Find us on Google+

Thursday, 19 February 2009

RP Capital (Guest Blog - Yakima)

RP Capital rings alarm bells with me for several reasons.

First, there is only one reason to charter a Cayman Islands corporation, and that is to avoid taxes. While this may be appropriate for certain investors and in certain circumstances, it does not seem proper for a government agency attempting to ascertain the fair value of publicly owned assets to be sold to private "equity partner(s)", to trust, of all possible consultants, a company founded to avoid taxes.

Second, before anyone accuses me of tarring the RP Capital operation without knowing anything more about it than its corporate location, I find the background of the founders of the "Group" to be equally inappropriate to the task of accurately evaluating and securing full value to taxpayers of Zamtel privatisation. Rafael Berber, the Managing Partner, has his background in, get this, Structured Equity-Linked Derivatives! That's right, one of the principal architects of the current global mess (as head of Equity Structured Products Group for the Renaissance Group operating in Russia and CIS countries after serving as Head of Equity Trading at Merrill Lynch). His Partner, Petr Kellner, is the owner of PPF Group, a large Czech financial services firm, again specializing in credit and insurance.

The RP Capital Group describes itself as :

"....an alternative investment firm specialising in identifying superior intermediate and long-term investment opportunities on behalf of institutional investors and qualified high-net worth individuals. We have offices in the United Kingdom and United States.

"Our investment team has significant experience investing in regions such as Eastern Europe, the Middle East, Africa and Japan, using a wide variety of strategies. Of particular note is our unique merchant banking approach and our ability to structure a wide range of privately negotiated transactions."

Note that they do not specialize in rescuing ailing operations, nor in equity mergers between communications companies. They specialize in identifying opportunities for institutional investors and high-net worth individuals. Thus they possess no unique, desirable expertise to be applied to the Zamtel valuation which would explain the MoU signed by the Minister.

Third, we have as yet had no explanation as to how this lovely round figure of US$2 million was arrived at as an appropriate fee for the service of evaluating Zamtel's assets. Already there is indication that travel expenses and other operating costs will be bourn by the GRZ in addition to the quoted fee. How many experts are being contracted? How long would their work take? What does the hourly rate work out to be once all the costs are totaled?

The efforts by the government thus far to dismiss all questions about this deal as solely motivated by partisan politics is frankly insulting. I have never publicly endorsed any Zambian political party or candidate for office, yet I have been questioning Zamtel policy for years now. I am certainly not alone in this, and my concerns over this deal were raised by the Attorney General, not by the Post.

More questions and answers on Rafael Berber and RP Capital Group:

I don't have permission to reprint from Hedge Fund Alert, suffice it to say that they confirm that RPCG was in fact launching new hedge funds as recently as Feb 2007. By April 2008, the launch in question is described in passing as a non-contender for the EuroHedge Awards thusly, "RP Explorer, which had a very strong Sharpe and was also large enough to count, only failed to earn a nomination due to its 17% return failing to beat the median for emerging market equity funds in a very strong year for the group as a whole." There are also apparently equally underperforming regional brands, such as RP Japan Opportunities Fund, and RP Explorer Fund (Cyprus) Ltd. All of these funds show Merrill Lynch (Berber's former employer) as the principal distributor of shares.

Mr Berber also sits on the board of Atlas Estates Ltd., a service for which he has received in excess of EU$700,000 in stock grants according to their financial disclosure documents for 2006-7. The company reported an operating loss for the year, after reporting incomes slightly over 5 million euros and administrative expenses in excess of 16 million euros. Also on the board at Atlas Estates Ltd., is Mr. D. Saradhi Rajan, who is described as, "a Principal of RP Capital Group. Prior to joining RP, Mr Rajan had worked at Merrill Lynch in London and Hong Kong. Whilst in Hong Kong, he was responsible for the origination of corporate equity derivatives and private equity linked financing in South and South-East Asia. Prior to this, he worked as an investment banker at Lazard and Donaldson, Lufkin & Jenrette." Guess who bought 9.01% (as of June 11 2007) of Atlas Estates Ltd? Merrill Lynch.

Atlas Estates Ltd. "completed the acquisition of a number of corporate entities from the founder shareholders of the Group," including RP Explorer Master Fund and RP Partners Fund which received some 4.1M euros each in cash and stock in 2006. The documents go on to note that, "The RP Explorer Master Fund and RP Partners Fund are funds that are managed by R P Capital Group. The RP Capital Group is also the holder of 42.5% of the share capital of Atlas Management Company Limited."

According to reports from http://www.noalamina.org/, out of Argentina, which has tried hard to figure out who owns what in the global mining business, there may be some reason why these RP Capital people are familiar to Zambian Ministers after all. To quote a computer translation from the spanish original:

" RP Explorer Master Fund/RP MEF , is a London-based hedge fund, managed by RP Capital Partners Cayman Islands Limited . In May 2007, along with Glencore International AG , it set up an SPV "special purpose vehicle", along with three highly dubious private shareholders (Barry Steinmetz, the Gertner family and Dan Gertler), between them owning 72% of Nikanor PLC , in an attempt to buy out the company.

Nikanor PLC has a lease (though this is currently under review by the government of DRC Congo for alleged licence infringements) on what could be one of the he richest copper-cobalt deposits in Africa. The takeover failed - thanks to opposition by founding shareholders. ["Saved in the time of Nik?" London Calling, MAC website, 19/5/07].

A few months later, RP EMF stated that it was strongly opposed to a bid by a company called Camec (see Capital Group Companies ), to buy out Katanga Mining Limited - another suspect player in DR Congo, in which RP EMF had a major (15.72%) shareholding. RP EMF believed that "this unsolicited offer of Camec's shares undervalues the potential of Katanga and the quality of its assets"

The takeover was supported by a notorious 67-year-old Belgian national, George Forrest (of the Forrest Group ) – who himself held 24% of Katanga Mining [FT 8/11/2007].

