Monday 23rd April, Lusaka
LAP GreenN, the Libyan Investment Authority’s international telecommunications arm and a major foreign investor in Zambia, is disturbed by the decision last week in the Zambian High Court to not grant interim protection for its seized assets, which were legitimately purchased at a cost of US$257m and which now have a market-value of approximately US$480m.
LAP GreenN has decided for valid reasons not to appeal this decision, but to address the issue in its case against the government, which is scheduled in the Zambian High Court on July 9th 2012.
Mr Wafik Al-Shater, Chairman and CEO of LAP GreenN said: “We are surprised and disappointed at the press reports in Zambia which have wrongly indicated that our ‘claim’ has been rejected, as this was a preliminary precaution in which we sought the court’s support and cooperation to protect our property until the case is heard on July 9th.
“Our case will underline how unacceptable and disturbing we feel it is on many levels, that one of the largest investors in this country can be physically removed from its own company, and have its assets summarily taken away with no market-value compensation being offered as is required by law. We are aware that the international investment community and ratings agencies will be watching the outcome of this case very closely, and some, such as Fitch who last month downgraded Zambia’s credit-rating from ‘stable’ to ‘negative’ as a direct result of this case, have already made their views clear.
“It is for these reasons, and so as to expedite the justice which we sincerely hope and expect will not only deliver redress to us, but which we also hope will restore faith to other foreign companies or institutions who are thinking of investing in Zambia, that we are not appealing the recent ‘freeze’ over our shares.
“These assets which we insist are returned, form part of an international investment fund which is wholly owned by, and acts on behalf of, the people of Libya, and as such we will be pursuing this matter until we receive the return of, or market-value compensation for these assets, be that in the Zambian courts or in the international courts or other bodies which our legal teams have investigated as being alternative options for redress and full compensation.”
LAP GreenN is currently challenging the legality of the Zambian Government’s seizure of LAP GreenN’s shares in Zamtel. LAP GreenN filed a constitutional petition to this effect last month.
The Zambian High Court will hear LAP Green’s petition for restitution on 9 July 2012. In this petition LAP GreenN requests that its 75% shareholding in Zamtel is returned to it. If the shares are not returned, LAP GreenN will seek compensation in the amount of US$480m, the market value of the shares at the time the Zambian Government seized them.
· South Africa: Stephen Laufer, email@example.com, +27 83 444 2739
· International / Zambia: Robert Watkinson, firstname.lastname@example.org, +44 7984 433 486
Notes to editors:
About LAP GreenN LAP-GreenN is the $8bn telecommunications investment arm of Libyan African Investment Portfolio (LAP), focusing on the telecommunications sector in emerging markets. It operates mobile and ISP businesses in Uganda, Zambia, Ivory Coast and South Sudan. LAP GreenN is actively seeking to increase its footprint across Africa and the Middle East.
LAP GreenN in Zambia
In June 2010 LAP GreenN acquired a 75% stake in Zamtel, the former state-owned Zambian telecommunications company, for US$257 million. The Government of Zambia retained a 25% stake in the company. LAP GreenN’s acquisition followed an open, transparent and competitive bidding process that attracted bids from eight international investors.
LAP GreenN’s participation in the bidding process was overseen by the Zambian Development Agency and was conducted with strict adherence to the established legal framework in Zambia. It was overseen by an international team of lawyers, and was approved in cabinet and all the requisite government agencies.
In early 2012, the new Zambian Government announced a reversal of the sale, removed LAP GreenN from management of Zamtel, and seized control of the 75% equity paid-for and owned by LAP GreenN.
Prior to LAP Green’s purchase and management control, Zamtel was effectively bankrupt. In just 18 months until the point of seizure, LAP GreenN effected a world-class transformation in terms of its customer, financial and operational performance:
· Zamtel’s customer base had increased by 600% to approximately one million at the start of 2012
· Zamtel’s revenues had increased by 50% over the same period
· Zamtel had doubled the amount of Base Station Transmitters across Zambia, many of which now support 3G high-speed data, and thus has significantly improved access to voice and data communications for the people of Zambia
· Zamtel had instituted state of the art customer care systems to better service customers and to retain existing customers through better fault-repair service
· Zamtel had expanded the network of retail shops to give better service to customers across Zambia
· Zamtel had established cutting-edge broadband internet data facilities for its fixed-line customers thereby putting it ahead of competition increasing its subscriber base by 3000%
· Zamtel was transformed into a healthy, efficient and solvent company, more able to effectively compete in the Zambian telecommunications market.
The net beneficiaries were Zambian customers, who benefitted from vastly superior network performance and customer service.
During this period LAP GreenN also initiated a ZMK2.5bn programme in conjunction with World Vision to deliver clean water to communities through bore-holes.
The value of Zamtel at the time of seizure is estimated to be US$480m, reflecting the significant investments and improvements made by LAP GreenN since it purchased Zamtel in June 2010. In addition, LAP GreenN is claiming for the substantial losses it has suffered as a result of the seizure of the shares.
LAP GreenN’s legal action in Zambia
The constitutional petition issued by LAP GreenN on Monday 19 March, has a date for hearing set for 9th July 2012, where it:
(i) Challenges the constitutionality of the compulsory acquisition of LAP Green’s shares for reasons including that it was not carried out for public purpose as contemplated by the Zambian Constitution
(ii) Challenges the legality of the compulsory acquisition under the Lands Acquisition Act mainly on the basis that it was not carried out for public purpose under section 11(1) of the Lands Acquisition Act, that such an action is improper, unreasonable and in breach of the rules of natural justice. As a result of these challenges LAP GreenN requests that the shares are returned to it
(iii) Will in the alternative, prosecute for full market-value compensation for the shares that have so been compulsorily acquired in accordance with section 11(2) of the Lands Acquisition Act, together with appropriate and proper damages