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HH committed a blatant crime on sale of Musio-OA-Tunya Intercontinental Hotel

"He was a listed Director of Sun International Zambia and he did not disclose his interests"

By SEAN TEMBO
I WAS very happy when l heard that the UPND Party President, Mr Hakainde Hichilema was going to be featuring live on a special Hot FM program to provide further explanations to allay the allegations that had been leveled against him by Honorable Edith Nawakwi, the Party President for FDD, who at the time of privatization was the Minister of Finance under the FTJ Government.
Like l have always said, these allegations of misconduct against Mr Hichilema are very serious, especially given his position as an aspiring President of this Republic. That is why l was not agreeable with Mr Hichilema’s initial approach of seeking to downplay these allegations by responding to them using Facebook and Twitter memes.
I have always insisted that Mr Hichilema needed to explain himself in the same detailed manner that Honorable Nawakwi made her allegations. And am sure that l am not the only citizen that demanded for him to explain himself in detail. You see, the assets which Mr Hichilema is alleged to have misappropriated are national assets, and as a bonafide citizen of this Republic, that makes them my assets too. So l have every right to pursue this matter to its logical conclusion. The fact that l am a practicing Statutory Auditor, Chartered Accountant and Insolvency Practioner, gives me a privileged position to better understand the issues of corporate governance that are at play here. I would be failing in my duties as a citizen of the Republic if l did not use my privileged position of being qualified and experienced to actually help in explaining this national matter to my fellow citizens who might have the knowledge to understand it by themselves. That is the reason why l have written two articles on this matter since it arose last week, and this one is a third of such an article.
When l wrote my last article a few days ago, Mr Hakainde Hichilema’s lawyers had just written a demand letter to Honorable Edith Nawakwi. In that demand letter, they also sought to explain, on behalf of their client, three specific allegations. The first allegation was that Mr Hichilema had bought his Kabulonga house from Lima Bank which he was liquidating, the second was that he had undervalued RAMCOZ assets during privatization and the third was that during the sale of Mosiotunya Intercontinental Hotel, as Negotiating Chairman, he had ignored higher bids of $26m, $20m and $10 and instead sold the hotel to a lower bidder Sun International Zambia at $6.5m, which lower bidder he was a director in and has remained a director in. Like I indicated in my previous article, based on the explanations that Mr Hakainde’s lawyers had proffered on his behalf in the demand letter to Honorable Nawakwi, my view was that Mr Hichilema had reasonably been exonerated on the first and second issue, but not the third issue involving the sale of Intercontinental hotel. And so, during his Hot FM program yesterday, my attention was specifically directed on what his explanations would be on the last issue, and not necessarily the first and second issues.
Although the interview started a bit later than scheduled, l made sure that l remained glued to my two-band radio. I was happy to note that Mr Hichilema was very prepared for the interview. He did not only provide detailed and specific explanations, but he also backed up his assertions with documents, which was very commendable. However, this was only with regard to the Kabulonga House and
RAMCOZ issues. On his sale of the intercontinental Livingstone hotel, Mr Hichilema failed to explain himself for the second time.
Mr Hichilema’s argument regarding his sale of Intercontinental Hotel is that he was not a SHAREHOLDER of Sun International Zambia, which bought the hotel. However, the allegations are not that he was a shareholder but that he was a DIRECTOR in Sun International Zambia at the time that him as Negotiating Chairman for the Zambia Privatization Agency decided to sale Mosiotunya Intercontinental Hotel to Sun International Zambia at a lower purchase consideration of $6.5 million when they were other higher bids including $26 million, $20 million and $10 million. During his entire protracted interview on Hot FM, Mr Hakainde Hichilema did not at any given time deny that he was the ZPA Negotiating Chairman in the sale of Mosiotunya Intercontinental Hotel in Livingstone. Neither did he deny that he sold the hotel to a lower bidder of $6.5 million when they were higher bids of up to $26 million.
During the entire interview, Mr Hichilema did not deny the allegation that he was a Director in Sun International Zambia Limited which is a subsidiary of Sun International South Africa, and which was incorporated in Zambia on 18th November 1997. Neither did he deny the allegation that the process to sale the hotel started as early as July 1997, no that the sale was only concluded around March 1998.