The bid was probably also supported by Glencore, which had an exclusive contract to market the output from both Nikanor and Katanga's mines. An enlarged Katanga Mining could, according to the Financial Times, "become Africa's largest copper producer by 2011" - as well as "a future target for a big group such as the acquisitive Xstrata , which is 40 per cent-owned by Glencore." [FT ibid] (since reduced to 35%).

There it is, the missing link as to why these people would be trusted so by veteran cabinet ministers, they are the exact same chaps who cut all those wonderful mining deals we are all so grateful for now.

Yakima (Guest Blogger)
This piece was written as a response to Ministerial Statement : ZAMTEL and RP Capital.

Update (20/02/2009) : The Civil Society Petition to Acting Chief Justice Mambilima as reproduced in the Post.

30 comments:

  1. Yakima,

    The RP Capital Group describes itself as, "an alternative investment firm specialising in identifying superior intermediate and long-term investment opportunities on behalf of institutional investors and qualified high-net worth individuals.

    Great work.

    So let me get this straight. The government engaged, for the evaluation and sale of a parastatal, for the purposes of evalutation, an investment firm which represents high net worth individuals and institutional investors?

    Something says 'conflict of interest' to me. When they do their evalutation, who are they really representing? Not the government of Zambia. And will they do business with the persons who are going to buy ZAMTEL in any other capacity?

    RP Capital Partners Cayman Islands Limited (RP Explorer Master Fund/RP MEF) + Glencore International AG -> Nikanor PLC (72%)

    Were Nikanor or Glencore involved with the Development Agreements?

    ReplyDelete
  2. MrK,

    Glencore owns 73% of Mopani through a subsidiary.

    ReplyDelete
  3. Yakina,
    Thanks for your analysis. However, I feel we are addressing the wrong question. It is premature to start looking at the competency of RP. Doing so implies acceptance of the MoU. Our focus at the moment should be in making sure the MoU is deemed null and avoid so that a fresh approach in the privatisation of ZAMTEL is undertaken.

    The PANEL

    ReplyDelete
  4. Yakima,

    So in a way, it is Glencore which is valuing ZAMTEL through RP Capital Partners.

    After which the $2 million valuation fee seems more like a bribe than ever.

    Glencore already owns Mopani Mine, and now they want to expand into Telecommunications...

    What would they want with the nation's telecommunications company besides making money? I think this is an issue of national security.

    ReplyDelete
  5. Yakima,

    I think the Barry Steinmetz mentioned in the article is Benny Steinmetz, one of the world's largest diamond people.

    Steinmetz Diamond Group is the biggest client of De Beers (according to Forbes Magazine) - so I know they're not working for the Chinese. :)

    It seems more and more likely that 'privatisation' is nothing but a roux for the heirs of Cecil Rhodes to expand their former colonial business legally.

    So the links could run like this:

    Nikanor -> COSAF -> RP Capital Group -> Steinmetz Diamond Group -> De Beers

    Of course De Beers was founded by Cecil Rhodes himself.

    Steinmetz joins RP Capital, Glencore in Nikanor buyout: The partners will take mining company...
    Publication: Globes (Tel Aviv, Israel)
    Date: Thursday, May 17 2007

    Byline: Tali Tsipori

    May 17--Nikanor plc (AIM:NKR) has received a non-binding offer from Cosaf Ltd. to acquire the public's 28 percent stake in the company at a[currency]6 per share (the company's IPO price). If accepted Cosaf will delist Nikanor from trading.

    Cosaf is a special purpose vehicle whose shareholders are Nikanor's three main shareholders, Oakey Invest Holdings Inc. (owned by Dan Gertler), Pitchley Properties Ltd. (owned by Moshe and Mandy Gertner), and New Horizon Minerals Ltd. (owned by Benny Steinmetz), which own 72 percent of Nikanor altogeth


    Background on Benny Steinmetz from Forbes.com:

    Benny Steinmetz (from Forbes Magazine)

    Chairman of the Geneva-headquartered Steinmetz Diamond Group, the largest customer of De Beers. Like most diamond dealers, Steinmetz is moving upstream to insure a reliable supply of rough diamonds. Last year he won 11 diamond-manufacturing licenses in Botswana; he also boasts mining licenses in the Congo, Sierra Leone and Zambia (all of which pit him directly against his iconic supplier). Steinmetz also has a 37% stake in Nikanor, a holding company with copper and cobalt mining assets located in Congo, which raised $400 million in an initial public offering on London's Alternative Investment Market in July 2006.

    *******

    Interesting article:

    http://www.minesandcommunities.org/get.php?atid=5

    From Money to Metals: The Good Campaigners’ guide to Questionable Funder$ A Work in Progress
    Nostromo Research, London, 10 May 2008

    ReplyDelete
  6. Well, the very fact that this Zamtel privatisation issue has caused so much controversy over the legality, and most importantly, morality of it all, should be enough grounds for the govt to order a halt to it all and instigate a thorough investigation.

    George Kunda has pointed that the Communications Minister "acted within the provisions of the law when she signed the memorandum of understanding (MoU) with RP Capital". But surely that is not the point! Clearly there's discontent amongst the public who want to see evidence of govt being transparent over the handling of this issue.

    Hon. Dora Siliya, the key word is transparency, transparency, transparency.

    Folks, let there be freedom of information!

    ReplyDelete
  7. The PANEL,

    It was certainly not my intention to imply acceptance of the MoU! To be perfectly honest, I didn't realize that my comments would wind up compiled as a guest blog when I started them (though I am gratified that Cho thought it worthwhile to do so). Now that the matter is at least in part in the hands of the Courts, I will try to be careful not to intrude on their prerogatives as arbiter of truth.

    Once the disputed MoU was made public by the Attorney General's office, it became clear that the press in general did not have much in the way of background information on RP Capital to present to a curious public, so I started looking for it. I actually got thrown off at first, thinking that they were in fact a consultancy group which specialized in valuation of physical assets and mergers, so it was only after a fruitless search for their former clients of such services that I realized that they did not have any. When I started looking in to who owned and ran the company, and what else they had been up to, that the picture started to clear up.

