Dora Siliya tribunal: Dora ignored Legal advice – Sichinga

More damaging revelations for the embattled Minister to answer….

From today’s POST Newspaper…

SOLICITOR General Dominic Sichinga yesterday told the Judge Dennis Chirwa Tribunal that his legal opinion on RP Capital Partners of Cayman Islands was disregarded. And Sichinga testified that he was not aware that a second Memorandum of Understanding (MoU) between the Zambian government and RP Capital Partners had been executed.

Sichinga, who was led in examination in chief by tribunal chairperson judge Chirwa, said the legal advice on the RP Capital MoU was not complied with. "So quite clearly your opinion was not complied with, it was disregarded, wouldn't you agree?" asked one of the petitioners' lawyers Bonaventure Mutale as Sichinga responded: "I am agreeing, yes." Mutale observed that Sichinga's legal opinion though quite detailed had been literally torn apart in the MoU executed by Siliya. He asked Sichinga if he realised that all his recommendations had not been considered in the MoU that was signed to which Sichinga responded in the affirmative. "Your letter of November 25, 2008 is four pages. Would you agree that all those points raised in your opinion have not been considered in P1 [MoU]?" Mutale asked. Sichinga agreed that the points he raised in his legal opinion of November 25, 2008 had not been considered. He told the tribunal that he saw several drafts of the same MoU but he had not seen the final draft of the signed document.

This is a significant development because both Dora and the Vice President stated in their statements to parliament that the Solicitor General and Attorney General had signed off the MoU.


In February this year, Siliya in a ministerial statement to Parliament revealed that the government signed the MoU with RP Capital Group after the advice of Sichinga.
"I wish to inform this House that it was after the advice of the Solicitor General who dealt with issues pertaining to the MoU that we went ahead to sign the MoU on 22nd December 2008, taking into account all concerns raised," Siliya said.
A few days later, Vice-President George Kunda told journalists at a press briefing that Sichinga rendered his final opinion clearing the RP Capital MoU for execution or signing.
"This MoU was dealt with by an Acting Principal Counsel and the Solicitor General before the Attorney General dealt with the matter. The Acting Principal Counsel on behalf of the Solicitor General on 21st November, 2008 rendered his [her] opinion on the MoU. This opinion was rendered in the name of the Solicitor General. The Solicitor General rendered a further opinion on 25th November, 2008 on the same Memorandum of Understanding. On 5th December, 2008, the Solicitor General rendered his final opinion clearing the MoU for execution or signing," Vice-President Kunda said. "It must also be emphasised that the Solicitor General held further consultations with the minister of communications on this MoU. The MoU was finally signed on 22nd December, 2008 by all the parties."


It turns out the Solicitor General did not even see the final draft of the said document. This is clearly no way to run government.


The PANEL

Where are the voices?

I have just been listening to a teaching (Homily) by Fr. Michael Pfleger. He came to international prominence when he preached at Rev. Jeremiah Wright’s Church during the last US presidential election (Rev. Wright is the flamboyant evangelist whose firebrand sermons caused Obama significant embarrassment in the campaigns). Fr. Pfleger seems to have dedicated his life and ministry in the catholic church to help the poor (black people) of Chicago. I have never been to Chicago (unless you count the few times I have connected flights through O’Hare International Airport) and therefore do not have a firsthand account of the many problems facing the black folk. However in his sermon entitled “where are the voices” Fr. Pfleger lists some of the problems ….

There are only 11 000 black males in the 22 Colleges in the State of Illanois.

22 000 black males are currently incarcerated in the state’s 22 ‘correctional facilities’.

Black males have a pass rate of 34% in colleges.

More black males die of gunshot wounds in Chicago than US Soldiers in Iraq and Afghanistan.

In “where are the voices” Fr. Pfleger is questioning why there isn’t public outrage at these appalling statistics.

What is the relevance to Zambia you may ask?

