Thursday, March 23, 2017

SWAZI ELECTION CAMPAIGNING ILLEGAL



The Elections and Boundaries Commission (EBC) in Swaziland has warned people it is illegal to campaign for the national election until they have been given permission.

That means until King Mswati III, the last absolute monarch in sub-Saharan Africa, sets the date for the poll. It will be sometime in 2018.

The warning came from EBC officer Siboniso Nhleko at a voters’ education workshop at Khuphuka. 

Political parties are banned from taking part in elections and King Mswati’s subjects are only allowed to pick 55 of the 65 members of the House of Assembly; the other 10 are appointed by the King. None of the 30 members of the Swazi Senate are elected by the people; the King appoints 20 members and the other 10 are appointed by the House of Assembly.

The King choses the Prime Minister and cabinet members. Only a man with the surname Dlamini can, by tradition, be appointed as Prime Minister. The King is a Dlamini.  

He also choses senior civil servants and top judges. 

International observers regularly declare elections in Swaziland to be not free and fair. 

After Swaziland’s previous election in 2013, the Commonwealth Observer Mission called for a review of the kingdom’s constitution. It said members of parliament ‘continue to have severely limited powers’.

The Commonwealth observers said there was ‘considerable room for improving the democratic system’.

They called for King Mswati’s powers to be reduced. ‘The presence of the monarch in everyday political life inevitably associates the institution of monarchy with politics, a situation that runs counter to the development that the re-establishment of the Parliament and the devolution of executive authority into the hands of elected officials.’

The Swazi Observer, a newspaper in effect owned by King Mswati, reported on Tuesday (21 March 2017) Nhleko stated that campaigning at this point in time was illegal. 

The newspaper reported, ‘In fact, Nhleko said there was a specific period where elections candidates are allowed to lobby for votes from the public. This is usually after the nomination stage. Nhleko said anyone who would be found campaigning before this stage would, therefore, be hauled before court and face a criminal offence.’

See also

KING’S BOGUS CLAIM ON DEMOCRACY

FALSE CLAIM OVER SWAZI DEMOCRACY

THE CASE FOR POLITICAL PARTIES

Wednesday, March 22, 2017

SECURITY FORCES ‘NOT UNDER CONTROL’



Security forces in Swaziland are not kept under proper control, a new report on human rights in the kingdom has revealed. And, about 35 percent of the entire Swazi Government workforce was assigned to security-related functions.

The annual report on human rights in Swaziland just published by the United States Department of State stated King Mswati III ruled as an absolute monarch and he and his mother exercised ultimate authority over the cabinet, legislature, and judiciary.  

The report stated, ‘The King is the commander in chief of the Umbutfo Swaziland Defence Force (USDF), holds the position of Minister of Defence, and is the commander of the Royal Swaziland Police Service (RSPS)and the His Majesty’s Correctional Services (HMCS).  He presides over a civilian Principal Secretary of Defence and a commanding general.  Approximately 35 percent of the government workforce was assigned to security-related functions.’

The report added, ‘The RSPS is responsible for maintaining internal security as well as migration and border crossing enforcement.  The USDF is responsible for external security but also has domestic security responsibilities, including protecting members of the royal family.  

‘The Prime Minister oversees the RSPS, and the Principal Secretary of Defence and the army commander are responsible for day-to-day USDF oversight.  The HMCS is responsible for the protection, incarceration, and rehabilitation of convicted persons and keeping order within HMCS institutions.  HMCS personnel, however, routinely worked alongside police during protests and demonstrations.  While the conduct of the RSPS, USDF, and HMCS was generally professional, members of all three forces were susceptible to political pressure and corruption.’

The 33-page report concluded, ‘Impunity was a problem.  Although there were mechanisms to investigate and punish abuse and corruption, there were few prosecutions or disciplinary actions taken against security officers accused of abuses.  

‘The internal RSPS complaints and discipline unit investigated reports of police abuse and corruption but did not release its findings to the public.  In most cases the RSPS transferred police officers found responsible for violations to other offices or departments within the police system.’

It added, ‘Civilian authorities failed at times to maintain effective control over the security forces.’