    Atlas Estates Ltd. has no connection to Zambia that I know of, however it was illustrative of how Berber and Friends are used to operating. They established hedge funds, which they pushed to clients through their relationship with Merrill Lynch. They took the investment funds and bought real estate in Russia and CIS countries, which they then sold to a third company, Atlas, whose board they also control, and for which they accepted millions of euros in personal compensation. Then Merrill re-enters the picture and buys up shares of Atlas. All this might not look so bad until you consider that Merrill consistently recommended RP funds which underperformed against the market to their clients, because ultimately Merrill had a financial interest. I am not in law enforcement, so I do not know if this is technically illegal, but I agree with MrK that such deals at least appear to contain alarming conflicts of interest.

    I should make it clear that I have no evidence that RP Capital is owned or otherwise controlled by Glencore or Merrill Lynch (now Bank of America). The Argentine data simply demonstrated to me who RP had worked with and for in the past within the context of Southern Africa in general. My closing reference that, "they are the exact same chaps who cut all those wonderful mining deals we are all so grateful for now," might have been better phrased as, "they are some of the exact same chaps who have been cutting all those wonderful mining deals ..." I did not mean to imply that RP Capital had been involved in all (or indeed any specific) Zambian mining agreements, nor that mining interests are not themselves in competition with one another.

    I strongly suspect that RP Capital Group was interested in performing the valuation of Zamtel assets because they already have a specific final buyer and price in mind. The moment that they have finished their audit, their real client will miraculously tender an offer which will be justified by that same evaluation. Of course, I am cynical. However I am prepared to be proven wrong, and I welcome any representative of RP Capital who cares to present evidence to the contrary to the Zambian public. Indeed the entire problem here is about the lack of transparency in the process, combined with defensive lashing out at the media and civil society for objecting to it.

    ReplyDelete
  8. Zedian,

    From the Lusaka Times:

    Acting Chief Justice to set up a tribunal to probe Siliya
    February 19, 2009

    Acting Chief Justice, Ireen Mambilima, is to set up a tribunal to probe the awarding of contracts to two foreign firms by Transport and Communications Minister, Dora Siliya.

    More...

    Yakima,

    Another question: what would diamond people and miners want to do with the national telecommunications company?

    The whole notion of privatisation is that somehow private companies can run businesses better than the state can. However, where is the proof? Parastatals can be badly run, and they can be inefficient, but you don't usually see the massive corruption as with ENRON and the California energy crisis. State monopolies can be broken up, and either be given a part of the country as their territory, or be devolved to sub-national governments - provinces or districts.

    And how is ZAMTEL ownership by De Beers or miners and diamond traders any better than the current state ownership?

    What justification is there for any privatisation at all?

    Just thinking out loud.

    ReplyDelete
  9. RP Capital is an investor in Wimax Telecom - maybe that also explains their interest - get Zambia Wimaxxed. The wimax site has the following info:

    The founders of WiMAX are Dov Bar-Gera and Werner Kastzler. The project is co-funded by InCentive Private Equity Holding AG, Switzerland and RP Capital Group, UK. Ms. Anat Bar-Gera is responsible for the financial advice.

    Incentive Asset management is an investment company focused on private equity and hedge funds. Its founder and CEO, Rene Braginsky, is a well known investor in Switzerland through very successful M&A transactions. Among others, Incentive realized a handsome exit in 2003, by selling Centerpulse, a leading med-tech company, to the US med-tech concern Zimmer.

    RP Explorer Fund is an emerging markets fund that focuses on Eastern Europe and certain countries in the Middle East and Africa. The Fund employs strategies across multiple asset classes investing in both actively-traded, liquid securities and privately-negotiated structured transactions and private equity.

    RP Capital Group is a London-based investment firm founded by Rafael Berber and Petr Kellner in 2004. Mr. Berber formerly served as Vice Chairman of Global Capital Markets & Financing and the Global Head of the Equity-Linked Products Group at Merrill Lynch. Mr. Kellner is the owner of PPF Group, the largest private financial company in the Czech Republic with assets of $7 billion.

    RP Capital Group is a London-based investment firm founded by Rafael Berber and Petr Kellner in July 2004. Mr. Berber formerly served as Vice Chairman of Global Capital Markets & Financing and the Global Head of the Equity-Linked Products Group at Merrill Lynch, where he spent 16 years spearheading the development of the firm's equity derivatives and emerging markets franchise. Mr. Kellner is the owner of PPF Group, the largest private financial company in the Czech Republic with assets of $7 billion. RP Capital has 12 investment professionals with extensive experience in trading, structuring and private equity investment. Including two additional advisors, the team has a total of 175 years of related experience.

    The Fund was launched in September 2004 and currently has approximately $175 million under management. Since inception, the Fund has generated annualized returns of +11.27% net of fees.

    ReplyDelete
  10. MrK,

    Other than the alleged collusion in the failed DRC copper mining takeover bid, I do not know of any direct connection between RP Capital and DeBeers (if it is even the same Steinmetz, it is a big world) or any other diamond mining companies. Of course they are a private investment company which is not required to disclose who has invested with them nor how much, so it is conceivable that they do manage assets for individuals with substantial mining interests, but I have zero actual evidence of that. The Courts have asked that now that the matter is formally under investigation, those of us in the wider community refrain from making accusations, a request which I find to be totally reasonable and warranted. If anyone feels that they have evidence or testimony relevant to the case, I strongly urge them to bring it to the attention of the investigating entity.

    That said, I feel it is entirely fair to speculate as to the future direction of Zamtel policy in light of recent developments, and to seek answers in that regard. The Wimax Telecom involvement line of speculation is one such case in point, and all things considered a likely enough potential partner to RP Capital as any other, therefore worth exploring. Even if we rule them out, it will help to better define our speculative criteria.

    One thing that seems clear, RP Capital are traders in companies, middlemen, not builders of emerging companies or rescuers of distressed companies. Minister Silaya has indicated that there were several companies which came forward with interest in acquisition of a majority stake in Zamtel, anyone know which specific companies were on that list? Was Wimex one of them prior to RP Capital arriving and displaying interest in valuing Zamtel assets?

