The latest twist in the unfolding confrontation between Zambia’s Labour Minister Fackson Shamenda and the Nigerian billionaire Aliko Dangote involves the alleged foul play by a local cement competitor and controversial financier, Rajan Mahtani.
Shamenda was recently been slapped with a lawsuit by Dangote Industries Zambia Ltd (DIZ), who are seeking damages to compensate for the false allegations that the company had attempted to bribe the minister.
According to a well placed source, Shamenda is working closely with the Finance Bank Chairman Mahtani in order to disparage and discredit Dangote in order to kill off the expected competition from DIZ’s planned cement plant in Ndola, which is due to come online in November.
The source says that Mahtani, whose disputed ownership of Zambezi Portland Cement (ZPC) had become his primary income stream, has the most to gain from Dangote being pushed out of the market, and is willing to go to any lengths to battle the Nigerian competitor, including by instructing a minister to operate as his proxy.
“Mahtani has used his influence in the PF government for business advantage in the past, and he is doing it again with the Shamenda-Dangote dispute to prevent a competitor from pushing him out of the market,” the source said. “If Dangote’s lawyers investigate financial links between Mahtani and Shamenda, they will find very interesting results.”
Shamenda’s attack against the well-respected Nigerian billionaire, who to date has invested more than $400 million into Zambia, began with comments he made to local media claiming that a DIZ representative had offered him a bribe.
The Labour Minister alleges that on September 6 he was allegedly offered an inducement by the former DIZ human resources manger Bala Zango. A week later on September 13, Shamenda gave several interviews to media outlets, accusing the foreign investor of bribery, at which point he was informed that Mr Zango no longer even worked for the company at the time of the alleged bribe. Only on September 17 did Shamenda finally report the alleged bribe to the Anti-Corruption Commission (ACC).
Although under law, a minister is required to report any claim of bribery to the ACC within 24 hours, the authorities have not yet taken any action against Shamenda. A subsequent investigation by the ACC into the Dangote matter has found no evidence of wrong doing, however Shamenda has not stepped back from his statements.
Previous to the bribery claims by Shamenda, Dangote’s representatives say that Shamenda made at least four “surprise visits” accompanied by media to the construction site of the cement plant in the absence of notifying any senior management.
According to a statement of claim filled in the High court on Thursday, DIZ is claiming general damages for slander against Shamenda published in the presence of the Labour Commissioner Cecilia Mulindeti-Kamanga, Mineworkers Union of Zambia president Nkole Chishimba, the mineworkers of Zambia general secretary Joseph Chewe, the workers compensation fund control board public relations manager Maybin Nkolomba and various members of the local press.
DIZ is also claiming general damages for libel caused to be published by the defendant in the local media, aggravated damages for slander and libel and special damages in the sum of K112.042.84.
In it claim filled in the High Court, DIZ said on the evening of 12 September 2012, the defendant informed DIZ that he would be visiting their premises the following day and despite being advised that the managing director would not be available, the defendant went ahead and visited in the presence of government official, union representatives and members of the local press.
At a meeting held during the defendant’s visit and in contumelious disregard of the plaintiff’s reputation, the defendant caused to be published words which were based on malicious falsehoods and were defamatory, slanderous and libelous of the plaintiff’s business and professional reputation.
In its claim, DIZ further says the defendant went with other public officers and members of the press knowing very well that whatever he would say would be reproduced in print and electronic media.
“By reason of publication of the said words, the plaintiff has been brought into public scandal and its reputation has been injured,” reads the claim.
DIZ, who is being represented by Theotis Mataka and Sampa, said the court will be asked infer that the defendant published the said slanderous words having established that prospect of political mileage to himself by reason of his publication far outweighed the prospect of material loss.
Mahtani’s ownership of Zambezi Portland Cement also continues to be the subject of dispute, as the company founders claim that the financier illegally seized control of the company in December 2012 after forging shareholder transfer certificates and organizing the illegal deportation of two executives.
The Zambian banker faces a formidable opponent in Aliko Dangote, who ranks among the top 30 of the wealthiest people in the world, and is considered Africa’s most successful businessman with an estimated net worth of more than $25 billion.
A source familiar with operations at ZPC says that Rajan Mahtani may be motivated to go to war against the powerful Dangote empire because he is worried that DIZ will be able to flood the market by producing 1.5 million tonnes of cement a year, while ZPC only produces 450,000. Before Mahtani allegedly stole control of the cement plant from the original owners, ZPC was producing a product that 45% higher quality – meeting Western European standards – yet still selling at the same price of lower grade products from the other main producer, LaFarge Cement. Under Mahtani’s adminstration, the plant has lost the technical capacity of skilled engineers to produce high quality cement, while also suffering a 33% decline in production.
“ZPC under Mahtani has no ability to produce a higher quality product that what LaFarge or Dangote will be selling, so once the Nigerians begin aggressively marketing at very low prices, his operations will be severely impacted,” the source said.