Tripoli, 16 April 2012:
The Zambian High Court has agreed to hear Libya’s appeal against a lower court’s refusal to freeze the . . .[restrict]majority stake in telephone company Zamtel, seized by the Zambian government over corruption allegations. Libya wants the seizure declared illegal and overturned or that the Zambians pay proper compensation for the nationalisation.
LAP GreenN, the Libyan Investment Authority’s (LIA) telecommunications arm, said it was disappointed that the High Court had not agreed to freeze Libya’s 75 percent Zamtel stake immediately, deciding instead to hear LIA’s petition on 9 July.
A LAP GreenN spokesman described the decision as “troubling” adding: “Basic safeguards and reassurances to protect our shareholdings should be in place until this case is resolved. Our preference is of course that Zamtel and our equity in it is returned to us, so that LAP GreenN can resume making its important contribution to the Zambian people and the Zambian economy. However no-one should be in any doubt that we will vigorously pursue our full legal rights and interests in Zamtel through the courts both in Zambia and internationally, until we have satisfaction.”
LAP GreenN bought Zamtel in 2010 for $275 million. It maintains that under its management from the 2010 purchase, Zamtel’s market share was increased significantly and revenues grew 50 percent. Lap GreenN took on $75 million of debt and invested $200 million in the company.
Zambian Attorney General Mumba Malila said in January that the Zambian government was still working out how LAP GreenN will be compensated for its shares and the investment that the company had made in Zamtel. No proposal has since been tabled.
Newly-elected in September 2011, Zambian president Michael Sata alleged that the sale of Zamtel had involved the bribing of senior government officials. The former Communications and Transport minister was arrested and charged with corruption.
As a result of the seizure of the Libyan interest and similar moves against privatised banks, credit rating agency Fitch warned last month that Zambia’s B+ rating was at risk. Fitch was particularly critical of the Zambian government’s failure to offer proper compensation.
Lap GreenN has other African telco investments in Uganda, Rwanda, Niger, Ivory Coast, Zambia.