    Also, privatised or not, Zamtel is bleeding cash by the day, and only getting worse. Minister Silaya is absolutely correct on that score (though I am still not clear how much of Zamtel's declared debt is in fact unpaid bills from government ministries), and delay in recapitalization and restructuring is costing the taxpayers money. As to the ideal means by which to achieve restructuring, well I went on record with Cho advocating a partial privatisation plan some months ago, and the Ministry decided to go another direction. I am still re-evaluating whether the model is still viable under the current circumstance.

    ReplyDelete
  11. Petr Kellner is currently the richest Czech business man and owner of PPF Holding (JV with Generali) and PPF Investments

    A link with the investments of PPF can be found at
    http://www.invest-iq.com/PPF-Investments

    ReplyDelete
  12. Yakima,

    Can you drop me a quick email....preferably from a pseudo gmail account...??

    I have someone who wants an email exchange..don't worry its not Justice Mambilima..

    lol!!

    Thanks,

    MrK,

    I notice that the Post has gone down? How is your access?

    ReplyDelete
  13. Hi Cho,

    I have no problem accessing the website this afternoon.

    They are carrying an article stating the Rupiah Banda goverment is gunning for The Post and specifically Fred M'Membe and Mutembo Nchito.

    (I extremely rarely republish any article this soon, but just in case The Post suddenly disappears from cyberspace, everyone will know why.)

    ReplyDelete
  14. Yakima,

    Other than the alleged collusion in the failed DRC copper mining takeover bid, I do not know of any direct connection between RP Capital and DeBeers (if it is even the same Steinmetz, it is a big world) or any other diamond mining companies.

    I quote from the article you quoted:

    In May 2007, along with Glencore International AG , it set up an SPV "special purpose vehicle", along with three highly dubious private shareholders (Barry Steinmetz, the Gertner family and Dan Gertler), between them owning 72% of Nikanor PLC , in an attempt to buy out the company.

    I think the first article got the name Benny Steinmetz wrong and called him Barry Steinmetz.

    Unless there are 2 Steinmetzes who control 72% of Nikanor PLC, and 2 special vehicles that bid on Nikanor PLC.

    Cosaf is a special purpose vehicle whose shareholders are Nikanor's three main shareholders, Oakey Invest Holdings Inc. (owned by Dan Gertler), Pitchley Properties Ltd. (owned by Moshe and Mandy Gertner), and New Horizon Minerals Ltd. (owned by Benny Steinmetz), which own 72 percent of Nikanor

    'Barry Steinmetz' is Benny Steinmetz of Steinmetz Diamond Group, owner of New Horizon Minerals Limited, which created a Special Vehicle called Cosaf, which successfully bid on Nikanor PLC.

    Steinmetz Diamond Group is one of the biggest clients of De Beers, founded by Cecil Rhodes.

    Which is also a joint owner of DEBSWANA, which handle all the diamonds in Botswana, origin of about 90% of the world's diamonds.

    I'm still wondering what diamond miners and dealers want with Zambia's telecommunications company. Other than own more of the country.

    ReplyDelete
  15. MrK,

    Right. We do know that RP Capital took the same side as Glencore and certain private investors including Steinmetz and Gertner with regard to the Nikanor PLC deal in the DRC in 2007. What we do not know is if Glencore and the others had anything whatsoever to do with the Zamtel MoU negotiations in 2008. RP Capital was involved in both, but there is zero hard evidence to connect Glencore or Steinmetz or Gertner or others involved in DRC deals with the Zamtel circumstance. There is as far as the evidence demonstrates no direct connection between the two negotiated deals other than RP Capital being a party to both. Given that the Zamtel negotiation is now a matter before the courts, I feel it is important not to give the impression that I am in possession of any actual evidence of collusion by mining interests with RP Capital in the Zamtel case. I used RP Capital's prior involvement with regional mining and Eastern European real estate deals as examples of how they typically do business, not as a declaration of evidence of collusion in the Zamtel or indeed any other circumstance involving the GRZ. I would not be surprised if these entities are still working together, but I have no actual direct evidence of that, which becomes important once the case leaves the realm of speculation and enters the realm of Court established fact. I appreciate your sentiments, even agree with them for the most part, but this is no longer about my opinion but about proof sufficient for a Court of Law.

    ReplyDelete
  16. It appears to me more and more, that exposing Zambia's parastatals to 'foreign capital' through privatisation is just another route to re-colonisation. It is time that the government owned up to it's obligation to run these companies well themselves, because those with capital seem to be the usual suspects that the founders of the country fought so hard to get rid of. Instead of simply being appraisers of assets, the Gertners, Gertlers and Steinmetzes are deeply involved in the exploitation of diamonds in the DRC, lawbreaking and probably the assasination of Laurent Kabila senior. And likely involved with the shenanigans of Laurent Nkunda/Paul Kagame in the eastern DRC.

    From the same article:

    Emaxon Finance International is a real gem, one of these octopuses of mining tangled up with interlocking companies and subsidiaries based in specious geographical offshore “tax havens” that work to shield from prosecution people who are responsible for money laundering, weapons and drugs operations, assassinations and other terrorism.

    NIKANOR is registered as an Isle of Man (UK) company, an offshore tax haven that helps to conceal criminal activities and maximize profits. NIKANOR directors include Dan Kurtzer, former U.S. ambassador to Israel (2001-2005) and Principal Deputy Assistant Secretary of State for Intelligence and Research under Madeleine Albright. NIKANOR partners include Mende and Moshe Gertner [sic], Israeli property tycoons with vast holdings in London who control 22 percent of NIKANOR. Another partner is Israeli-born Nir Livnat, managing director of Johannesburg-based Ascot Diamonds, a member of the Steinmetz Group of Diamond Companies, and a principal involved in numerous U.S.-based businesses from Miami to New York. [31]

    Dan Gertler is close to Israeli politicians, especially Avigdor Lieberman, head of the right-wing Yisrael Beiteinu party, and he is very close to diamantaire Beny Steinmetz, a good friend of Prime Minister Ehud Olmert. Gertler’s inseperable friend, Chaim Leibovitz, is also very close to Lieberman, and was “a regular fixture” in Prime Minister Benjamin Netanyahu’s offices. [38]