Zambia has been ruled by the MMD since 1991. There have been a number of successes BUT on the whole lives of our people have not improved significantly. There is still a shortage of drugs in our hospitals, limited access to good schools, lack of sanitation etc. The excuse time and again is that GRZ lacks resources to provide these essential services! BUT this is the same government that is able to find funds to purchase expensive vehicles for Ministers and other political appointees, pay themselves huge salaries and benefits while they encourage civil servants to accept a pay freeze.

Everyday our papers (the independent ones) are full of one scandal after another. BUT Zambians remain ‘obedient’ and continue paying their taxes.

When the Local Authority does not provide running water and Sewerage services (even after paying for these services), we simply find money to sink boreholes.

When the Local Authority does not provide passable roads, we simply invest in 4X4 vehicles to navigate the potholes.

When ZESCO imposes a national wide load shading of electricity, we simply invest in backup generators.

When crime goes up, we hire private security firms.

BUT where are the voices for the people who can’t afford spend their way out of the mess caused by GRZ incompetence?

The PANEL

Dora Siliya tribunal: Please stop the circus. She is guilty

Readers of today's POST were no doubt shocked to read that Dora Siliya not know what the Attorney General meant when he said

"For all the reasons I have given, I advise that the signed MoU be taken as a nullity...".

It seems like she could not understand this key sentence because of the word "nullity".

I do not expect the Hon. Minister to be a walking dictionary but she has at her disposal thousands of civil servants at the ministry and one of them should know the meaning of this word. If that was not possible, a trip to the nearest bookshop to purchase a dictionary would have saved us from the mess we find ourselves in. Alternatively the Hon. Minister should have just phoned the AG's chambers and asked for a clarification. She can't surely say she had no credit on her phone because we pay her bills.

BUT we are not about to let her off the hook just because the entire Ministry of Communication does not know the meaning of the word "nullity". This is because it is a well established fact in law that ignorance can not be offered as a basis for a defence.

The whole thing is mind boggling. Here we have a Minister about to sign a MoU worth millions of dollars and she does not bother to understand the opinion of the Chief legal advisor to GRZ?

On why the contract was awarded to RP Capital ...

Earlier, Siliya told the tribunal that the proposal by RP Capital to valuate Zamtel's assets was very impressive.

Siliya said she signed the MoU with RP Capital after she was satisfied that their proposal was in line with her ministry's agenda on the future of Zamtel.

Asked by Mutale to outline the credentials that RP Capital gave to merit the selection as the valuator of Zamtel's assets, Siliya said the company had done a lot of work within the region.

Siliya said several companies expressed interest to undertake the Zamtel valuation exercise but that RP Capital was the only company that talked about the valuation of Zamtel while others wanted an outright purchase of the company.
"What credentials did they produce as being capable or qualified to do that exercise?" Mutale asked Siliya and she responded: "They told us that they did a lot of work in the region...they referred to some work they were doing in South Africa and Congo DR."
When further asked to elaborate on the works, Siliya said the company was doing some business re-engineering.
But Mutale said that the job was not the same as valuation and he told Siliya that she had not been helpful to the tribunal in the aspect of fleshing out the credentials that prompted her ministry to settle for RP Capital to valuate Zamtel's assets.

This was an opportunity for the Minister to shut her doubters by providing concrete reasons why she felt RP Capital were best placed to undertake the valuation but all we got was hogwash.

The President should stop this tribunal at once because it is a waste of money and time. We are wasting the judges' time when they could be sorting out the huge backlog of cases at the High Court. Enough evidence has been produced to convict the Hon. Minister without doubt.

The PANEL

The future of Nitrogen Chemicals of Zambia

It is easy to forget that Zambia actually has a fertiliser manufacturing plant in Kafue. However, this plant has been a drain on public resources for some time now because it simply can not produce fertiliser at an economic price. The situation has been made difficult by the fact that it is cheaper to import fertiliser than manufacture it locally. While I appreciate that NCZ is a significant employer in Kafue, the rest of the taxpayers can not continue subsidising jobs in Kafue. If the plant can not operate on a commercial basis, GRZ needs to either close it down immediately or find a private company to run it. I would rather the resources were spent improving schools and hospitals in Kafue than propping up a few hundred jobs which is not sustainable in the long run.

