Zambia: Allegations fly over the appointment of sale adviser for ZAMTEL privatisation

Mergers, Acquisitions and Financial Results

Zambian President Rupiah Banda on Monday defended government over allegations there was some improper handling of the partial sale of ZAMTEL, the state owned telecommunications giant.

Banda told journalists at Lusaka International Airport on Monday just before departure for Tanzania on an official visit that the public needs to give the minister of transport and communications a chance to explain her side of the story.

The minister in question, Dora Siliya, has been heavily criticised for apparently ignoring legal advice from the office of the Attorney General on the procedure of selling the company. ZAMTEL has faced numerous financial problems, prompting government to begin a process to find an equity partner to help manage the commercially viable company.

However, the decision by the minister to engage a private company from the Cayman Islands to carry out an evaluation of ZAMTEL’s assets before finding it an equity partner at a cost of US$2 million has raised concern.

The private firm was selected without following normal government procedure and Siliya went ahead to sign an agreement with the evaluation company against the advice of the Attorney General.

There have been allegations that have so far not been denied by government that one of Banda’s sons is involved in brokering the deal between government and the Cayman Islands based firm. But Banda said he was not involved in any of his son’s business dealings, and urged the public to allow the minister to make a statement on the matter before condemning her.