contact@aopi.org Thursday - December 14,2017

Angola´s Sovereign Fund Pays US $100 Million to a Shell Company


Angola´s Sovereign Fund Pays US $100 Million to a Shell Company

On 22 January 2015, Angola's Sovereign Wealth Fund (FSDEA) transferred the sum of 9 948 750 000 kwanzas (equivalent at the time to US$100 million) to the company Kijinga S.A. This company is nothing more than a shell company set up as a front for shady transactions by Banco Kwanza Invest (BKI), a bank created by the 36-year-old José Filomeno dos Santos “Zenú”, the current chair of the FSDEA and the son of the President of the Republic. Kijinga S.A. shares an office with BKI at 150 Avenida Comandante Jika, next to the Maternity Hospital in Luanda. This address has only one business door, which opens into a small waiting room where there is a reception area and two chairs for visitors. One of these chairs is usually occupied by a security guard, in addition to the guard on duty outside the door. The windows are darkened glass, which does not allow a glimpse inside. From the waiting room all one can see is a door leading to the bank and of Kijinga S.A.

According to documents in the possession of Maka Angola, FSDEA transferred the funds already mentioned from its account at the state-owned Banco de Poupança e Crédito, to account AO06005700000014010400124, which is in the name of Kijinga S.A. at BKI. The transfer was carried out with the knowledge of the Central Bank of Angola. The transfer is identified only as the payment of a bill dated 13 January 2015.
A document from the General Tax Administration of the finance ministry, in the possession of Maka Angola and dated 5 February 2015, shows that Kijinga S.A. does not have a single employee. How can a company without a single employee provide services to the Sovereign Wealth Fund valuing nearly US $ 100 million? That is the question.

What is Kijinga S.A.?

Kijinga S.A. was legally constituted on 4 December 2012. Its formal shareholders are Pascoalina Natacha Daniel Sambo, Sendji Alexandre Vieira Dias, Mário Augusto dos Santos Mangueira, Cira Cláudia Ferreira Custódio Medrôa and Djanir de Nazaré Ferreira da Conceição (now Junqueira).Maka Angola has conducted a brief investigation into these shareholders. Pascoalina Sambo's CV states that she has served as a sub-director of the BKI legal department since July 2012. Cira Cláudia Ferreira Custódio Medrôa has been on the staff of BKI since October 2012.

According to her CV, she stared working at the bank as executive secretary and supervisor of the receptionists, and is currently the compliance officer. Djanir de Nazaré Ferreira da Conceição (now Junqueira) was also working at BKI at the time when the company was set up. Mário Augusto dos Santos Mangueira has since 2012 been a manager of the Fundo Activo de Capital de Risco (FACRA) a venture capital fund created by President José Eduardo dos Santos, through presidential decree 108/12, using public money, to support micro, small and medium-sized businesses.

FACRA's funds are exclusively managed by BKI.The chief nominal shareholder of BKI, Jean-Claude Bastos de Morais, who holds 85% of the bank's shares, is one of three members of FACRA's highest body, the Supervisory Council. FACRA's investment committee is chaired by Marcel Kruse, BKI's CEO. In 2013 BKI already held deposits from FACRA worth 6.7 billion kwanzas (US $70.5 million at the time) according to its statement of that year. In January 2015, FACRA announced that it had US $240 million available to support micro, small and medium-sized businesses.

The only individual on the list who does not appear to have any institutional links with BKI or its shareholders or managers is Sendji Alexandre Vieira Dias, who works for the state diamond company, Endiama. When contacted by Maka Angola, Mário Augusto dos Santos Mangueira denied having any relationship with BKI or with Kijinga S.A. "It is very strange that you are phoning me to ask this question," he stated. He promised to organise a meeting to discuss the matter when his schedule permitted; however, a month later he has not found the time to do so. Pascoalina Natacha Daniel Sambo explained to Maka Angola that "we [the named shareholders] transferred the ownership of our shares to Banco Kwanza the moment the company was set up".