The latest edition of Executive Issues has a very good analysis of the situation.

Before the 2009 budget was unveiled Government had talked of an allocation to revamp operations at the stricken Nitrogen Chemicals of Zambia (NCZ) in Kafue, the country’s only fertilizer manufacturer. But in the event no such specific provision was made and perhaps rightly so as there are grounds for skepticism whether in fact by such means-periodic and normally insufficient allocations- the operation can be resuscitated and sustained. This approach appears designed to merely “keep the peace” for a while among the restive and increasingly assertive workers. But a more far-reaching decision on the fate of the plant is now required. Temporal political appeasement will no longer do. Up to this point, decisions on the plant have been mainly worker-driven. Workers there tend to take the view and probably rightly so that the authorities are somehow “negligent.” They have taken to the street in past to force action. They are a constituency and politicians are not in the happy position of being able to blissfully ignore them.

In the aftermath of the state opening of parliament on January 16, 2009 for instance, there was a demonstration outside the offices of the Kafue District Commissioner by NCZ employees. The source of their discomfiture was the fact that there had been no mention of recapitalization of the plant by Government in the President’s opening speech. This created and increased anxieties among workers about their future. It was not the first demonstration by NCZ workers over the future of the plant that has been shut quite a while now.

An earlier demo was staged in such a way that it blocked the main road from the south to Lusaka disrupting the normally heavy flow of traffic from the south and during the copper price boom traffic was very heavy since road transport was the main conduit for mining equipment, spares and for mineral exports in view of the buggered railway system! Following the last demo, Agriculture Minister Dr. Brian Chituwo counseled calm and disclosed that an inter-ministerial committee was still studying the matter and the workers would be informed of the outcome.

Further, when he accepted the credentials of Oh Jae-Hack as the ambassador of South Korea to Zambia, President Banda invited South Korea to invest in NCZ and help boost Zambia’s agriculture. He said South Korea had the appropriate technology for NCZ to produce cheaper fertilizer. No direct response from the envoy is on record.

Subsequently, Vice-President George Kunda speaking in the National Assembly said in answer to a question from Chikankata MP Munji Habeenzu that Government would allocate resources in the 2009 Budget to revamp operations at NCZ and that government was aware of the problems there. That is probably what the workers wanted to hear- news of a possible respite from the perennial tight rope they have found themselves walking. It is also the case that with the rising world price of fertilizer and the push to prioritize agriculture, government has an abiding interest in reviving NCZ and it does hold the key to the future of the plant.

Finance and National Planning Minister Dr. Situmbeko Musokotwane was more forthright and realistic when he spoke on the issue saying that Government was not in a position to run NCZ, would prefer the private sector to takeover and invited any interested parties to open up discussions with government on the matter. He also said something that is not often said but which appears to be the real issue at NCZ -that the installed technology at the plant may be outdated. That is the issue that the inter-ministerial committee must face head as it seems the key to the logjam.

In the short-term, there is probably no alternative to government remaining engaged but they need a strategic partner with whom to re-look the whole operation and finance a re-orientation of the whole plant in terms of technology and possibly the product range as well. NCZ in its heyday seemed to do a rolling business with the Democratic Republic of the Congo in by-products that go into the manufacture of explosives and it is a business that still exists and could grow. NCZ is well positioned to supplement earnings through it. In its present state however, there appears to be no takers for NCZ and certainly not on an “as is” basis. Sitting back to wait for expressions of interest will only ensure its permanent closure. Government needs to be pro-active and try for instance to pursue the South Koreans who have modern technology. The plant simply has to be upgraded and put on a new footing.

Periodic allocations merely to douse labour unrest will be inappropriate and there can be assurance that it will achieve the desired results. Time is for a long term plan to salvage the plant before it goes real rusty and is forgotten.

Already things are beginning to point in that direction.

The PANEL

Dead Aid Discussion

The Dead Aid issue is being discussed at the Sunday Times Oxford Literalry festival on Saturday 4th April at 6pm.

