TRANSPARENCY International Zambia (TI-Z) chapter president Sampa Kalungu says the NAPSA, Industrial Development Corporation (IDC) and Workers’ Compensation Fund Control Board’s (WCFCB) US $44.8 million investment into a Chinese-owned tile-making company lacks transparency as the company is not listed on the Lusaka Stock Exchange (LuSE).
In response to a press query, Kalungu stated that the three parastatals should have requested the named company to get listed to ascertain its true financial value before spending huge sums of public funds on the investment.
“Our worry, as TI-Z is that this deal appears to lack transparency because as far as our research goes, the company invested in is not publicly trading as it is not listed on the LuSE. In our view, the best option in this instance would have been to request that the company gets listed in order for its true value and financial position to be easily established in the public eye,” Kalungu stated.
“TI-Z has noted with worry NAPSA’s growing propensity to make investments into various ventures that are purportedly meant to grow the organisation’s resource base. While it is good that NAPSA is thinking about growing its resource base, we would like to urge caution and a more measured approach to the sort of investments that NAPSA is making. In this particular instance, NAPSA, together with the Industrial Development Corporation (IDC) and Workers’ Compensation Fund Control Board (WCFCB), have reportedly invested US $44.8 million into a Chinese-owned tile-making company.”
He added that the continued mysterious investments by NAPSA should raise concern because it appeared that pension funds were being abused to pay private business at no benefit to contributors.
“The continued propensity by NAPSA in making such investments that seem to be shrouded in some mystery is something that should generate public concern because it appears that pension money is being used to pay private business interests at minimal or no benefits to the contributors. TI-Z would like to caution that the process of valuation of companies can be prone to corruption when people on both sides are looking to gain by unreasonably increasing the value. For this very reason, the better approach is to invest in companies that are listed so that the market does the valuation. We hope that going forward, NAPSA will take these concerns into serious consideration because they have an obligation to protect people’s resources and not expose those resources to any unwarranted risks,” stated Kalungu.
A News Diggers! investigation recently revealed that the IDC, NAPSA and WCFCB paid two Chinese investors by the name of Zhang Lingling and Huang Yaochi amounts totalling US $44.8 million as consideration for the purchase of a minority stake at their tile-making company.
The named Chinese are the two shareholders of a company called Marcopolo Tiles, which was officially opened by IDC board chairperson President Edgar Lungu in December, 2017.
The IDC had contradicted itself in a statement last Thursday, stating that the Corporation had partnered with two other government parastatals “to acquire a shareholding of 49 per cent in Marcopolo Tiles Company Ltd.” at a cost of US $44.8 million, when in fact, according to the Diggers! Investigation, the IDC and the two Chinese signed the sale and purchase agreement on June 3, 2020, two days before the funds were paid to the named Chinese investors.