    Beny Steinmetz is considered to be one of the richest billionaires in Israel. The Steinmetz Group, controlled with his brother Daniel, is one of the biggest clients of the de Beers diamond syndicate. Steinmetz is also involved in an Israeli real estate group that purchased the assets of the British Haslemere real estate company for $1.46 billion. Steinmetz’s real estate partners include the billionaire Israeli investors David and Simon Reuben, and the Saudi Arabian Olayan Group, an investment company that is deeply connected with Bechtel Corporation. [39] The Steinmetz web site map of operations hides their involvement in war-torn Congo. [40]




    The Israeli-American enterprises of the Gertler/Steinmetz gang have proliferated and today are major shareholders or owners of diamond concessions in Congo’s Kasai province and copperbelt concessions in Katanga. The copperbelt is the big money in Congo. Copper prices recently hit an all time high due to monopoly control by corporations and new applications in transportation, aerospace and weaponry. Cobalt is used in dye and paint processes for manufacturing. More importantly, it is elemental to superalloys used for tank armor, spacecraft, turbines, ship hulls, ship hulls, blast furnaces, refineries, petroleum drilling rigs, nuclear reactors and nuclear weapons. Like coltan, or columbium-tantalite, cobalt is also used in cell phone batteries. The Katanga copperbelt is also rich in germanium, a rare metal used in optical fibers, infrared lenses and telecommunication satellites. [49]

    The entire military-industrial-prisons complex revolves around minerals like cobalt, niobium and heterogenite (cobalt oxide), yet the truth about what happens to African people in lands taken over by these mining companies is hidden by the corporate media. More and more land is being stolen, more and more atrocities committed, with less and less transparency, and less and less accountability, and fewer and fewer voices for the voiceless. And, as usual, there are always a lot of empty promises.


    THOUGH SHALT HAVE NO OTHER GODS

    Over the past fifty years, elite Israeli nationals have perpetrated conflict and injustice in Africa, fueled by and for minerals. Operatives associated with the Israeli military or intelligence services——the Mossad——maintain strategic criminal syndicates in competition and in partnership with other syndicates involving men like Philippe De Moerloose, Louis Michel, Viscount Etienne Davignon, John Bredenkamp and Tony Buckingham.

    Israeli trained shock troops became Mobutu’s bodyguards, with Mossad advisers. According to a report by the American Jewish Committee: after 1980 “Mossad agents, military emissaries, and a small group of private businessmen… replaced diplomats as Israel’s main interlocutors with African leaders and political (mainly opposition) groups.” The report cites rising involvement of private defense and security interests, especially in Angola, DRC and Central Africa Republic, since 1992. [50]

    Retired Israeli Defense Forces Colonel Yair Klein reportedly organized arms for diamonds networks in Sierra Leone and Liberia after President Charles Taylor was deposed. In 1999 Klein was arrested in Sierra Leone on charges of smuggling arms to the rebel Revolutionary United Front. [54] The U.N. also documented collaborations between Sierra Leone’ rebels and Lazare Kaplan agent Damian Gagnon; Lazare Kaplan International is one of the organized crime syndicates of Belgian-American Maurice Templesman. [55]

    The Steinmetz Group of companies are also involved in the bloody diamond fields of Sierra Leone, along with Energem (formerly DiamondWorks), the company described above that is connected to the white mercenaries depicted in Hollywood’s Blood Diamond propaganda film.[56] In December 2007, local people in Sierra Leone struggling to gain the smallest livelihood from their own resources were shot by police during peaceful protests against the Steinmetz-controlled Koidu Holdings site. It’s the same old local people’s story, happening everywhere. These were people from communities driven off their own land by mining companies that promised the world, cajoled the trusting people, and gave nothing after. The Steinmetz gang called in the local paramilitary, a curfew was imposed and people were shot; the police, as usual, falsely claimed that protesters were armed. [57]


    Like most mining mafias in Africa, the Israeli octopus——organized crime syndicates, offshore subsidiaries, interlocking directorships and affiliated mercenaries——has gripped the very heart of Congo like an octopus grips and stuns its prey. Mining regulates the pulse of Congo, and foreign mining companies with their black sell—out agents are sucking the blood out of the people and the wealth out of the land.

    When Gertler and Steinmetz and their buddies came to Congo it was soon clear that they had to challenge Zimbabwean tycoons John Bredenkamp and Billy Rautenbach——two cronies of dictator Robert Mugabe involved in pillaging Congo and Zimbabwe for decades. The United Nations Panel of Experts on DRC named both men for plundering copper and cobalt from Katanga, and both deal globally in weapons. Bredenkamp is one of the fifty richest men in England and he reportedly owns a mansion several doors down from Margaret Thatcher’s residence in London.

    On November 7, 2007 it was reported that Dan Gertler was instrumental in putting together a deal in which Katanga Mining Ltd. would buy rival NIKANOR for $2.1 billion and merge their adjacent mine projects in Congo to form the world’s largest cobalt company. Also announced was a joint venture between the Central African Mining & Exploration Company (CAMEC) and another Gertler-controlled firm called Prairie International Limited.

    The CAMEC/Prairie joint venture will exploit DRC’s Luita copper processing facility, develop the Mukondo Mountain cobalt mine——called the world's richest cobalt mine——and work on “other” exploration properties. Prairie is majority owned by the family of Dan Gertler. CAMEC is connected to Zimbabwean/South African/British tycoon Billy Rautenbach. [62] The DRC government effectively banned controversial Zimbabwean businessman Billy Rautenbach from the country by declaring him persona non grata in July 2007, but this doesn’t seem to stop him from getting what he wants. Rautenbach is also wanted in South Africa on 300 charges of fraud, corruption and theft.