The well-documented horrors of extreme poverty around the world have created a moral imperative that people have responded to in their millions - yet the poverty persists. Are we not being generous enough? Or is the problem somehow insoluble, an inevitable outcome of historical circumstance? Dr Dambisa Moyo, a former Global Economist at Goldman Sachs and the World Bank, has written Dead Aid, arguing that the most important challenge we face today is to destroy the myth that aid actually works and showing how aid crowds out financial and social capital and feeds corruption. Do we need alternative solutions, and if so what are they? Join the discussion with Dambisa Moyo and Phil Bloomer, Director of Campaigns and Policy, Oxfam, with journalist and broadcaster Jon Snow in the chair.

Further details and tickets from the festival website (item 754).

The PANEL

Corruption is now rife in Zambia - Nkole

I have previously noted that corruption has reached alarming levels in Zambia. It seems like it has become woven into the moral fabric of the country and has been accepted as normal practice. Max Nkole's statement has re-affirmed the governement commitment to fighting corruption. BUT words are not enough they should be followed by visible enforcement actions. The convictions secured this week against Mrs Chiluba et al have gone a long way demonstrating justice by done.

The PANEL

The executive Chairman of the Task Force on Corruption says corruption has became endemic in Zambia. Maxwell Nkole also notes that some people now feel corruption is a normal way of life. He has called on cooperating partners to continue supporting Government’s efforts in fighting graft by strengthening institutions such as the Anti-Corruption Commission. Mr. Nkole was speaking when US ambassador to Zambia, Donald Booth, called on him at his office. And Mr. Nkole said government is currently drafting the anti corruption policy in an effort to strengthen the fight against the scourge. He also said the policy will decide the future of the Task Force on Corruption

Source: Lusaka Times.

Zambian Airways saga: follow the loans paper trail

The government as expected has recruited the state owned papers in the fight against the POST (using the Zambian Airways situation). Story makes interesting read but surely the creditors of Zambian Airways should be left to fight their own battles. GRZ should only be concerned about the debts owed to public institutions such as National Airports, NAPSA and ZRA.

The PANEL.

