18 April 2019

Angola: Stop Press - Angolan President Cancels Fourth Mobile Licence After Shareholding Controversy

London — Late this afternoon (18 April 2019) The Angolan President João Lourenço cancelled the awarding of the fourth mobile licence to a shell company with a General as its main shareholder. Watch this space to see what happens next.

The awarding of the fourth mobile licence in Angola shows that for all the talk of reform by the new President nothing ever changes. Russell Southwood looks at the pattern of shareholdings in the telecoms sector and what they tell us about how Angola operates.

In December 2017 I wrote an article about the granting of the fourth mobile licence in Angola. It was written in the context of the appointment of the new President João Lourenço in September 2017. He was talking of reform and seemed to be drawing a line between his administration and that of the former President. I wrote:

"In mid November Isabel dos Santos was sacked from being President of MS Telecom. However, what is unclear is whether this marks a separation of those involved in Government from business or merely the moment when new people from the Government get to enrich themselves".

This week the awarding of the new fourth mobile licence (as a unified global licence) to Telstar Communicacoes has provided the answer. 27 companies expressed interest, 6 passed the first stage assessment and only 2 met the full requirements. MTN was one of the two fully qualified bidders but dropped out in November 2018 saying that the process was "flawed" and there was a "lack of transparency", leaving Telstar - a company that has never run a full-scale MNO as the winner.

And the shareholders in Telstar? 90% is held by General Manuel Joao Carneiro and 10% by businessman Antonio Cardoso Mateus. According to a Telegeography report on 27 November 2018, the General has been linked with a small Angolan operator called Mundo Startel, one of Telecom Namibia's failed international investments.

Brazilian company Oi's dispute with Unitel revealed the full shareholdings in the largest of the MNOs in Angola. 25% is owned by Vidatel (an investment vehicle of the previous President's daughter Isabel dos Santos), a further 25% by General Leopoldino de Nascimento (Adviser to the head of the Minister of State and head of the House of Security of the President of the Republic with a fortune said to be worth US$3 billion according to Forbes) and 25% to Mercury Telecom (owned by state-owned oil company Sonangol, of which Isabel dos Santos was formerly Chair). Oi owns the remaining 25%.

According to research by journalist Michael Weiss, published on February 13 2018, by the US magazine Foreign Policy, the participation of General "Dino" (as he is known) in the multinational company Puma Energy International (a 15 percent shareholding) gave him a fortune of $ 750 million. Puma Energy is a subsidiary of the Swiss multinational Trafigura, considered the third largest private oil and metals dealer in the world.

Weiss also revealed that in 2010 the general paid $ 213 million for the acquisition of 18.75 percent of Puma Energy, which is valued at $ 5 billion. However, in 2011, the shares of the general dropped to 15 percent, according to documents that Weiss had access to.

In 2009 the Government privatized the state mobile operator Movicel. Among the main shareholders were Porturil (or Portmill) Investments (40%), Modus Comicare (19%), Ipang- Industria de Papel e Derivados (10%), Lambda Investment and Novatel SA.

Among the shareholders of Porturil (again according to the Michael Weiss article) are Lieutenant-Colonel Leonardo Lidinikeni, Officer of the President's Security Detail, Presidential Guard and Lieutenant Colonel Francisco Mbava, Psychological Action Department Military Bureau of the Presidency.

Among the shareholders of Modus Comicare are Lieutenant Colonel Tadeu Agostinho dos Santos Hikatala, Officer of the President's Security Detail, Presidential Guard, Lieutenant Colonel João José António Soares, Adviser to the head of the Presidential Guard, General Alfredo Tyaunda and Colonel José Luís Alves, Military Bureau of the Presidency. How do a series of middle ranking army officers have the money to invest in a company at this level?

As Weiss observes:" Ipang is the only beneficiary company that has businessmen in its shareholding structure. These are Miguel Domingos Martins and his three children, lawyer Ildeberto Manuel Teixeira and the Portuguese national José Mamade Etbal. Another businessman associated with Ipang is Spanish national Óscar Ouersagasti Soraluce. Ipang's only publicly known business activity is its shareholding participation in Movicel".

A part privatization (a 45% stake) of Angola Telecom has been announced so if things follow the form seen so far there will be shareholders who are close to Government involved.

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