When asked other questions about the company's activities and the fact that the figureheads are still named as the company shareholders, she referred this to the owner of the company. "The questions must be addressed to Banco Kwanza," she said. Kijinga S.A describes its role as "delivering management and support services to businesses, performing and developing all manner of studies and projects, including agricultural and industrial projects, property development, the sale, purchase and sourcing of mobile or fixed assets, general bulk or retail trade, including import and export, and, in general, the direct or indirect execution of any activities of a commercial or industrial nature allowed by the law". The company also states that it is able "to acquire or dispose of shares in companies, whether constituted here or abroad, whose aims are the same as or different from its own, as well as to associate itself with other legal persons in order to establish new companies, groups of companies, consortia."

The Fund’s reaction and the silence of BKI

Maka Angola contacted Angola’s Sovereign Wealth Fund, and received the following response from its chairman, José Filomeno dos Santos, via e-mail: “The Angolan Sovereign Fund provided the equity capital of 9.950.750.000,00 Kwanzas for a company which is focused on setting up incubators for micro-business for Angolan businesspeople. This initiative represents the first project of social integration in the country undertaken as a sustainable business enterprise.”“FSDEA has scheduled the public announcement of this investment in the coming days, in tandem with five other investments funds recently certified, which all aim for social and economic development in Angola and for the whole of sub-Saharan Africa. We invite you to refer to these imminent announcements for any additional information”, wrote José Filomeno dos Santos.

Meanwhile, all the efforts to obtain a response from BKI failed. Maka Angola went to the bank, and asked for a contact in its legal department given the unavailability of the directorship. A staff member, who introduced himself as Paulo Ngunza, explained that “the bank does not have a legal department.”Shell companies and money laundering A government jurist, who prefers to remain anonymous, commented on the non-existence of Kijinga S.A.'s staff: "If the company does not have staff, it does not exist. Even if it is in an embryonic phase of being established, even then it would have to have a number of legally established representatives, according to the type and the nature of the company."

For an international expert on money laundering, who is familiar with the Angolan banking system "there is clearly something hidden in the relationship between FSDEA, Kijinga S.A. and Banco Kwanza Invest. The company is clearly a front for the bank." 

"Banking activity should not be mixed up with other types of business at the same premise. This is something shady, which violates international standards on banking that Angola has adopted and which must be respected," the lawyer told Maka Angola.According to the same expert, "the banking sector is highly regulated. There is a likelihood that people close to the president's son, who is a politically exposed person, are carrying out money laundering activities through BKI. There must be a serious investigation into the matter."

Angola's Law to Combat Money Laundering and Terrorist Finance defines "politically exposed persons" as "all individuals who are fulfilling or who have fulfilled within the past year duties of a political or public nature, as well as close members of their families and persons with whom they are recognised as having close social or business relationships". The shady Banco Kwanza Invest In June 2012, José Filomeno dos Santos formally resigned as a board director of BKI, in which he was the main (45.33%) shareholder. He also announced he would sell his shares so as to avoid conflicts of interests with his executive role in the Sovereign Wealth Fund.

The shares were transferred to one Jean-Claude Bastos de Morais,a Swiss-Angolan national, who initially owned 39,67% BKI. Bastos de Morais thus found himself in possession of 85% of the shares in the bank. Yet BKI's reports and accounts for 2012 and 2013 make no mention of the deal.In addition to its connection with the president's son, the bank is noteworthy for the controlling interest of Jean-Claude Bastos de Morais, who is to a large extent Zenú's mentor and his business partner, and for its lack of transparency. Jean-Claude Bastos de Morais described himself as "I am a machine of ideas" in an interview with a Swiss newspaper in 2012.

He told the Handelszeitung that it had been his idea to set up FACRA and that the Minister of the Economy, Abraão Gourgel, served as a vehicle for its implementation. This is the same Abraão Gourgel who, while acting as governor of the National Bank of Angola, granted BKI management contracts worth hundreds of millions of dollars in public funds. Apparently unable to keep his mouth shut, Jean-Claude Bastos de Morais told the Swiss newspaper that he was the "brain" behind the idea of setting up Angola's Sovereign Wealth Fund.