By A Correspondent
THE gloves are off, the guns are out and blazing and the war is on. After enduring months of insults and bad reports, President Rupiah Banda responded with a rare but strong attack against his attackers.
President Banda’s attack was particularly targeted at Zambian Airways shareholders, who include Post editor, Fred M’membe, for their alleged part in the loss of US$30 million, some of which was taxpayers’ money. Mr Banda condemned the paper’s constant corruption allegations against his Government.
The Post is an institutional shareholder in Zambian Airways. Mmembe is one of the directors. Investigations have targeted the directors of the airline for causing the loss of $30 million.
The airline faces civil litigation aimed at recovering $30 million. Its chief executive officer, Mutembo Nchito, faces possible criminal charges ranging from fraud, theft, tax evasion, money laundering, and exerting undue influence on public officials to force them to authorise and release the loans.
The directors are facing charges under the law that are deemed ‘directors’ offences for false accounting to obtain the loans from the bank.
In an address to MMD cadres who marched to State House in support of his leadership, in the face of internal and external political attacks, President Banda stated that he would tolerate no nonsense from the party or cliques.
He charged that he is Republican President of Zambia and was now MMD acting president and would, therefore, not allow indiscipline in the party. To this effect, he fired two deputy ministers, whom he said, enjoyed wide coverage in The Post, for their purported good leadership. These were Lameck Chibombamilimo and Jonas Shakafuswa.
Mr Banda declared that he fought for national independence, and would not allow people’s freedom to be taken away by a clique. He demanded that the airline’s shareholders repay the $30 million they borrowed in questionable circumstances when they ruan Zambian Airways.
The president may be excused for sounding so strong against the shareholders in question because of the large sum of $30 million lent to Zambian Airways even when it showed signs of insolvency.
Mr Nchito as chief executive officer of Zambian Airways, with the help of Ministry of Finance and National Planning, appeared to have targeted public bodies such as Napsa, ZSIC, DBZ, and ZCCM-IH. He also ignored obligations due to ZRA, National Airports Corporation and Napsa.
The airline was bankrupt. Its books were bad. The books were so bad that an expert termed them ‘crimson red’.
The airline had no assets of worth, and it had been running consistently at a loss for many years and was insolvent. Despite its insolvency, the airline obtained loans and acquired debts totalling over $30 million.
Investigations are revealing that the obtaining of a string of loans was tied to the campaign quoting a ‘wide range’ of people demanding for the Government to turn Zambian Airways into a national carrier, and these people found ready media coverage.
The loans were allowed to pass because of its underlying status in the country as a ‘National Airline’ or one to be converted as such.
Creditors were duped that the ‘Government’ does not need to provide security for any loan. The assurances were given that once the airline was turned and taken over as a national carrier, the Government would assume the debts.
The directors ran a vigorous and parallel campaign demanding that the Government takes over the airline (with its debts) and make it a national airline. The take-over by the Government would have disguised this fact.
In all this, no explanation was given how the previous loans were utilised and investigators will be interested to establish that the loans went into the airline.
How did the airline’s chief executive officer Mr Nchito do all this? How did he obtain loans from banks and financial institutions in the face of stringent banking and financial regulations? The answers to this question will be very revealing.
Take for example the $5.5 million DBZ loan syndicated and guaranteed with Investrust and Intermarket Banking Corporation.
The loan was reportedly obtained by Zambian Airways by offering two planes worth $200, 000.00 each but valued at $1.2 million by the airline itself. Despite showing marked features of bankruptcy, and therefore not eligible for such a loan, DBZ (a public company) and the two banks, disbursed the loan of $5.5 million to Zambian Airways.
By September 2008, predictably, the loan was not performing. DBZ board consisting of director general Dr Abraham Mweenda, board members S. Beyani, R. Phiri, A. Musukwa and C. Habasonda decided to place Zambian Airways under receivership.
The board recognised that Mr Nchito had provided very weak security and receivership was inevitable since the loan was not being serviced.
The airline’s chief executive officer is then reported to have called for an urgent meeting where he came up with an ingenious proposal; turn the debt with DBZ into equity. Let the bank buy the shares by turning what the airline owed DBZ into shareholding.
He is also said to have pledged to bring more external security to the company, downsize and restructure the management of the airline, and reduce on unprofitable routes.
He informed the board that he would bring a strategic equity partner and allow the airline to be managed by Comair or Airlink.
He also stated that the airline’s books would be ‘clean’ since Zambia State Insurance Corporation (ZSIC) was expected to inject a $4 million into the airline which would allow Zambian Airways to buy the leased planes and clear outstanding lease amounts. The ZSIC bid, however, eventually failed.
In October 2008, while the country was steeped in election fever, Mr Nchito was busy working on the conversion of the $4 million DBZ debt into equity.
The DBZ board had consistently opposed this restructuring of its debt. The board expressed unwillingness with such an arrangement, and part of the current investigation aims at establishing that undue political influence was then brought to bear on the board members.
The DBZ board continued to refuse to buy shares in Zambian Airways. The board insisted on recovering the $4 million due by retaining the debt structure.
However, there was a presidential election in the air, President Mwanawasa who was deemed to be friendly to the airline and its associates was no more. The potential successor, Ngandu Magande had failed in his presidential bid, the board chose to be prudent and excercised caution.
Mr Nchito, however, desperately pursued the conversion of the debt to shareholding structure to escape the intended receivership action by DBZ and avoid paying the loan entirely.
He informed the DBZ board that he was bringing on board his business partners and Zambian Airways shareholders, The Post. The Post brought to the table a reasonable proposal.
The Post apparently drew up documents to allow DBZ exit from the syndicated loan and committed and undertook to assume and settle the other loans that DBZ had guaranteed and was outstanding with Investrust and Intermarket Banking Corporation totalling $2.1 million.
Mutembo and Nchima Nchito and Fred Mmembe then drew up and signed a document called ‘Common stock Equity Facility’ to finally convert the DBZ debt facility Zambian Airways owed, to equity facility. At this stage DBZ were deemed to be Zambian Airways latest shareholders! And the Zambian Airways directors had managed to escape paying the $4 million.
Minister of Transport and Communication Dora Siliya, in her ministerial statement to Parliament stated that DBZ did not buy shares in Zambian Airways and had insisted that the loan was still outstanding and had to be paid back.
In effect, the Government deems this purported conversion of the $4 million to shareholding as illegal and constituting a blatant fraudulent activity.
The biggest losers in this matter are leaders of civil society groupings that were blindly used to prevent the investigations of $30 million loss, and undermined the good standing of their institutions.
The PF leader, Michael Sata has been caught wrong footed. He called for President Banda’s Government to “silence criminals in Government and not The Post” (The Post Feb 21, 2009). One would think criminals are criminals wherever they are.
The invitation for non-governmental organisations (NGOs) to run parallel investigations is a diversionary tactic to characterise these criminal investigations as a campaign to silence critical media. Sadly, even respectable institutions of professionals such as the Zambia Institute of Chartered Accountants (ZICA), were drawn in the defence of criminal activities, and may live to rue their rash reaction.
Law Association of Zambia, Southern Africa Centre for the Constructive Resolution of Disputes and Transparency International Zambia supported the parallel investigations.
Whilst the NGOs were active during the calls for the probe of Ms Siliya, there is a deafening silence over the disappearance of the $30 million.
It is even ironical that an organisation such Transparency International Zambia formed to fight graft and theft of public funds could promote activities that might prevent the recovery of this money and are part of a charade to pervert the course of justice.
It is clear that the leaders of these NGOs are in an alliance that serves the interest, of those of their own clique rather than the interests of their members and the country. This smacks of double standards.