See also

U.S. BLASTS HUMAN RIGHTS

SWAZILAND: MASSIVE ‘SECURITY’ SPENDING

SWAZI SECRET ARMS DEAL FOR IRAN

Tuesday, March 21, 2017

KING WANTS TO REVIVE NGWENYA MINE



King Mswati III is encouraging Indian investors to reopen the Ngwenya iron ore mine in Swaziland that was forced to close in 2014 after he looted US$10 million from it.

The King stands to take 25 percent of the shares in any company that takes up his offer.

The King, who rules Swaziland as sub-Saharan Africa’s last absolute monarch, made his offer during a trip to India earlier in March 2017.

The King and his personal representative Sihle Dlamini were at the very heart of events that led to the collapse of the mining company SG Iron at the Ngwenya Iron Ore Mine in 2014. It had debts of US$4 million when it closed and more than 700 jobs were lost. King Mswati took a US$10 million loan from the company less than six months after it started trading which he refused to pay back when it hit difficulties. 

A compensation claim for at least US$141 million was later prepared by Southern Africa Resources Ltd (SARL), against the Kingdom of Swaziland at the International Centre for Settlement of Investment Disputes (ICSID).

SARL held a 50 percent stake in SG Iron Ore Mining (PTY) Ltd (SG Iron), which had formerly been known as Salgaocar Swaziland (PTY) Ltd. The Swaziland Government held 25 percent of the shares and the King personally held 25 percent ‘in trust for the nation.’ 

The mine was forced to cease trading in August 2014 after a series of events orchestrated by Sihle Dlamini, who is Director Administration at the King’s Office and Assistant Private Secretary to the King. He was also the King’s personal representative on the SG Iron board of directors.
Here is a step by step guide to what happened.

30 September 2010
SG Iron Ore Mining (PTY) Ltd. (when it was still called Salgaocar Swaziland (PTY) Ltd), was registered in accordance with the laws of Swaziland on 30 September 2010 under Certificate of Incorporation No.1196, with its principal business of operations at the Old Ngwenya Mine, Ngwenya, in the Hhohho district of Swaziland.

SG Iron’s stated goal was to reprocess iron ore dumps left over by the Anglo American Mining Company in the late 1970’s, when it ceased mining operations in the area, and to secure the main mine lease for 30 years once the iron ore dumps had been cleared. 

Due to advancements in technology, it had become scientifically possible to process the dumps and upgrade them into sellable grade ore. This project would create new jobs in Swaziland, while creating a new source of wealth for Swaziland, as well as clearing Swaziland of the dumps left by the Anglo American Mining Corporation and restarting mining activities.

30 June 2011
King Mswati, who as absolute monarch in Swaziland has sole control over mining rights in the kingdom, granted SG Iron a Mining Lease for seven years. The company agreed to pay the King ‘in trust for the Swazi Nation’ a royalty of 3 percent. It also gave the King 25 percent of the total company issued share capital at no cost. It also gave a further 25 percent of the issued share capital to the Swaziland Government, again at no cost. The remaining 50 percent of issued share capital went to SARL.

The King holds shares ‘in trust for the Swazi Nation’, but it is widely reported outside of Swaziland that in fact he has received millions of dollars from international companies such as phone giant MTN; sugar conglomerates Illovo and Remgro; Sun International hotels and beverages firm SAB Millerto, which he spends on himself and his family. 

The King, who rules over an impoverished kingdom of only about 1.3 million people, has 13 palaces, a fleet of top-of-the range BMS and Mercedes cars and a private jet airplane. He is soon to take delivery of a second private jet. Meanwhile, seven in ten of his subjects exist on incomes of less than US$2 per day.

As a general undertaking, the Mining Lease provided that each party should ‘act in such manner as shall be necessary in order to give effect to [the] Mining lease’. That mean they should all have worked to make sure the company was a success. 

It was agreed SARL, being the 50 percent shareholder of SG Iron, had management control of SG Iron, which was in charge of, and responsible for, day-to-day running of SG Iron. SARL was to provide all financial support and technical expertise necessary for SG Iron to succeed.

Article 6.8 of the Mining Lease provided that the Chairman in addition to having his own vote on the Board of Directors should have a casting vote. Shanmuga Rethenam was appointed as the Executive Chairman of the Board of Directors of SG Iron, and Sivarama Petla was appointed as its Chief Executive Officer. Both Executive Chairman and CEO were nominee and representatives of SARL.

