New Zambian president forms committee to probe Zamtel stake sale

6 Oct 2011

Michael Sata, who was sworn in as Zambia’s president at the end of last month, has formed a committee tasked with investigating the controversial sale of fixed line incumbent Zambia Telecommunications Company (Zamtel) to Libya’s LAP Green Networks, Computerworld reports. The new president has alleged that the sale, which according to TeleGeography’s GlobalComms Database saw the Libyan outfit in June 2010 bid USD257 million bid for a 75%s stake in the telco, was marred by corruption. The previous government had claimed that the privatisation of the majority stake was carried out to save the company from closure after a plan to recapitalise failed.

The reversal of the sale was one of Sata’s major electoral campaign promises, with the politician having argued that the sale was, in fact, carried out for the benefit of previous government officials. Sata has said that 75% majority stake should have been sold to local investors and the Zambian public in order to empower them and give them full ownership of the telco. Zamtel managing director Hans Paulsen was cited as saying that the decision by the new government to investigate the privatisation process was welcome, while the telco also confirmed that LAP Green Networks was willing to cooperate in the process.

In April 2011 the state froze LAP Green’s stake in Zamtel in order to enforce UN-backed sanctions following unrest in Libya, and since then the Zambian government has been financing Zamtel’s operations, a situation which will remain unchanged until the sanctions are lifted.

The committee is now expected to issue its report on the sale within the next month, with President Sata stating: ‘I want the report within 30 days because Zamtel is a public company owned by Zambians and we cannot let the company go just like that. Zambians must know how the company was sold.’