Manuel Vicente, chair and director-general of Angolan state oil company Sonangol, had the distinction in 2008 of doing a business deal with himself in taking a percentage of Sonangol Holdings in his own name, writes Rafael Marques de Morais. This was an act in direct contravention of the country's 'Law on Public Probity', Marques de Morais stresses.
In 2008, Manuel Vicente, the chair of the board and director-general of the Angolan state oil company Sonangol, restructured the company and its main subsidiaries for his personal benefit.
The same year, petroleum exports exceeded US$62 billion, according to the World Bank, which accounted for 97.7 per cent of Angola’s exports. These figures demonstrate the crucial role of Sonangol in the country’s political economy as the only Angolan concession-holder in the industry.
Manuel Vicente did a business deal with himself when he illegally transferred a percentage of Sonangol Holdings into his own name, thus making himself a formal (private) shareholder in virtually all the multi-million dollar deals of the state-owned business. This action by the chair of Sonangol must first be put into context in the light of current legislation and the ruling MPLA’s (Popular Movement for the Liberation of Angola) rhetoric on the supposed zero-tolerance policy towards corruption. Manuel Vicente is a member of MPLA’s politburo.
On 25 March 2010, the President of the Republic José Eduardo dos Santos signed into force the 'Law on Public Probity', which is intended to combat corruption. Basically, this new law brings together provisions that are scattered among various laws, including the 'Law on Crimes Committed by Public Office Bearers' (Law 21/90), the 'Law on State Discipline' (Law 22/90), and the 'Law on the Patrimonial Benefits of Public Officials' (Decree 24/90). These laws in themselves ought to have been enough to stop the large-scale looting of public assets by political leaders and public officials.
Still, through its outright control of the judicial system, the MPLA ensures that these laws are never enforced. So it would be wrong to see the new law as demonstrating the 35-year-old regime’s commitment to separating public interests from the private interests of its leaders. However, citizens need to advocate for the laws to be implemented, and demand that their leaders give account of how public money and assets are managed.
On 24 July 2008, Manuel Vicente restructured Sonangol’s charter and completely changed Sonangol Holdings’ social pact, and transferred 1 per cent of the shareholding that had previously been solely owned by the state company to his name.
Sonangol Holdings Ltd is a subsidiary of Sonangol that was created in 2004. Its current social objective is 'to carry out commercial and industrial activities, to manage the share portfolio itself, and to provide technical and administrative services to the designated companies'. Sonangol Holdings also holds shares in other companies. In fact, Sonangol Holdings controls the group’s subsidiaries.
As part of the restructuring process, Manuel Vicente arranged his own private participation in the main subsidiaries of the country’s largest public enterprise, as follows:
- On 23 July 2008, Sonangol transferred to Sonangol Holdings 10 per cent of its shares in Sonair, an aviation company that is 90 per cent owned by Sonangol, and which mostly serves petroleum multinationals and additionally operates executive flights, including flights for the president of the republic. This administrative deal happened the day before a percentage of Sonangol Holdings was transferred to Manuel Vicente.
- On 24 July 2008, Sonangol Research and Production increased its public shareholding and admitted a new shareholder, Sonangol Holdings, as well as restructuring its social pact. Sonangol Research and Production is the subsidiary responsible for prospecting, research and the production of hydrocarbons. This makes it the most important source of revenue for Sonangol, which holds 90 per cent of its shares, while Sonangol Holding holds the remaining 10 per cent.
The case of Sonangol Research and Production deserves more attention. The 10 per cent that Manuel Vicente transferred to Sonangol Holding had, since 1992, belonged to Albina Assis, who at the time was chair of Sonangol. She supposedly held the shares as the representative of the company’s employees and other beneficiaries.
In terms of the article dealing with capital subscription in the statute that established the Sonangol Research and Production on 26 November 1992, Sonangol should own 90 per cent of its capital, the remaining 10 per cent being held by its employees and private shareholders.
The transfer of 10 per cent of Sonangol Research and Production’s shares to a private group represented by Albina Assis occurred, according to official information, with the authorisation of Resolution 9/91 of the Permanent Commission of the Council of Ministers. (This appears to be an error; in fact, Resolution 4/91 deals with this matter). At the time, Albina Assis was chair of Sonangol’s board of directors. This is clearly in violation of the laws which forbid public officials from personally benefiting from deals with the state.
A month after the deal she became minister of petroleum, a role which she occupied until 1999. She is directly answerable for the hundreds of millions of dollars of Sonangol Research and Production revenue that constitute the 10 per cent supposedly intended for employees.
