RP Capital’s MoU to evaluate Zamtel’s assets comes under scrutiny of Tribunal


Zambia’s Minister of Communications and Transport, Dora Siliya got herself into hot water last week over the MoU she signed with RP Capital Partners to value Zamtel’s assets for partial privatisation. Whether or not the MoU has been annulled, RP Capital Partners will still be eligible for five per cent of the proceeds.

Siliya said her ministry signed a memorandum of understanding (MoU) with RP Capital Partners Caymans Islands Limited with full blessings of Solicitor General, Dominic Sichinga.

And Siliya has also testified that former First Lady, Maureen Mwanawasa sent then State House chief analyst for press, David Kombe to influence ministry officials in considering awarding an e-Governance tender to the Chinese vendor ZTE.

Attorney General, Mumba Malila has testified that the Zambia Development Agency (ZDA) complained that his chambers did not properly handle the memorandum of understanding (MoU) on the evaluation of Zamtel assets.

Malila also said that Solicitor General, Dominic Sichinga never informed him that Communications and Transport Minister, Dora Siliya complained that the legal opinion missed the point on the MoU. He said the ZDA board felt that their obligations could not be met because their functions were not mentioned in the document.

"ZDA concerns were that it had complained that their obligation could not be done as they were not mentioned in the MoU, so they concluded that the attorney general's chambers did not perform a good advice," he said. He said his representative at the ZDA board, Patricia Jere told him that the board had concerns with the MoU and they felt that he should have personally handled it.

He also said he declared the MoU between the Government and RP Capital Partners on the evaluation of Zamtel assets a nullity after it was signed. Malila told the tribunal probing the conduct of Ms Siliya that he wrote his letter advising that the MoU was a nullity on January 5, 2009 when the document was signed on December 22, 2008.

The minister is alleged to have unilaterally cancelled a duly awarded contract by the Zambia National Tender Board (ZNTB) for the supply, installation and commissioning of Air Traffic Management Surveillance Radar Systems at Lusaka and Livingstone airports.

She is also alleged to have awarded RP Capital Partners a US$2 million contract to value Zamtel assets disregarding legal advice from the attorney general, and in the last allegation, she is said to have abused constituency development funds (CDF) in Petauke.

Malila said he was also not aware that another MoU was signed on January 9, 2009 and his advice referred to the first opinion offered by the solicitor general on November 21, 2008. He said the MoU signed on January 9, 2009 was not taken to his chambers for approval and it was brought to his attention by Ms Jere who was his representative on the ZDA board.

The attorney general, who was speaking at the closure of the tribunal, said what was ultimately signed was a document that did not comply with the advice from his chambers.

He said his advice was copied to Cabinet office and to the president's special assistant for legal and others in the interest of the country because he was aware that the president wanted the Zamtel issue to be resolved in a fair and quick manner.

Malila, who expressed shock that RP Capital and Partners had already started evaluating the Zamtel assets even after declaring the MoU null and void, observed that Ms Siliya ignored his advice.

He explained that on November 12, 2008,acting Communications and Transport Permanent Secretary, Victor Imbwae wrote to his office requesting for legal advice but that he delegated the issue to Sichinga, because he was leaving the country.

He said on November 21, 2008, acting Principal Counsel, Inonge Kwendamwene in the solicitor general's chambers wrote a letter to the ministry in which she rendered the required legal opinion.

He said on November 25, 2008, Sichinga wrote another letter to Ms Siliya suggesting that the MoU should be clearer to safeguard the interest of the public. He said when he returned to Zambia, he was given the file for the MoU and saw a letter that indicated that Sichinga had meetings with Ms Siliya over the MoU and that he would not be averse to the signing of the MoU if advice was followed.

He said he first saw an MoU on which the ZDA did not sign, which was in line with reports he received that the ZDA board was against the MoU because it was supposed to be a signatory. Malila added that it was not usual for his office to review any opinions endorsed by the solicitor general but in the case of the MoU his review was prompted by complaints from ZDA.

He said when he reviewed the MoU, he discovered that the legal opinion given on November 21, 2008 by Ms Kwendamwene and that of Mr Sichinga on November 25 was also largely not taken into account. "It is important to heed to the legal advice from the attorney general's office because ignoring such is as good as not seeking it in the first place and failure to seek such advice is contrary to article 54 of the Constitution," he said.

Malila told the tribunal that in an event that there was no evaluation and sale of Zamtel assets, the Government would be in breach of the financial obligations as the MoU was binding. Being led by the petitioners' lawyer, Bonaventure Mutale, Malila said if the Government decided to sell Zamtel to another company, it would still have to pay RP Capital Partners five per cent of the proceeds.

He said some paragraphs in the MoU implied that it would be governed by Zambian laws and RP Capital Partners would not be interested in Government's internal procedures but that the MoU was binding. When led by Ms Siliya's lawyer, Eric Sliwamba, Malila said he saw documents related to the MoU between December 25 and December 30, 2008 and that Sichinga briefed him on the two meetings he had with Ms Siliya.

He said Sichinga told him that he had made suggestions to the MoU some of which had been taken on board and he never mentioned that Ms Siliya had said that the attorney general's chambers had missed the point in the advice. He said Sichinga never told him that he had to re-look at his earlier opinion of November 21, 2008, adding that the letter the solicitor general wrote was unclear to him.

He also said he was not informed that the legal opinion missed the point because it talked about the sale of Zamtel when the issue was about evaluation of assets. He said if he was told that the MoU was about evaluation of shares and not the sale of Zamtel, he could have changed it.

He said in his letter, he addressed himself to the sale of Zamtel and raised other issues that his subordinates did not raise but it was after the MoU of December 22 was signed. The tribunal closed last week and lawyers from both parties were given up to this afternoon to tender their written submissions to enable it read through and prepare its findings.

Times of Zambia