    Billy Rautenbach is a former motor car rally driver who controls a business empire in Southern and Central Africa through a British Virgin Islands company called Ridgepoint Overseas Development Limited. In 1998, the short-lived President of Congo, Laurent Kabila, named Rautenbach the managing director of La Générale des Carrières et des Mines (Gécamines), one of Africa's biggest cobalt mines, the Katanga properties of the Union Miniere de Haut Katanga formerly developed by the Belgian colonial government. Rautenbach today is one of the Africa's largest exporters of heterogenite (cobalt ore) from the DRC through his Congo Cobalt Company (CoCoCo), but he also has shares in two other lucrative DRC mining firms——Boss and Mukondo——which reportedly earn over US$100 million a month. [63]

    While there has been a lot of Western media fanfare over the Kabila governments’ supposed “independent” review of mining contracts, little substantive change can be expected. [64] Structural factors exploit the Congolese people and lands and benefit white businessmen, arms dealers, bankers, and their embraceable black agents. Big business benefits from perception management articles well-placed in media to give the impression that the international system is just, that there are watchdogs, checks and balances.

    However, while the DRC and the World Bank present a propaganda front about their ostensible attention to mining reform and the new mining code, NIKANOR——Mining Journal reports—— “is in the advantageous position of having entered into a post mining-code contract, ‘which makes us [NIKANOR] relatively comfortable’” [65] In other words, the mining review is a sham, it may force some changes, but it will be cosmetic at best.

    Dan Gertler and the Steinmetz Group’s partner Jewish-American Nir Livnat is also a director of Anglovaal Mining with Rick and Brian Menell and Basil Hersov of the South African Menell and Hersov dynasties. [66] Hersov has been named as a beneficiary of fraud and racketeering involving British BAE Systems weapons deals with shady offshore companies. [67]


    THOU SHALT NOT RAPE AND PLUNDER

    Gertler/Steinmetz interests have also been jostling for copper and cobalt concessions with Kinross-Forrest Group. Gertler has bought up or invested heavily in companies just to close them down. George Forrest also made the UN hit list of Congo’s looters and Forrest and his three sons helped bankroll Joseph Kabila’s 2006 election “victory”. [76] George Forrest’s daughter is reportedly married to the son of Louis Michel. Malta and George Forrest are controlling directors in Katanga Mining Limited.

    Workers and communities in and around these mines suffer all the standard treatable maladies (typhoid, malaria, tetanus, polio, malnutrition) as well. However, such stories are off the agenda for the North American, European, Japanese, Australian and Israeli media corporations providing the mainstay of English language indoctrination meant to instill racial superiority and a vast ignorance and obliviousness that leaves westerns populations shaking their heads and wringing their hands and clicking their tongues, while all the while wondering “what is to be done?” It does not cross people’s minds that their own hands are dirty, that their own consciousness has been falsified, as all the raw materials from Congo enrich the lives of people in the United States, Canada, Europe and Israel.

    ReplyDelete
  17. MrK,

    It is time that the government owned up to it's obligation to run these companies well themselves, because those with capital seem to be the usual suspects that the founders of the country fought so hard to get rid of.

    While I'm of the opinion that privatisation is the way to go for certain businesses that don't form the core part of govt functions, there's an element of your statement that I agree with. And that is that in running to privatise, govt is treating the symptoms and not necessarily the cause of the problem.

    And the real cause of the problem is incompetence, not lack of funds.

    However, in support of privatisation, now that we are where we are, I think private ownerships is more responsive to market trends, including competition, technology, and specific customer needs. Govt run entities are usually not known for responsiveness.

    ReplyDelete
  18. Yakima,

    What we do not know is if Glencore and the others had anything whatsoever to do with the Zamtel MoU negotiations in 2008. RP Capital was involved in both, but there is zero hard evidence to connect Glencore or Steinmetz or Gertner or others involved in DRC deals with the Zamtel circumstance.

    I think RP Capital links run to Dan Gertler:

    One of the largest investors in RP Capital’s funds is Dan Gertler, an Israeli businessman who first made his fortune in diamond dealing but has since diversified into mining.

    Mr Gertler was one of the founders of Nikanor with Beny Steinmetz, a billionaire diamond dealer, and Israel’s Gertner family.

    RP Capital is also the largest shareholder in Nikanor and for some time has been pushing for a merger between Nikanor and Katanga Mining. But a clash of personalities between Mr Forrest and Mr Gertler got in the way.


    More on RP Capital's operations, from Nikanor's UK website:

    50 million of the new shares were issued to the diversified natural resources company Glencore, 50% of which were bought on behalf of Ruwenzori Limited (“Ruwenzori”), a special purpose vehicle managed by RP Capital. Approximately 4.8 million shares were issued to certain of Nikanor’s founding shareholders, and approximately 11.9 million shares were issued to other participating institutions. The overall free float fell slightly from 28% prior to the placement to 25% after.

    So RP capital manages Ruwenzori Ltd, another company that invests in mining in the DRC.

    RP Capital is also 'a main shareholder' in Katanga Mining:

    Katanga Mining's main shareholders include Arthur Ditto, Tain Holdings Ltd., George Forrest, and RP Capital Entities. All these shareholders of both companies voted in favor of the merger.

    Also, this article indicates that it is Dan Gertler who is behind RP Captial:

    Beyond the unresolved Mukondo issue, Gertler is also now knocking heads with Camec over Katanga Mining. Late last month, RP Explorer Master Fund (RPEMF) said it had purchased some 6% of Katanga Mining, taking its total stake to 15.7% in Katanga Mining. The latest RPEMF transaction manifests the interest, directly or indirectly, of Gertler in Katanga Mining, via RP Capital Partners Cayman Islands.

    And to add this 'rumour' by South African rival Billy Rautenbach:

    Rautenbach also directly named his key "enemy," by stating that he believes the current "dispute relates to Dan Gertler of RP Capital". RP Capital is in fact a manager of hedge funds, and while Gertler may have invested in certain underlying RP Capital funds, he is certainly not "of RP Capital".

    Notwithstanding the editorializing by the writer, certainly Rautenbach believes that Dan Gertler is behind RP Capital.

    Interesting quote:

    Camec's bid for Katanga also faces some significant obstacles. RP Capital, which has a stake of 15.7 per cent in Katanga, opposes the deal and wants the company to merge with Nikanor, another Aim-listed group with assets in the DRC. "As a large shareholder in Katanga and across the DRC mining space, this isn't the combination we prefer. We are doing everything we can to effect the combination of Nikanor and Katanga," says an RP Capital spokesman.

