Analysis of Zambia’s world of theft and abuse of public resources

Jun 25, 2002 02:00 AM

Recent years have seen demands for a full investigation of Frederick Chiluba and his colleagues. But now new information for the first time gives us a glimpse into the murky world of theft and abuse of public resources that has left Zambians hungry and in tatters.

This story tells us how former Zambian president, Chiluba, and his cronies such as Faustin Kabwe of Access Finance Services and intelligence chief Xavier Chungu managed a money-laundering matrix that has been ripping off national resources since 1995. Prior to 1995, Chiluba seems to have depended on his relative B.Y. MWila who has, chiefly through scams run from the Ministry of Defence (MoD).
The Auditor General's report on the MoD procurement from 1992-2000 gives clear evidence. The Audit report names key players in the scam as B.Y. MWila, and the two Permanent Secretaries, Boniface Nonde and Stella Chibanda, who facilitated the transactions. Chiluba must have known and participated in the spoils.
And we can recall that Chiluba, through Vice-President Enoch Kavindele and National Assembly Speaker Amusaa MWanamambwa, ensured that this Defence Procurement Audit Report was not tabled in Parliament in 2001, to avoid embarrassment during the 2001 elections.

We can also assume that before and after 1995, oil procurement also yielded commissions for Chiluba and his friends, as the state owned Zambia National Oil Company, chaired from State House by his economic adviser Donald Chanda "lost" over $ 100 mm of taxpayer's money. Did they lose it or does someone know where it went?
Yet, President Levy MWanawasa government has quickly agreed to take over the debt without investigations. By 1995, a new system had begun -- the Money Matrix. Chiluba, with the help of Chungu and then Minister of Finance Katele Kalumba saw to it that huge resources tens of millions of dollars -- were allocated to the Zambia Intelligence Services (ZIS- popularly known as OP) with Chungu as Director General.
These resources were sent out of the country, and paid out to both local and foreign-based individuals and companies, for dubious supplies as well as straight theft of public resources. The accounts were used to pay for personal expenses of Chiluba, his family and cronies and sometimes also for legitimate purposes of ZIS.

The full structure and persons involved in the theft is still being unravelled. However, the first pieces of the structure of the Chiluba money-laundering set-up are beginning to be known. It was simple enough, and was also bold, arrogant but ultimately stupid. In most of the past seven years, the amount of money given to the intelligence (OP) was more than double of what Parliament voted for.
For years parliamentarians have bemoaned the excessive and unaccounted for funding of OP. Now we are beginning to know where the money went: the lifestyles of Chiluba, Chungu and other cohorts were lavish. They all lived in a world of make-believe. The money would first be credited to the ZIS accounts called Permace-General at Zanaco in Lusaka and an account known as Zamtrop at Zanaco in London.
Another account was opened at Zanaco in Lusaka under the name of FJT Centre and FJT Institute. Funds from all these accounts were disbursed to Standard Chartered Bank in Channel Islands, and other Banks in Geneva, Brussels, and London amongst other places. For instance, on November 28,2001, the FJT Institute transferred $ 81,629.09 (then about K 319 mm) to Standard Chartered Bank in Channel Islands, and the beneficiary was a Mr. David Stally, probably a nominee of Chiluba's.

The inner circle of players in this game are found together at Access Financial Services. The chairman, Francis Kaunda, Aaron Chungu and the mastermind, CEO Faustin Kabwe, who has recently fled to New York perhaps he saw that his scams were about to be exposed.
Zambians will re-call Kabwe's influence peddling when it came to the attempt to purchase Ndola Lime for Chiluba's Socomor friends in Belgium. Faustin Kabwe facilitated the deal that saw Hitesh Desai sell the mansion in which Chiluba currently resides in North Harrow, London.
The representative in Zambia of River Properties Overseas is Mr. Mike Sikazwe of Access Financial Services! The property purchase records indicate that it was bought for $ 145,000, but sources close to Access Financial put the figure above $ 300,000 suggesting a tax fraud.

