious answers is why did the PF government illegally grab Zamtel when it knows all well that it has no capacity to efficiently run the entity? What happened to the initial US$252 million that LapGreen injected in Zamtel because the company is limping and it is only surviving on government guarantees? And credit-rating agencies will no doubt warn against investing in the country,”