A group of foreign investors in Zambia have secured a major international legal victory against one of the country’s most powerful businessmen, Rajan Mahtani, a close ally and financier of President Michael Sata.
According to an award decision dated 15 December 2013 from a Swiss arbitration tribunal in the case of Dr. Rajan Mahtani VS. Claudio Ventriglia, Antonio Ventriglia, and Zambezi Portland Cement, the court ruled strongly in favour of the respondents (the Ventriglias), dismissing the majority of Mahtani’s prayers for relief, which included a wide range of damages to quantified at a later date, likely totaling millions of dollars.
However, the Arbitral Tribunal dismissed all of Mahtani’s claims against Respondents 1 and 2, and was only successful on a small portion of his claims against Respondent 3 (Zambezi Portland Cement). None of the parties were found to be responsible for repayment of arbitration costs.
The source of the dispute behind the arbitration relates to the repayment of a loan from Barclays Bank for the construction of a cement plant in Ndola on behalf Zambezi Portland Cement, a company which has been dragged into a scandal following the alleged illegal deportation of foreign investors and a complex takeover of the company through extra-judicial methods by Mahtani.
Mahtani has been involved in other controversial business transactions related to his proximity to the ruling Patriotic Front party. In 2011, his bank was taken over by the Bank of Zambia for failing to comply with national laws concerning the concentration of ownership (a forensic audit discovered that Mahtani himself was a majority shareholder through front companies). Within 10 days of President Sata’s election, however, the bank was returned to its former owner, and a conviction of forgery (relating to control of Zambezi Portland Cement) was overturned.
Additionally, according to an investigative article published in the Mail & Guardian, Mahtani is also being sued by the British businessman Steven Singleton on a broken financing deal for a private hospital project involving South Africa’s Industrial Development Corporation (IDC), while another local businessman has accused him of violating a contract on the financing for a hotel project.