But it's not just Chiluba who has moved to Kabulonga. Recently his daughter Helen Chiluba bought a mansion previously owned by H.S. (Kitwe) (Henry Shikopa), and previously rented by World Bank resident representative Lawrence Clarke on Sable Road, Kabulonga. The purchase price was said to be $ 80,000 -- but sources close to sale agents Chatham Real-Estate (owned by Francis Kaunda's son) put the figure close to $ 160,000, suggesting another tax fraud.
The house was bought by Helen and her husband Bwalya Kapapa under their company Final Touch but where did the young couple get the money? Curiously enough, sale records indicate that the assignor (vendor) ofthe house was former tenant Lawrence Clarke, although there is no record of him becoming the owner of the house. Dr. Clarke is a close friend of Kabwe.

The next set of players is another law firm, Cave Malik, whose offices are based at Access Finance in Lusaka. Over the years, Cave Malik was paid over $ 2 mm through the Zamtrop account. The key partner is Bimal Thacker, supported by Mittal. Thacker is a very close friend and personal lawyer of Francis Kaunda, the chairman of Access Financial Services and United Bank of Zambia.
Thacker was also a paid consultant to the ZCCM Privatisation Negotiating Team whose chairman was Francis Kaunda. Of course, ZCCM Privatisation Negotiating Team mostly famously arranged the sale of Luanshya mine to Binani.
We now hear that the representative of Binani in Zambia is said to be none other than Francis Kaunda -- the man who first introduced Binani to Chiluba. And we know that Chiluba and the former finance minister Katele Kalumba looked the other way and let Binani plunder RAMCOZ, causing ZANACO to lose $ 10 mm of public money.

The MWanawasa government has again, been very quick in taking over the debt, without investigations. Why? Remember when the United Bank of Zambia was put into receivership and later re-opened? Sources at Bank of Zambia reveal that Access Finance was peddling its influence with Chiluba, because it stood to lose deposits of over K 5 bn it had in the Bank -- which, by the way, is chaired by Francis Kaunda.
Another set of players are Meer, Care and Desai, who over the years have been paid almost $ 9 mm from the Zamtrop account. This is a law firm based at 97-99 Park Street, Mayfair in London, whose partners all have their roots in Zambia. The partners include Iqbal Meer (who had also helped to manage Polythene Products and ran a law practice in Lusaka between the 70s and 80s).
Meer was also involved with the Meridien Bank and is known to be Faustin Kabwe's personal lawyer. The second partner, Richard Care, was a GRZ adjudicator during 1960s, whilst the last is Naynesh Desai. Clearly, Access Financial Services is deeply tied into the Chiluba money matrix, as well as the OP. Sources at the Ministry of Finance disclose that over $ 14 mm of public resources has passed through to Access Financial Services and their cohorts.

Over the years so many people have seen Xavier Chungu drive with visitors of all colours and hue to Mambalima House, the headquarters of Access Financial Services in Lusaka. Most of the Directors of Access Financial Services are former directors or managers in Meridien BIAO Bank and ITM owned by Andrew Sardanis.
These are seasoned plunderers and commonly known as wheelers and dealers. It is scarcely credible that such deeds could be perpetrated on the nation's treasury without the knowledge and participation of Chiluba. The first and last link was Edward Shamutete and Shimukowa, the former CEO and chairman of ZCCM.
At ZCCM, Shamutete helped Chiluba with tens of thousands of dollars and British pounds for Chiluba's personal expenses, in the early 1990s and beyond. The first cash payments of $ 25,000 and £ 5,000 were made to Vera Chiluba from ZCCM, in response to requests from Chiluba. The biggest scams at ZCCM involved procurement, property and commissions from the sale of cobalt and the not much talked about copper. Over $ 80 mm is missing from the sale of cobalt and $ 60 mm from copper.

