The Zambian government could reverse the US$257m sale of a 75% stake in fixed-line operator Zamtel to Lap Green Networks after an inquiry found that the stake had been illegally sold, according to a Reuters report.
In a statement to TelecomFinance Lap…
The Zambian government could reverse the US$257m sale of a 75% stake in fixed-line operator Zamtel to Lap Green Networks after an inquiry found that the stake had been illegally sold, according to a Reuters report.
In a statement to TelecomFinance Lap Green expressed “deep concern” at the prospect of a review of Zamtel’s sale and the potential reversal.
Reuters reported that Justice Minister Sebastian Zulu had concluded that the sale of the company had been fraudulent and allegedly illegal because LAP Green had failed pre-qualification tests and Zamtel had been undervalued.
President Michael Sata reportedly said: “If cabinet decides then we will have no choice to reverse the decision.”
LAP Green Networks, which is part of the Libya-Africa Investment Portfolio (LAP) group, acquired a 75% stake in Zamtel from the government for US$257m in 2010. The government reportedly retained the remaining 25%.
Since the transaction was completed, a new government has taken power in Zambia. Led by the Patriotic Front party, this new government has pledged to inspect some commercial deals organised by the previous administration.
According to a report on the government’s website, former vice president Enoch Kavindele has also criticised the Zamtel sale.
Kavindele said that, at the time of the sale, Zamtel’s market value was estimated at more than US$3bn and that selling the stake for US$257m was unreasonable.
According to another report by the Times of Zambia, Justice Minister Zulu concluded that Zamtel had a book value of US$81m and was undervalued by US$38m.
LAP is a Libyan foreign investment vehicle that claims to focus on “contributing to the development of African countries”.
LapGreen said that it will “work diligently to protect its interest as it confirms that Lap GreenN’s participation on the international bid for the telecommunications operator was done strictly following the legal framework as all other participants in the process”.