    Yakima, I think you are right and they already have a large client in mind - themselves.

    That would mean that they are in fact going to value the price of the company they are going to buy.

    So the question is - why hasn't the GRZ done it's own valuation of ZAMTEL?

    ReplyDelete
  19. MrK,

    Nice work! The fabric is definitely starting to weave together. I am very curious about these DRC "sales" that sometimes seem to involve little or no cash. Here's a bit more about Katanga for you.

    From: A forensic examination of the factors contributing to the failure of Camec’s bid for Katanga Mining.
    Author: Barry Sergeant, Tuesday , 18 Sep 2007


    Osleg, the mechanism whereby the Zimbabwe government was supposed to recoup the cost of its military intervention in the DRC through exploitation of a series of commercial concessions, mostly in the DRC mining sector, ended in disaster. By the time the Zimbabwe Defence Force eventually withdrew in 2003, it was patently clear that Zimbabwe's exchequer had benefited little, while senior political figures in ZANU-PF and senior Zimbabwe military officers had made vast fortunes. Rautenbach was one of the key conduits, as outlined by the UN in its series of Panel of Experts Reports on the Illegal Exploitation of Natural Resources and Other Forms of Wealth in the DRC. Rautenbach and others were players in an "elite network" of corrupt politicians, military commanders and shady businessmen that organised the transfer of billions of dollars of state assets to private companies with no compensation or direct revenue benefit accruing to the state treasuries of either the DRC or Zimbabwe.

    Consider that against this background, Camec sought, and succeeded, no matter how briefly, in achieving a degree of legitimacy for the Rautenbach assets by their inclusion in a listing of the AIM division of the London Stock Exchange. But consider also, the ruthless hedge funds who sold out Katanga Mining shares to Camec, ahead of Camec's official bid for the rest of Katanga Mining.

    On April 27 this year, Camec bought 1.6m Katanga Mining shares from P. Schoenfeld Asset Management LLC, for C$8m, and 11.9m Camec shares. On May 4, Camec bought 224,612 Katanga Mining shares from CASAM Pendragon Event Value Fund Limited, for 2.8m Camec shares; 5.6m Katanga Mining shares from North Sound Capital LLC, for $23.5m and 44.6m Camec shares; 1.1m Katanga Mining shares from Pendragon (Master) Fund Limited, for 14m Camec shares; 995,500 Katanga Mining shares from Amber Master Fund (Cayman) SPC, for 12.6m Camec shares; 131 130 Katanga Mining shares from The Matterhorn Resources and Energy Fund, for 1.7m Camec shares, and 229,170 Katanga Mining shares from The Wildhorn Master Fund, for 2.9m Camec shares.

    ReplyDelete
  20. I have been wondering why Gertler would want to buy ZAMTEL. However, they could be in it for nothing more complicated that asset stripping.

    They certainly have no experience in running a telecommunications company.

    ReplyDelete
  21. Well if by collusion the absolute value of Zamtel assets can be undervalued by RP Capital, then the acquisition of Zamtel assets becomes a hedge against the riskier investments (ie mining) being undertaken. Chances are in such a case that they have no intention of running the telecom company, rather to sell or leverage their investment for further gain. I would certainly hope that any investor who expresses interest in recapitalizing Zamtel turns up with actual cash in hand, and not some fictional stock swap which is how these people seem to acquire otherwise "real" assets. Somehow they are able to persuade people that doing business with them in the future is going to pay off. That is exactly the impression we need to combat.

    If you have so much as had lunch with any of these individuals you should be barred from doing business in Zambia or exporting your minerals through Zambian territory. That would stop them cold (or at least force them to use more expensive air transport options, which works for tin or tantalum, but not for copper or cobalt, due to volume). The only decent rail lines are through Zambia. We have the power to stop these people.

    ReplyDelete
  22. Well if by collusion the absolute value of Zamtel assets can be undervalued by RP Capital, then the acquisition of Zamtel assets becomes a hedge against the riskier investments (ie mining) being undertaken.

    What I have not read, is whether the GRZ has done it's own evaluation of ZAMTEL.

    Maybe they don't care, and are privatising for the sake of privatisation, at all costs, and let the buyer determine the price.

    All I read in minister Siliya's statement is why they want to get rid of ZAMTEL. Maybe that is just what they are doing, get Zambia's resources into any private hands, no matter whose.

    The only decent rail lines are through Zambia. We have the power to stop these people.

    The more I read about the DRC, the more I think it is possible that these individuals are trying to un-develop Africa, as a business strategy and powerplay. Their holdings in the DRC are run in the most exploitative and destructive way imaginable. More like Gulags than anything else.

    Gertler’s Bling Bang Torah Gang
    Israel and the Ongoing Holocaust in Congo (Part 1)
    by Keith Harmon Snow / February 9th, 2008

    A look at the Democratic Republic of the Congo (DRC) (3)
    Keith Harmon Snow on labour conditions in the DRC and part 4

    A look at the Democratic Republic of the Congo (DRC) (5)
    On how Dan Gertler displaced Maurice Tempelsman

    A look at the Democratic Republic of the Congo (DRC) (6)
    More on the controversy between Maurice Tempelsman and Dan Gertler, and the fraud of the movie "Blood Diamonnds" and the 'Kimberley Process'.

    ReplyDelete
  23. MrK,

    Well theoretically the whole RP Capital situation arose out of a decision by the Ministry to outsource the valuation of ZAMTEL assets prior to accepting offers from prospective "equity partners". That's the MoU under dispute, US$2 million + expenses to "value the assets" on behalf of the GRZ, so that they have a firm footing from which to negotiate a fair deal for the taxpayers. In theory. The practice has been unraveling into something far different.

    Fascinating links, I guess its modern data mining vs. manual ore mining. Keep shining light at them, hopefully more people will start to notice.