Meanwhile, in 2013 BKI's CEO, Marcel Kruse, told Deutsche Welle that BKI had offered its management services to FACRA."We are one of 23 banks, but the only one specialised in investment banking. Our client, the Angolan state, is of the opinion that all the other banks would have conflicts of interest and that we would be the best placed to offer this service," Marcel Kruse emphasised. Although the bank has obtained hundreds of millions of dollars in Angolan state funds, the way it is managed raises many questions about the integrity of its owners and managers. For its 2011-2012 audit, the first to be made public since the bank was founded in 2008, the accountants, A. Paredes e Associados - Angola, Auditores e Consultores Lda., told the bank's management that "up until the date of this report, we have not obtained answers to a significant number of requests to confirm account balances, transfers and other information that was requested from various entities, and it was not possible to put in place effective alternative procedures with reference to the missing sums owed and owing under the headings of 'other assets', 'deposits' and 'other liabilities' as detailed below (sums owed / sums owing).

The lack of information about BKI prompted Maka Angola to enlist the help of experts in reviewing the bank's latest report and statement of accounts, dated 2013, to help readers to understand how the bank is managed. In 2013 BKI was US $225 million in debt, which with no plausible explanation was transformed into US $283 million in credit. This is in part to do with the lack of information in the report. Both the balance and the profit and loss statement are accompanied by explanatory notes that explain little or nothing. There is no information at all about the bank's organisational structure, its areas of business and the people who occupy key positions: all of this is information required by Angolan law.

The bank’s balance sheet triples from assets through “investments", and from “liabilities” through "other funds", without any explanation on what these other funds are. One suspects that they are not deposits, capital, senior debt or subordinated debt, since these categories have their own entries. The bank presents negative results that somehow lead to a positive balance. However, there is no explanation of what these "charges on the current result" are. The fundamental question is how a negative result of US $225 million (item XIX of profit & loss statement) becomes a net result for the year of US $283 million (item XX of profit & loss statement). Page 14 of the report merely offers notes on US $247 million from "creditors for goods provided". Such a substantial amount of money deserves at least a better explanation than it currently receives.BKI's chief executives, Jean-Claude Bastos de Morais (majority shareholder) and Marcel Kruse, were both convicted in the Canton of Zug on 13 July 2011 for "repeated acts of qualified criminal management".

The sovereignty of the Fund

Last year, José Filomeno dos Santos, denied publicly that the Sovereign Wealth Fund that he chairs had any business dealings with BKI. In addition to its capitalisation of US $5 billion when it began in 2012, the fund receives the value of 100,000 barrels of crude oil per day, in accordance with Presidential Decree 48/11. Dos Santos has had also to explain why Quantum Global Investment Management (QGIM) was chosen to manage US$3 billion of the Sovereign Fund's assets. According to the QGIM website, its founder and chairman is none other than Jean-Claude Bastos de Morais. This company, based in Switzerland, won Zenú's trust, it appears, because of its success in managing funds for the Central Bank of Angola.

The friendship and business relationship between José Filomeno dos Santos and Jean-Claude Bastos de Morais took off in 2007 when they both set up a number of businesses, in association with Mirco de Jesus Martins, Vice President Manuel Vicente's stepson and his figurehead in various companies. Between June and October that year, they set up five companies, Augra S.A., Benfin S.A., Benguela Development S.A., Calfisa S.A. and Sociedade de Urbanização da Graça S.A.

All these companies were set up to work mainly in Benguela province, particularly in the sectors of civil construction, trade, import and export and other "activities of a commercial or industrial nature allowed by the law."It has been a long time since José Filomeno dos Santos established himself in the business world as a fish merchant. On 20 September 1996, he registered one of his first businesses, as co-owner of the fishing and fish marketing company Staze - Captura e Comercialização de Pescado, Lda.

Source: Maka Angola

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