Revealed:
how Angolan ruler's daughter used her status to build $2bn empire
Leaks show
how Isabel dos Santos became Africa’s richest woman at expense of Angolan state
Juliette
Garside, David Pegg and Hilary Osborne
Sun 19 Jan
2020 18.00 GMTLast modified on Sun 19 Jan 2020 22.36 GMT
The complex
financial schemes that helped Africa’s richest woman amass a fortune at vast
cost to the Angolan state can be revealed for the first time after a huge leak
of confidential documents from her business empire.
Isabel dos
Santos, who is known as “the princess” in Angola, the oil-rich nation her father
ruled as president for almost four decades, has long denied that her estimated
$2.2bn (£1.7bn) fortune is the result of nepotism or corruption.
However, an
investigation by the Guardian and journalists in 20 countries, led by the
International Consortium of Investigative Journalists (ICIJ), suggests Dos
Santos benefited from extraordinary opportunities afforded to her by the
government of her father, José Eduardo dos Santos, before he stood down as
president in September 2017.
The
businesswoman, who spends much of her time in London, controls interests across
Africa and Europe spanning banking, telecoms, TV, cement, diamonds, alcohol,
supermarkets and real estate.
The Luanda
Leaks are based on a trove of 715,000 emails, charts, contracts, audits and
accounts that was obtained initially by the Platform to Protect Whistleblowers
in Africa (PPLAAF), an anti-corruption charity whose work with key witnesses
helped topple the South African leader Jacob Zuma. The trove was then shared
with the ICIJ.
Dos Santos
and her husband, the businessman and art collector Sindika Dokolo, say
computers belonging to their employees and legal advisers were hacked. They say
they are the subjects of a politically motivated witch-hunt led by Angola’s new
president. Through their lawyers, they rejected any allegation of wrongdoing,
and vehemently denied being financed by state money.
“There is
an orchestrated attack by the current government that is completely politically
motivated, it’s completely unfounded,” Dos Santos told BBC News. “I can say my
holdings are commercial, there are no proceeds from contracts or public
contracts or money that has been deviated from other funds.”
Dokolo
described the government actions as “armageddon” and a risk to the economy. The
couple say their businesses employ thousands of people in Angola and are among
the country’s biggest tax contributors. “We have worked and invested in this
country, more than many others,” he said.
In an open
letter, José Eduardo dos Santos rejected allegations of wrongdoing, saying he
had “not transferred to himself, or to any other entity, money from the state”.
After a
seven-month-investigation, the Guardian, working alongside outlets including
the BBC, the New York Times and Portugal’s Expresso newspaper, has uncovered
documents that raise questions over preferential deals and lucrative
transactions with the Angolan state worth hundreds of millions of dollars.
The
material reveals an opaque network of about 400 companies, many of them
offshore, connected to Dos Santos, Dokolo and their associates, and the
assistance given to the couple in managing them by a coterie of European and
American management consultants, accountants and lawyers.
The
documents appear to suggest that:
• The state
oil company Sonangol sold Dokolo what has become the couple’s most valuable
asset: a stake in the Portuguese oil corporation Galp, now worth €750m after an
initial loan-backed payment of just €11m.
• A total
of $115m in payments to consultancy firms, ordered while Dos Santos was chair
of the state oil company, were routed through a Dubai company controlled by her
associates.
• A
business venture with the state diamond company allegedly resulted in $200m of
public debt propping up an ailing Swiss jewellery brand partly owned by Dokolo.
• Two Dos
Santos companies and their subcontractors stood to collect up to $500m in fees
from a Dubai-style real estate development in the Angolan capital, Luanda, that
was later cancelled by the new president for “over-invoicing” and
“disproportionate compensation”.
Three weeks
ago, Angola’s attorney general announced a freeze on the assets of Dos Santos,
Dokolo and their chief adviser, alleging that their dealings with the country’s
publicly owned oil and diamond companies had “harmed” the state to the tune of
$1bn.
Angolan
prosecutors launched a criminal investigation into her actions while at the
helm of the state oil company, Sonangol, in September. They are working with
counterparts in the UK, Portugal, Switzerland, the US and the Democratic
Republic of the Congo to trace assets, prevent money transfers and gather information.
Dos Santos
says she is the subject of a witch-hunt by Angola’s government, designed to
neutralise her as a potential political opponent. On Wednesday, she provoked
speculation about a bid for the presidency, telling a TV interviewer it was
“possible” she would run for office.
However,
Dos Santos has not visited Angola for more than a year. A prosecutor told the
Portuguese newspaper Expresso she was thought to have left the country hours
after receiving a request from prosecutors to appear for questioning in July
2018. Through her lawyers, Dos Santos said she had “no record of having
received any such request”, and that there was no question of her having
refused to meet prosecutors.