From the Times of Zambia (05/03/2009)

Quick updates

Chiluba’ s Wife sent to jail
Only disppointement is the relatively short sentence imposed.

Regina Chiluba, the wife of second Republican president Frederick Chiluba has been sent to jail.Mrs Chiluba has been imprisoned for three and half years simple imprisonment.She has been found guilty of two out of the six counts she was facing. One of the counts she has been found guilty involves a motor vehicle.This is in the case in which Mrs chiluba charged with six counts of failing to account for property believed to have been stolen or obtained unlawfully.
In the first count, she is alleged to have, between January 1997 and September 30, 2002, in Ndola, failed to account for possession of property on stand number NDO/14 purchased at US$80,000.
In the second count she faces a charge of failing to account for stand number KIT/643 bought at US$48,000 cash, using money suspected to have been stolen or unlawfully obtained.
In the third count, she faces a charge of failing to account for stand number KIT/645 purchased at US$60,000 cash.
In the fourth count, she is alleged to have failed to account for a motor vehicle, an Isuzu KB registration number AAT 2603 suspected to have been stolen or unlawfully obtained.
In the fifth count, she is alleged to have received from Dr Chiluba, a 61-inch Toshiba colour television set, serial number 69140018 model number PJ 98 B with knowledge that the same had been stolen.
In the sixth count, she faces a charge of failing to account for possession of K474 million cash suspected to have been stolen.

http://www.zambianwatchdog.com/?p=1358

Chibombamilimo, Shakafuswa expelled from MMD

Following their public sacking by the president, the two have now been expelled from the MMD. It seems the MMD has pressed the self-destruct button by allowing RB to literally act as judge and jury in this case.


Fired deputy ministers Jonas Shakafuswa and Lameck Chibombamilimo have been expelled from the MMD.MMD National Secretary Katele Kalumba announced in Lusaka Tuesday afternoon that the two, due to their arrogance, have continued to bring the MMD into disrepute and ridicule.Mr. Kalumba said that the MMD National Executive Committee unanimously, on that basis, resolved to expel the two MPs. This entails that there will be two parliamentary bye-elections.And Mr. Kalumba has said that the MMD will soon deal with Former Finance minister Ngandu Magande for his allegedly attempt to shield Zambian Airways from paying dues. [WATCHDOG].