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Africa's richest woman says asset freeze dooms her Angolan firms

Jan 04, 2020

Isabel dos Santos, Africa's richest woman and the daughter of former Angolan President Jose Eduardo dos Santos, said her businesses in Angola are set to fail after a court froze her assets and bank accounts in the oil-producing country.

"Freezing my accounts prevents me from being able to manage and recapitalize my companies," Dos Santos, who has been living outside Angola since 2018, said in an emailed statement. "As such, they have all but been sentenced to death."

The 46-year-old London-educated engineer amassed a fortune during her father's almost four-decade rule and has an estimated net worth of about $2 billion, Bloomberg data shows. In Angola, her business empire includes stakes in Angola's biggest mobile telecommunications company Unitel, two of the country's biggest private lenders, Banco de Fomento Angola and Banco BIC, a supermarket chain, a beer factory and a cable company.

Outside Angola, Dos Santos holds indirect stakes in several companies, including Portuguese oil company Galp Energia SGPS and cable company NOS SGPS.

Earlier this week, an Angolan court placed a freezing order on the Angolan assets of Dos Santos, her husband Sindika Dokolo, and one of her executives, Mario da Silva. The nation's Attorney General accuses the three of engaging in transactions with state-owned companies that led to the government incurring losses of $1.14 billion.The move marks another step in President Joao Lourenco's bid to battle graft and dismantle the influence of his predecessor's family over key industries.

Since Lourenco took power in 2017, Jose Filomeno, Isabel's brother, has been fired as the head of Angola's sovereign wealth fund and accused of illegally transferring $500 million from Angola's central bank to the U.K. Their sister, Welwitschia dos Santos, recently lost her seat as a member of parliament after leaving Angola.

Isabel dos Santos, whose wealth and influence earned her the nickname "The Princess," has accused Lourenco of carrying out a witch hunt against her family and insists that her wealth has been the product of hard work and determination. She said she created more than a dozen companies in Angola that collectively employed more than 10,000 people, whose jobs were now at risk.

"I was given no opportunity to respond to the charges which, so far as we are even able to understand them, appear to be wholly bogus," she said. "We are concerned that the so-called charges may be based on fabricated documents."

Even so, the clamp-down against Dos Santos has been welcomed by some in Angola, where poverty is rife despite the nation's oil and diamond riches and resentment has been stoked by the concentration of power and wealth in the hands of a politically connected elite. The southern African nation is ranked one of the world's most corrupt nations by Transparency International.

"The idea that they are being the target of a witch hunt is hard to accept when many of them have been living the good life and never seemed to be worried when others were being prosecuted," said Paulo Carvalho, a sociology professor at Agostinho Neto University in Luanda, the Angolan capital. "The freezing order is aimed at preventing the transfer or sale of some of these assets and won't interfere with the day-to-day business of these companies."Dos Santos said she would fight the injustice that had been perpetrated against her and warned the court ruling would send the wrong message to international investors.

"If this judgment is allowed to stand it shows that the justice system is flawed and the government is prepared to abuse it for their own ends," she said. "This is a smokescreen to mask the flawed economic policy which the current government have introduced."

Allegations made by the Angolan attorney general include that:

- The state, through its diamond-marketing company Sodiam and oil company Sonangol, transferred large sums of foreign currency to foreign companies -- of which the ultimate beneficiaries were the individuals facing the court order -- without securing the expected returns.

- Sonangol paid 75.1 million euros ($83.8 billion) to buy a stake in Galp Energia indirectly held by Dos Santos and her husband. Shortly before Dos Santos was fired as Sonangol's chairwoman in 2017, she tried to repay the consideration received for the stake in Angolan kwanzas but Sonangol's new board returned the money and asked that payment be made in euros. It was never received.

- Dos Santos and her husband entered a 50-50 joint venture with state-owned diamond company Sodiam to invest in Geneva-based jewelry maker De Grisogono. Sodiam ended up paying most of the initial 120 million-euro loan that was taken to fund the investment.

- Former President Dos Santos ordered Sodiam to sell diamonds to companies related to the individuals notified in the court order at below market prices. They then sold the gems abroad and generated hefty profits.

- The three individuals sought to hide assets bought with state funds by transferring them to other entities. Almost all of their assets were alleged to be held outside of Angola.

- Portuguese police blocked a 10-million-euro bank transfer from a Portuguese bank to Russia that Dos Santos tried to carry out through her business partner Leopoldino Fragoso do Nascimento.

- Dos Santos tried to sell her 25% stake in Unitel to a foreign investor.


Credit: Bloomberg