Mbuso Dlamini was appointed as the Director for and on behalf of the Swaziland Government and Sihle Dlamini was appointed as the Director for and on behalf of the King.

SG Iron put up approximately US$50 million to start the mining operations and added further capital. The King and the Swaziland Government made no financial contributions.


21 October 2011
The official inauguration of operations was on 21 October 2011 with the dispatch of ore to Maputo Port in Mozambique. On 21 December 2011, the first shipment was carried out from Maputo Port and on 9 March 2012, a rail services from Mpaka to Maputo Port, Mozambique, started.

16 April 2012
Less than six months after operations began, King Mswati, through his representative Sihle Dlamini, asked for and received an advanced payment / loan of US$10 million on the King’s future dividend. This was at a meeting of the Board of Directors of Salgaocar Swaziland held in Mbabane, Swaziland, on 16 April 2012. The money was to be repaid from future dividends payable to the King. 

There was no public announcement made that the King received the money which he held ‘in trust for the nation’ and it is not known how he spent it. This later fuelled speculation that he had used the money to fund his own personal lavish lifestyle.

26 April 2012
Reports began to appear on the Internet and later in newspapers in Swaziland that King Mswati had taken delivery of a private Douglas DC-9 jet and that it had been given to him as a gift by Salgaocar. The company has denied it gave the jet to the King, but the Swazi Government was lukewarm in its denial. The Times of Swaziland reported, ‘Dismissing the rumours, government Press Secretary Percy Simelane said “That is pure speculation.  The donor has asked to remain anonymous and it will be like that.”’  

Barnabas Dlamini, the Swazi Prime Minister, claimed to the media that the jet had been donated by ‘development partners’ of Swaziland. 

21August 2014
Sihle Dlamini, representing the King at SG Iron wrote to the CEO of SG Iron, Sivarama Petla, instructing him not to sell any more cargo on 21 August 2014. He did this without consulting the major shareholder, SARL. Since that day all attempts by SG Iron to sell cargo were blocked.

Contrary to the terms of the Mining Lease, the Board of Directors was not consulted about the decision to stop sales of iron ore. The Chairman, who was to chair all board meetings under Article 6.7 of the Mining Lease, and who also possessed a right of veto, was not even informed of the King’s decision.

In October 2014, in a founding affidavit at the Swaziland High Court to have the company placed under Judicial Management, Sihle Dlamini would state that a shareholders’ dispute at SARL in Singapore had made it impossible for management decisions to be taken at SG Iron. He also stated that the fall in the world price of iron ore had made production at the mine uneconomical.

After 21 August 2014
Blocking the sale of iron ore meant no trade could take place and SG Iron’s operations were brought to an abrupt standstill. Since no money was coming into the company from the sale of cargoes there was a cash-flow crisis. 

Sales could have resumed at any time because more than 100,000 tonnes of iron ore remained at Maputo Port, Mpaka Railway Siding and at the Mine Stockyard. In his High Court affidavit in October 2014, Sihle Dlamini revealed he had given instructions for ore to be stockpiled until the price of iron ore recovered.

SARL also requested that the King repay the full or part of the US$10 million loan / advance dividend to allow SG Iron to continue operating. The King refused to do this, instead the King’s representative Sihle Dlamini demanded that SARL inject more capital into the business, something it would not do while shipment of cargoes remained blocked.

SARL would say in January 2015 that it felt it had been held hostage by the King’s representative’s decision to unilaterally stop all shipments of cargo.

22 September 2014
At a board meeting of SG Iron held in Mbanane, Sihle Dlamini representing the King and Mbuso Dlamini, representing the Swazi Government, expressed dissatisfaction at the status of the company, saying that a shareholder dispute at SARL was impacting on SG Iron, something which was disputed by SG Iron.

The two men gave an ultimatum that fresh funds should be injected into the project no later than 26 September 2014. The Chairman of SG Iron, appointed by SARL, was present at this board meeting, and he requested that management allow the sale of the cargo, which would release sufficient funds to keep the company operating.

SARL again requested that the King should, ‘for the good of the company’s workers, its shareholders and the kingdom of Swaziland’, repay the full or part of the US$10 million loan / advance dividend to allow the continued operation of SG Iron. Sihle Dlamini, the King’s representative, refused.