It is noteworthy to emphasise that there are no public records of any meeting of Sonangol staff to share the dividends from the 10 per cent of Sonangol Research and Production that they supposedly owned. It is also unknown who else was part of the consortium headed by Assis. All that is known is that she took control of the 10 per cent share.
- On 24 July 2008, Sonangol Holdings assumed a 10 per cent share in Sonangol Distribution, which distributes and markets fuel and gas for Angola’s internal consumption. Sonangol holds the remaining 90 per cent.
- On 8 September 2008, Sonangol Holdings took control of 10 per cent of Sonangol Logistics, which looks after the storage, marketing and transport of fuel 'at the level of the entire petroleum market'.
THE LAW ON PUBLIC PROBITY
Manuel Vicente’s self-dealing, as described above, blatantly breaks the law. Article 25 (a) of the 'Law on Public Probity' makes it illegal for a public official to receive a cut of a deal in which he or she has decision-making powers or influence. In the case of Manuel Vicente, he sold, offered or illegally transferred the Sonangol shares for his personal benefit. This act constitutes the crime of active corruption as defined in articles 318 and 321 of the Angolan Penal Code. Vicente received a percentage of Sonangol Holdings through a decision authorised by himself as chairman of the board of directors and director-general of Sonangol. The Penal Code provides for a prison sentence of between two and eight years for such cases of corruption.
Moreover, Article 26 (a) of the 'Law on Public Probity' sees an action of this kind as something that harms public goods by causing public assets to be transferred to a private individual. Article 31 (c) insists on the complete repayment of goods or funds alienated from the public purse. Manuel Vicente is legally required to hand back the percentage that was transferred into his name.
On 17 April 2010, the weekly paper Seminário Angolense exclusively published a summary of this investigation. Sonangol’s management responded on 20 April with the following statement:
1. 'Sonangol SGPS was established in September 2004 with the purpose of managing Sonangol EP’s investments in other firms.'
2. 'In 2007, Sonangol carried out a restructuring of the shareholding structure of its subsidiaries. During discussions on 5 March 2007 the board of Sonangol EP decided that 99% of the shares in Sonangol SGPS would be held by Sonangol EP and 1% by the chairman of its board. Its shareholding structure was duly changed in April 2007 and in July 2009 its statutes were completely overhauled, and its trading name changed to Sonangol Holdings. In this way Sonangol Research and Production was taken out of the company’s shareholding.'
3. 'Manuel Vicente was entrusted in the name of the state to hold 1% of the capital of Sonangol Holdings, since it is not permitted to set up or maintain companies with only one partner or shareholder.'
The arguments presented by Sonangol seem to suggest that one has to commit an illegal act in order to fulfil a legal requirement. There is no law in Angola that permits a citizen in his private capacity to represent the state’s financial participation in any business, public or private. Moreover, the bylaws of Sonangol Holdings – the document that is the legal guarantee of the firm’s existence – contains no clause that provides for Manuel Vicente’s participation as a representative of the state. The usual practice when creating or restructuring publicly owned companies is to form a partnership between two or more companies from the same group, or in partnership with others owned by the state. Sonangol is an example of this, having created and restructured various firms that have entered partnerships with Sonangol’s subsidiaries.
The government, for its part, clarified the doubts surrounding the representation of the state’s capital in business activities. It did so through despatch number 53/04 of 17 February 2004 by the Finance Ministry, which declares:
1. 'All business shares held directly by the state in various commercial companies will be held by the Angolan Institute of State Participation, in the name of and representing the state.' (Article 1)
2. 'The powers conferred by article 1 include the power to exercise the functions of a shareholder or partner.' (Article 3)
Apart from an obscure clause that grants autonomy to strategic companies, Angolan legislation makes no exceptions for Sonangol. Furthermore, Sonangol offered no explanation of the transfer of shares to Albina Assis. In April this year, Assis returned to Sonangol as a member of the board of directors.
Resolution 4/91 of the Permanent Commission of the Council of Ministers, signed by President José Eduardo dos Santos on 6 December 1991, unequivocally confirms (in article 4 of the preamble) the participation of workers and private shareholders in Sonangol Research and Production. Sonangol Research and Production’s own statues, approved by the president on the same day, confirm in article five that the company is to be owned 90 per cent by Sonangol, with the remaining 10 per cent of shares to be held by employees 'of Sonangol, of the company itself and other shareholders'.
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* Rafael Marques de Morais is an Angolan journalist and writer with a special interest in Angola's political economy and human rights. His website is makaangola.com.
* Please send comments to [email protected] or comment online at Pambazuka News.
 EP is the Portuguese abbreviation for 'public company'.