Unitel sues Isabel dos Santos company as her corporate empire continues to crumble

Luanda Leaks showed how the mobile com­pa­ny became a cash cow for the Angolan bil­lion­aire. It’s now seek­ing repay­ment of loans totalling $430 million.

Will Fitzgibbon, ICIJ, December 17, 2020

Angola’s largest mobile phone provider has sued a com­pa­ny con­trolled by bil­lion­aire Isabel dos Santos after it stopped repay­ing loans fol­low­ing a cash cri­sis deep­ened by the Luanda Leaks investigation.

In paper­work filed in a London court in October, Unitel alleged that dos Santos’ Dutch com­pa­ny, Unitel International Holdings BV, or UIH, default­ed on loans issued from 2012 to 2013. Unitel is seek­ing the imme­di­ate repay­ment of more than $430 million.

Unitel is one of Angola’s most vis­i­ble com­pa­nies with an esti­mat­ed nine mil­lion cus­tomers. Dos Santos was Unitel’s chair at the time of the loans, which were used to fund a shop­ping spree in telecom­mu­ni­ca­tions com­pa­nies across the Lusophone world. UIH snapped up stakes in Portugal, Cape Verde and Sao Tome & Principe, accord­ing to Unitel’s com­plaint, which was shared by Law360.

Unitel alleges that UIH, which despite the name has no cor­po­rate con­nec­tion to Unitel, first fell behind on inter­est repay­ments in September 2019. According to the mobile phone oper­a­tor, UIH missed increas­ing­ly more valu­able repay­ments in February and August 2020 fol­low­ing the pub­li­ca­tion of the Luanda Leaks inves­ti­ga­tion by the International Consortium of Investigative Journalists.

The inves­ti­ga­tion showed how cor­rupt deals and insid­er agree­ments made while dos Santos’ father, Jose Eduardo, was pres­i­dent turned her into Africa’s wealth­i­est woman but left oil- and dia­mond-rich Angola one of the world’s poor­est countries.

In its court fil­ings, Unitel claims that a series of cor­po­rate, reg­u­la­to­ry and judi­cial actions tak­en in the wake of Luanda Leaks may cause UIH to not repay the loans.

In April, a Lisbon court seized dos Santos’ stake in Zopt, which owned part of NOS, a $1.82 bil­lion Portuguese tele­vi­sion, Internet and tele­phone ser­vice provider. The seizure was grant­ed “in rela­tion to pro­ceed­ings which are believed to be pro­ceed­ings against IdS con­cern­ing a vari­ety of white col­lar crimes,” Unitel wrote, refer­ring to dos Santos by her ini­tials. Months lat­er, Zopt’s share­hold­ers, includ­ing UIH, announced its dissolution.

The seizure of dos Santos’ stake in Zopt and its dis­so­lu­tion “ren­der UIH unable to per­form its oblig­a­tions,” Unitel said. “Wrongfully, UIH has failed to pay the out­stand­ing debt, accrued inter­est or any oth­er sums demand­ed and Unitel is enti­tled to claim and here­by claims the same,” Unitel said. It also accused UIH of refus­ing to hand over documents.

Schillings, London-based lawyers for dos Santos, did not reply to a request for comment.

Dos Santos stepped down from Unitel’s board in August. Earlier this month, dos Santos lost con­trol of the com­pa­ny that owned her 25% stake in Unitel, accord­ing to media reports of a court deci­sion in the British Virgin Islands.

As part of the Luanda Leaks inves­ti­ga­tion, ICIJ report­ing showed that Unitel became a cash cow for dos Santos. From 2006 to 2015, Unitel paid out more than $5 bil­lion in div­i­dends to share­hold­ers, ICIJ calculated.

ICIJ also report­ed on a dis­pute between UIH and PT Ventures, one of four part­ners in Unitel. In 2015, PT Ventures filed an arbi­tra­tion com­plaint with the International Chamber of Commerce in Paris, alleg­ing that hun­dreds of mil­lions in loans made to UIH were part of a “scheme to loot Unitel of its assets … for the ben­e­fit of Isabel dos Santos, the daugh­ter of Angola’s President,” ICIJ reported.

Luanda Leaks doc­u­ments show dos Santos signed off on the dis­put­ed loans as both the lender and the bor­row­er, which was pre­vi­ous­ly known as Jadeium BV. A PT Ventures’ rep­re­sen­ta­tive, Luis Pacheco de Melo, ques­tioned the deal and asked whether the board of direc­tors had signed off on the deal, accord­ing to doc­u­ments.

One doc­u­ment from Luanda Leaks show­ing Isabel dos Santos’ sig­na­ture as the lender and borrower. 

Dos Santos said that the loan was prop­er­ly approved, accord­ing to min­utes of the meet­ing. UIH denied the loot­ing alle­ga­tions and said deci­sions were made Unitel’s best inter­ests. The cham­ber in Paris ordered Unitel to pay PT Ventures more than $650 mil­lion for breach of con­tract. Her lawyers pre­vi­ous­ly told ICIJ that the rul­ing, which is con­fi­den­tial, found the loans caused “no damage.”

The BVI deci­sion is per­haps the great­est blow Isabel dos Santos has received since the ini­tial fall­out after Luanda Leaks broke in January 2020,” said University of Oxford pro­fes­sor Ricardo Soares de Oliveira.

Much of her busi­ness empire was shady and moved through vehi­cles that had no name recog­ni­tion, but Unitel is a house­hold name,” Soares de Oliveira said. “It is one of the high­est pro­file cor­po­ra­tions in Angola, a major employ­er that long embod­ied mod­ern busi­ness prac­tice, and the com­pa­ny to which Isabel is endur­ing­ly associated.”


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