    ReplyDelete
  24. According to today's POST, the valuation is almost complete (75%). A Zambian surveyor is quoted in the article saying the law does not permit RP to conduct the valuation without Zambian registered surveyors.
    By the time the tribunal is set up, GRZ would have paid RP $2M and they will be out of the country. The whole thing needs to be put on hold until the outcome of the tribunal is known.

    The PANEL

    ReplyDelete
  25. From the corporate website of the DGI Group of Companies, here's what Mr Gertler wants us to think of him:

    Dan Gertler – Founder and President

    Founder of the DGI Group of Companies, Dan Gertler is a leader in the development of natural resources. His career began with investments in the diamond trade in Africa, and his interests have since grown to include mining, logistics, real estate, agriculture and finance in Africa and other emerging markets.

    Born in December 1973, Dan Gertler is the grandson of Moshe Schnitzer, who was the founder and first President of the Israeli Diamond Exchange and 2004 winner of the Israel Prize (the most prestigious award issued by the State of Israel) for lifetime achievement in recognition of his contribution to Israeli society and the State.

    Mr. Schnitzer was known to have encouraged his children (and grandchildren) to develop their own business enterprises, whether within or outside the diamond industry, and made family resources available for such purposes. It was within this family tradition of free and independent initiatives based on strong family backing and influence that Mr. Gertler was raised. Not only did he gain the courage and vision for his own ventures, but also the seed resources required to achieve that vision.

    An enthusiastic diamond-dealer from youth, Mr. Gertler learned the secrets of the trade not only from his father but also from his grandfather’s life-long experience. He spent time with both of them during school holidays and whenever else he was able. Even while carrying out his three-year mandatory service in a rearguard base of the Israeli Defense Forces (IDF) near Tel Aviv, all of his free time was spent either at the offices of his father or grandfather, learning and practicing the essentials of the diamond business.

    Immediately following his mandatory service in the IDF, Mr. Gertler, then aged 21, went about opening his own diamond business. Naturally, his family provided him with an extensive infrastructure of contacts, goodwill and finance.

    Since his financial backing provided him with the ability to purchase substantial amounts of stocks up-front, he soon made a name for himself as a reliable source of various types, sizes and qualities of diamonds. In turn, this key quality of ‘reliability’ enabled him to develop a large downstream clientele. Mr. Gertler’s deep knowledge of the industry gave him strength in finding the appropriate type of diamonds for clients, and together with the other factors mentioned, Mr. Gertler became able to sustain a long-term diamond dealership.

    Mr. Gertler recognized, however, that no matter how good a dealership is, due to its dependence on various sources, it would always be exposed to risks of unsteady supply and it, therefore, carried an uncertain future. He believed that the closer one was able to get to the source – to the mine itself or at least to the miners – the better one’s chances of success in this ever-fluctuating and capital-intense market. This, therefore, became his renewed focus. Following experiments with the purchase and marketing of artisinally mined diamonds in the Democratic Republic of the Congo, DGI established a partnership with the majority state-owned diamond mine MIBA.

    The DRC was deemed to be an extremely high risk and volatile country, torn by civil war and absent of large international investments. Following political changes in the summer of 2001, the already volatile situation became even more unsteady. Shortly after the appointment by the state council of the late president’s son, Mr. Joseph Kabila, as the new president of DRC, Mr. Gertler pledged his commitment to assist the DRC through its most difficult period. His decision to commit a substantial part of his wealth in the DRC was made at a time when very few, if any, business people shared such a commitment.

    Mr. Gertler’s record in the DRC not only gives him a unique view and understanding of its authorities and infrastructure, but also earned him the trust and goodwill required to build business interests of the magnitude that he has. Mr. Gertler was named honorary consul of the DRC in Israel in April 2003.

    Today, Mr. Gertler maintains his diamond activities – located in and managed from his offices in Tel Aviv – and is involved in a number of other projects in Africa and other locations around the world. As he has great faith in the potential of emerging markets, he is also pursuing investments in Angola, East Europe, Brazil, and elsewhere.

    Mr. Gertler studied business at the University of Derby and financial markets and gemology in Israel.

    Mr. Gertler strictly observes the Jewish religion. He supports many and various educational and charitable institutions, most of them anonymously.

    * Copyright 2007 DGI Group

    ReplyDelete
  26. Yakima,

    More on Dan Gertler's dealings in the DRC.

    Dan Gertler, Merchant of Death

    There is an interesting thread at the Lusaka Times too about the privatisation of ZAMTEL.

    ReplyDelete
  27. siliya is a suicide bomber on the zambian soil

    ReplyDelete
  28. Well guess who owns LCM - it is Nikanor PLC co-owners Beny Steinmetz of the Beny Steinmetz Group (BSG):

    Govt closes bidding process for LCM
    Written by Chiwoyu Sinyangwe
    Thursday, April 16, 2009 2:37:03 PM

    THE government yesterday closed the bidding process for the takeover of operations at Luanshya Copper Mines (LCM) which is expected to resume operations this June, sources have disclosed. Mines minister Maxwell Mwale was not readily available for comment on the matter.

    But according to sources within the ministry, LCM which was closed and placed under care and maintenance last December by its former owners - Switzerland-based International Mineral Resources AG and Bein Stein Group Resources of Israel would be reopened by June this year.

    *******

    That would be the Beny Steinmetz Group or BSG - MrK

    ReplyDelete
  29. An alternative investment firm specialising in identifying superior intermediate and long-term investment opportunities on behalf of institutional investors and qualified high-net worth individuals.
    ______________
    Mary

    ReplyDelete
  30. RP Capital Group is a privately owned hedge sponsor. The firm provides its services to pooled investment vehicles, institutional investors, and high-net worth individuals. It invests in the public equity and alternative markets across the globe.

    ReplyDelete

All contributors should follow the basic principles of a productive dialogue: communicate their perspective, ask, comment, respond,and share information and knowledge, but do all this with a positive approach.

This is a friendly website. However, if you feel compelled to comment 'anonymously', you are strongly encouraged to state your location / adopt a unique nick name so that other commentators/readers do not confuse your comments with other individuals also commenting anonymously.