Subsequent to the meeting, Sihle Dlamini, representing the King, asked SARL to wipe out the US$10 million loan.

29 September 2014
In a letter dated 29 September 2014, SARL refused to write off the King’s debt. SARL said in January 2015 that in response to this, Sihle Dlamini took a unilateral decision to stop operations and place the company into Judicial Management and then liquidation. This decision was taken without discussions with the major shareholder or considering the voting rights in place at SG Iron.

3 October 2014
Sihle Dlamini representing the King and Mbuso Dlamini, representing the Swaziland Government, called for a meeting of the Board of Directors and despite being told by the Chairman of the Board Shanmuga Rethenam that he could not attend, they went ahead with the meeting without him.

This was the first Board Meeting that had been held without the Chairman’s presence in the history of SG Iron. Sihle Dlamini, the King’s representative, served as the Chairman of the meeting, although he represented only 25 percent of the company’s share capital and SARL, the 50 percent shareholder, was supposed to have control of the board.

Sihle Dlamini and Mbuso Dlamani both resolved to place SG Iron under Judicial Management, without seeking the Chairman’s consent, rather than permitting operations and cargo sale to continue.

10 October 2014
SG Iron was placed under provisional Judicial Management by an Order of the High Court of Swaziland dated 10 October 2014. This order was based on the founding affidavit of Sihle Dlamini, the King’s representative. The Judicial Manager was able to immediately take control and assess the affairs, assets and liabilities of SG Iron.

In his statement, Dlamini said the company, ‘commenced operations on the 21st of October 2011 and it has been extremely successful to date and has been a major income earner for the Kingdom of Swaziland.

‘[It] has also provided a number of investment opportunities to local transport contractors, construction companies and heavy plant and machinery contractors who carry out the bulk of its mining operations at Ngwenya.’

He added the company, ‘is not in an insolvent position in that its assets exceed its liabilities’. He said, however, the Board of Directors had ‘become hamstrung’ and was unable to take effective decisions on the operations of the company.

He said, ‘During or about December 2013, a serious shareholder dispute arose between the shareholders of the investor SARL, which dispute has resulted in arbitration proceedings being instituted between themselves in Singapore.’

He said he was not, ‘fully apprised of the nature of the dispute’, but nonetheless believed it meant that SARL representatives on the Board of SG Iron were unable to take decisions.

Sihle Dlamini also said that the falling price of iron ore had impacted the company. He said the price fell from E1,360 (about US$136) per tonne in January / February 2014 to E550 (US$55) per tonne. This was a new six-year low of the price of iron ore. 

‘It also effectively meant that the cost of processing the ore now at the present moment exceeds the price that [SG Iron] is able to obtain for the ore on the international market. In other words, it has become financially impossible to continue to mine.’

He stated, ‘Currently, as at 30 September 2014 [SG Iron’s] total indebtedness to its creditors amounted to approximately E42 million (US$4.2 million at the then exchange rate). Although that amount seems large, [SG Iron] would very easily be able to pay these creditors if it were in a position to sell the product that it currently has and more so if the price of iron ore recovers.’

However, he did not report that even at the lowest price of US$55 per tonne, if he himself, as the King’s representative, were to permit the 100,000 tonnes of ore stockpiled to be sold it would raise US$5.5 million, more than the US$4.2 million SG Iron owed its creditors.

In his statement, Sihle Dlamini made no reference to the US$10 million loan that had been made to the King that he subsequently refused to pay back.

16 December 2014
On the request of the Judicial Manager appointed by the Court, the Court ordered the provisional liquidation, or winding up, of SG Iron by an Order dated 16 December 2014.

22 January 2015

A Notice of Investment Dispute from SARL prepared for the International Centre for Settlement of Investment Disputes (ICSID) on 22 January 2015 stated the Judicial Manager, who it said was controlled by the King through Sihle Dlamini and Mbuso Dlamini, informed all creditors / vendors of SG Iron of its provisional liquidation, but failed to inform its largest creditor and primary shareholder, SARL, in writing of the event. He also failed to inform Eltina Limited, a major creditor of SG Iron, who bought the cargo of SG Iron and had provided US$10 million as a loan to SG Iron.

SARL reported. ‘The Judicial Manager met with [Sihle Dlamini and Mbuso Dlamini] the Director representing the King and Government almost every day and took instructions only from them’, not the SARL directors, or Eltina Limited. 