Dos Santos
and her half-brothers and sisters are among the most prominent members of the
oligarchy of powerful families in Angola. Her father came to office in 1979 as
head of the People’s Movement for the Liberation of Angola (MPLA). After the
end of the civil war in 2002, President Dos Santos and the MPLA consolidated
power by bringing the most valuable sectors of the economy into government
ownership.
The spoils
were shared with a select group with links to politics and the military. As a
result, Africa’s second-largest oil producing nation became known as one of the
most corrupt countries on Earth, ranking near the bottom of the Transparency
International corruption perceptions index.
“These are
the classic symptoms of a captured state,” said Steve Goodrich, a senior
research manager at Transparency International UK, after reviewing the Luanda
Leaks findings. “Here we have industry and politics all in one family, with no
apparent separation of powers.”
The leak
includes data from Fidequity, a team of advisers who acted as a family office
for the couple, administering their empire from plush premises above a Louis
Vuitton salesroom in Lisbon.
As the
couple grew richer, emails and board minutes show the number of banks prepared
to have them as clients dwindled. The data indicates that top-tier lenders
severed ties after the Dos Santos regime was ruled a corruption risk by
compliance departments.
Company
service providers in the Netherlands and the Isle of Man also turned down their
business, the files suggest. Dokolo says he has been unable to open bank
accounts under his own name in London and Paris since 2001.
Other
European companies appear to have taken a different approach, helping the
couple move money and win lucrative contracts from the Angolan state. The blue
chip firms PwC and Boston Consulting Group (BCG) collected millions in fees,
providing services such as auditing of accounts and management consultancy.
PwC, which
handled auditing and accounts for Dokolo companies in Malta, Switzerland and
the Netherlands, said it had opened an internal investigation “in response to
the very serious and concerning allegations” and “taken action to terminate any
ongoing work for entities controlled by members of the Dos Santos family”.
BCG said
senior partners conducted regular reviews. “We are proud of and take
responsibility for our work, and are strict in adhering to our policies and
values,” a spokesperson said.
Since
taking over the leadership of the country and its ruling party, with the
blessing of José Eduardo dos Santos, the new president, João Lourenço, has
vowed to fight the “cancer of corruption”. The most high-profile targets of his
anti-graft drive have been the children of his predecessor.
Isabel dos
Santos’s half-brother, José Filomeno dos Santos, is on trial for the attempted
looting of $500m from the country’s sovereign wealth fund. He has pleaded not
guilty. Her half-sister, Welwitschia dos Santos, a member of parliament, was
impeached last year after moving to Britain. She fled after alleging she had
been threatened by the Angolan secret service.
Dos Santos,
however, is fighting back. In recent weeks, she has toured media outlets giving
interviews, saying her wealth is the result of hard work and business acumen.
Her husband has opened an arbitration dispute in London against the state
diamond company, and says he is involved in a second arbitration over Galp in
the Netherlands.
The
Netherlands dispute centres on a loan from the state oil company, Sonangol,
which sold part of its shareholding in Galp to a vehicle controlled by Dokolo
in 2006. The agreed price was €75m, with Dokolo’s company making an upfront
payment of €11.2m and committing to pay the rest at a later date from
dividends. If the whole amount had not been repaid by 31 December 2017, in
euros, Dokolo’s vehicle risked losing the shares.
While Dos
Santos was chair of Sonangol, it agreed to let Dokolo’s vehicle make the
repayment in Angola’s volatile currency, the kwanza. After Dos Santos was
sacked from the state oil company, its new managers cancelled the deal and sent
the money back. Sonangol is now demanding compensation.
Dokolo
denies the deal was a preferential one, and said there was “absolutely no
wrongdoing”. Through his lawyers, he said that it had been approved after an
internal review at Sonangol, and that the state oil company’s purchase of a
shareholding in Galp, one of its most successful investments, was originally
his wife’s idea and had been negotiated by him.
Dokolo said
he invested $115m in equity in the Swiss jeweller; that his commitment matched
that of the state diamond company; and that the business “steadily improved”
under his ownership.
Dos Santos
said under her leadership, Sonangol spent far less on consultants than
previously. Her lawyers said the Dubai company that handled Sonangol’s payments
to consultancy firms was a lead contractor with a formal contract approved by
the board of directors, and was not owned by Dos Santos.
Challenged
about how she has apparently benefited from her father’s decrees, Dos Santos
said the president’s role was to ratify government concessions and licences,
and that it would be hard to do business in Angola without ever having a decree
relating to one of her companies. Her lawyers added that the prices agreed with
her companies for the proposed redevelopment of Luanda were competitive, and
that the allegations of overcharging were “false and unfounded”.
In a sign
that the international community is beginning to close ranks against Dos
Santos, her name has been removed from a list of participants preparing to meet
in Davos this week for the World Economic Forum’s annual gathering of business
and political leaders. Her company Unitel had paid to be a sponsor. The event’s
organisers said they were “re-evaluating” Unitel’s participation.
Additional
reporting by Caelainn Barr.
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