The summary of the timeline of the allegations that were leveled against Mr Hichilema regarding the sale of the hotel, which Mr Hichilema failed to refute yesterday are that he was appointed as ZPA Negotiating Chairman for the sale of the hotel around July 1997 and that while he was ZPA Negotiating Chairman, he incorporated Sun International Zambia Limited on 18th November 1997 and in March 1998, he sold the hotel to a company that he had incorporated and in which he was a Director. To be continued tomorrow
My view is that these are very serious allegations regarding his conduct in the sale of the hotel, which Mr Hichilema failed to categorically deny yesterday. He would do well if he answered them at his earliest opportunity. The people of Zambia would like to know; was he the ZPA Negotiating Chairman in the sale of the hotel? Did the sale of the hotel commence around July 1997? Did he incorporate a company called Sun International (Zambia) Limited on 18th November 1997? Did he, as ZPA Negotiating Chairman sale the hotel in March 1998 to a company called Sun International (Zambia) Limited which he had incorporated a few months earlier, for a lower price of $6.5 million when they were higher offers as high as $26 million?
Now, let me address Mr Hichilema’s arguments regarding his role in the sale of the hotel. His first argument is that the Sun International offer came with a $50 million dollar investment promise. However, we are told that the Sun International offer was not the only offer that came with a promise of reinvestment. All the other offers came with comparable reinvestment promises, so there was nothing unique about the Sun International reinvestment promise. Mr Hichilema’s other argument is that the sale of the hotel to Sun International (Zambia) Limited is one of the few privatization success stories because it had remained operational up to now.
Well, firstly there are plenty of the privatized companies which are operational and robust today, including Zambian Breweries, Zambia Sugar, ZANACO etc., and secondly the fact that a privatized company is robust and operational today does not excuse the illegality that might have taken place in its privatization process. The third argument that Mr Hichilema puts forward is that he was not a Shareholder in Sun International (Zambia) Limited.
Like l earlier said, l have been very keenly following this privatization issue since it caught momentum last week and l don’t know of anyone who has accused Mr Hichilema to have been a shareholder in Sun International (Zambia) Limited, but a Director. So the quest by Mr Hichilema to answer an allegation which was not leveled against him and instead ignore one which was, is akin to that student who walks into an exam room and finds that none of the things that they had studied have come in the exam. So in order to show the examiner that they at least know something, they just begin to answer questions that have not been asked in the exam, simply because that’s all they can manage to do.
Allow me to now address the issue of whether the fact that Mr Hichilema was not a shareholder of Sun International (Zambia) Limited but only it’s Director would still mean there was a conflict of interest or not. The answer is a definite YES. There was a conflict of interest. The only question is whether Mr Hichilema declared interest or not. My take is that he most likely did not, because if he had, he would have been gleefully waving the declaration in front of the camera during his interview yesterday, in the same manner and fashion that he was waving his title deed for the Kabulonga house.
The next question is whether such apparent conflict of interest would amount to a criminal offense or whether it is just an ethical and moral issue? Well, section 11 of the Zambia Privatization Act Cap 386 of the Laws of Zambia states “if any person is present at a meeting of the Agency or any committee of the Agency at which any matter is the subject of consideration and in which matter that person or his immediate family or his professoinal and business partners, is directly or indirectly interested in a private or professional capacity, he shall, as soon as is practicable after commencement of the meeting disclose such interest and shall not, unless the Agency or the committee otherwise directs, take part in any consideration or discussion of or vote on, any question touching on such matter”.
Indeed, section 11 of the Zambia Privatization Act, Cap 386 of the Laws of Zambia above is very clear.
Therefore, if Mr Hichilema did not declare interest, which l doubt he did, then he possibly committed a criminal offense. If indeed he committed a criminal offense in the sale of Mosiotunya Intercontinental Hotel in Livingstone, the next question is what are the penalties?
Well, this question is answered by section 48 of the same Act, which states “a person who knowingly falsifies any information or KNOWINGLY DOES NOT DISCLOSE ANY MATERIAL FACTS or solicits for his own use or as agent of any other person any confidential information relating to the privatization of a State Owned enterprise shall be guilty of an offense and shall be liable on conviction to a fine not exceeding fifty thousand penalty units or to imprisonment for a term not exceeding five years, or to both”. There you have it.

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