SARL reported, ‘[SARL] should have been given the opportunity to put forward their case before the Judicial Manager, since there were numerous alternatives to revive the company, in a violation of their due process rights they have not been allowed to do so by [the Swaziland directors].’

SARL added the Judicial Manager, ‘acting solely on the instructions of [the King’s] representatives, wholly failed his duty’, and when SARL and Rethenam, as Chairman of SG Iron, asked to sell cargo at a higher price even to its own competitor, the Judicial Manager ignored this request. 

‘The only possible explanation for his refusal was that [the Swaziland representatives] knew that, if a cargo was sold, the company would receive cash flow and SG Iron could not be liquidated.’
The closure of the mining project cost 700 people their jobs in Swaziland and it was estimated that several hundred jobs were also lost at the Port of Maputo, Mozambique.

SARL also reported that it had ‘direct evidence’ that the mine was being guarded by the Umbutfo Swaziland Defence Force. 

‘[King Mswati III] is the Commander-in-Chief of the Umbutfo Swaziland Defense Force, providing further evidence of the wholesale expropriation of [SARL’s] investment by state organs of [Swaziland] including the King’s Office, [Swaziland’s] judiciary and [Swaziland’s] military,’ it stated.

SARL added that as a result of SARL’s closure its ‘investment has been expropriated’, and the King’s US$10 million dividend / loan ‘has been written off by judicial decree’.

SARL added, ‘Having expropriated [SARL’s] investments and avoided the repayment of US$56 million in loans to finance the investment, it is understood that the Judicial Manager is now attempting to sell SG Iron to third parties for a song.’

The notice stated it had ‘suffered direct harm in the amount of no less than US$141,147,440.17, for the direct financial consequences of the behaviour of the King and his representatives.

In addition, it is claiming US$57,186,022.53 for its advance and loan owed by SG Iron to SARL. SARL also stated that Eltina Limited was owed US$5,426,954.66.

In its notice of investment dispute, SARL said the order from Sihle Dlamini issued in August 2014 that no more iron ore should be sold was ‘a deliberate attempt to create an artificial cash crisis’ at SG Iron in order to gain control of the company and expropriate the company of its investments.
SARL linked the move to destroy the company to 6 April 2012 when the request was made by King Mswati III, for the US$10 million loan.

‘It appears to be the desire to avoid the repayment of this advance dividend / loan to HMK [His Majesty the King] that lies at the root of the expropriation of [SARL’s] investments in Swaziland,’ SARL stated.

1 February 2015
The Observer on Sunday, a newspaper in Swaziland, in effect owned by King Mswati, attacked SARL and its Notice of Investment Dispute. It quoted Sihle Dlamini, who called the notice ‘a smear campaign’. He also likened SARL to ‘terrorist’ organisations.

Following publication of this article, William Kirtley, attorney to SARL, wrote to the Observer, to say, ‘The only person who stood to gain anything from this was HMK [the King], since the joint venture had provided an advance payment / loan of US$10 million and, indeed, during one of the final board meetings it was repeatedly requested that this be written off SG Iron’s books.’

8 February 2015
The Observer on Sunday, part of the Swazi Observer group of newspapers, in effect owned by King Mswati and described by the Media Institute of Southern Africa in a 2013 report on press freedom in the kingdom as ‘a pure propaganda machine for the royal family’, attacked SARL and said it was, ‘lying by claiming to have filed a notice of arbitration with the International Centre for Settlement of Investment Disputes (ICSID) against the Kingdom of Swaziland’. It said it had proof that no such notice had been lodged.

In fact, SARL had never claimed to have ‘filed a notice of arbitration.’ In a media release dated 29 January 2015, it was announced SARL had submitted ‘a notice of investment dispute’.  A notice of investment dispute is first filed to see if the amicable resolution of a dispute is possible. Only when it is clear that the amicable resolution of a dispute is not possible is the ‘Notice for Arbitration’ filed.

·         This is a revised version of an article first published on the Swazi Media Commentary website on 9 February 2015.

See also
MYSTERY OF SWAZI KING’S $10m LOAN

KING AT CENTRE OF IRON MINE FAILURE
 
ONLY KING GAINS FROM MINE FAILURE