So now on to the grand master Chiluba, Zambia's second president, and the most important player in the matrix. We all know his outfit, the FJT Institute of Democracy and Industrial Relations.
Until recently, the Institute was being built by the use of public resources from the Presidential Housing Initiative (PHI) and money meant for the renovations of the Mulungushi International Conference Centre for the 2001 Organisation of African Unity (OAU) conference, arranged by chief lackey and Chiluba's press aid Richard Sakala. Both Sakala and economic adviser, Donald Chanda benefited from car hire businesses and building materials from PHI.

The Carlington scam, Moses Katumbi's Chani Fisheries, the infamous Machungwa/Mandandi/Kalumba -- K2 bn scam, the award of single source contracts to the Melcome Group and giving of land designated for parks in Lusaka to several members of the Greek community in favour of donations to Chiluba's millions -- these are all minor in comparison to the amounts now under question that have disappeared through the grand schemes of Chiluba, Xavier Chungu and Access Financial Services! Cash payments from the ZIS London accounts cannot be tallied with official business and do not adhere to proper government financial procedures.
The accounts were run on the single signature of Xavier Chungu. Through his benevolence, our ambassador in Washington, A. Shasonga received $ 1,238,124, PS Boniface Nonde (now on forced leave) was paid $ 22,000, a Nkumbula $ 541,000 and Chiluba's former secretary, Mukoma $ 12,500. A company called Systems Innovation, thought to be an in-house company of Chungu and his cohorts, and received $ 17 mm.

The list is endless. Xavier Chungu spent over $ 1.2 mm on buying clothes and jewellery from Boutique Basile, Geneva and Lenkersdorff Jewellers for himself and Chiluba. Pilatus Engineering was paid hundreds of thousands of dollars from the ZIS London and Lusaka accounts -- said to be for vehicles during the 2001 elections. A Zambian Bank, First Alliance Bank, part of the Astro Holdings Group also received $ 217,000 from the ZIS London account.
Astro Holdings also sold major assets to Edward Shamutete -- where did he get the money and at which offshore account was Astro Holdings paid? Was it not a Mauritius based offshore company? Cash withdrawals of over $ 500,000 were made from the ZIS accounts. Some of Cave Malik's money (over $ 2 mm) paid from the OP-Permace-General account (ZANACO) was transferred to Habib Bank in Geneva. Chiluba's family and friends used ZIS money for personal expenses, as evidenced by cash payments to Chilubais children Helen and Fred Chiluba Jr., and others, as well as payments for school fees in expensive establishments in fashionable parts of Europe.

Payments were also made to and for Chief Justice Ngulube, politicians Katele Kalumba and Vernon MWaanga, ZCCM's Shimukowa, Urbano Mutati and Nkumbula, and Ministry of Finance Permanent Secretaries Boniface Nonde and Stella Chibanda.
Amazingly Chibanda is now an adviser to one of the Executive directors at the World Bank. Will the Chiluba matrix infiltrate even the World Bank? Will MWanawasa finally help lift Chiluba's immunity and prosecute him and others? Perhaps not -- it was his finance minister Kasonde who informed Parliament that the ZIS money was used for border protection, when he knew otherwise.
Will Speaker MWanamambwa allow a motion to lift Chiluba's immunity or will he decline illegally like he did, not to allow the impeachment motion on Chiluba in 2001? Perhaps not again he is the same Speaker who denounced a member of parliament who wanted to table the ZIS accounts and described it as "cheap political games".

Recently a member of parliament received a letter from the National Assembly that she could not ask a question that pertains to the FJT Institute. For all we know Chiluba may still end up being protected by MWanamambwa, such is the extent of Chiluba's influence. After all Catherine MWanamambwa has to protect her business interests, as she did in 2001 and now under MWanawasa, with her daughter's participation in the Maureen MWanawasa Community Initiative. It's a sick world of influence peddling.
The final question is will the MWanawasa government, Zambia Revenue Authority and Drug Enforcement Commission ensure that all recipients and participants in the abuse of public funds be brought to book and when? Time will tell. Meanwhile, we will continue to dig deeper in the interest of all Zambian people.

Source: The Post
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