In May 2011, Sudanese media reported on a commotion that erupted in the Sudatel room when a debate erupted among shareholders of Sudatel Telecom Group Ltd., which is the largest public telecommunications company in Sudan. Financial reports from 2010 showed that Expresso, the holding company for Sudatel’s overseas investments, sold 30% of its shares in Nigeria to the private company Larrycom. At the time, Larrycom belonged to anonymity.
According to a report published by one of the shareholders, the transfer of ownership of the company caused Sudatel’s deficit to rise to $189 million, and the shareholders confronted the members of the company’s board of directors and demanded know: “Who owns Larrycom?”
Sudanese newspapers circulated the news and described the incident as “the corruption of the century”.
This investigation is based on leaked documents obtained by the International Consortium of Investigative Journalists (ICIJ) and shared with ARIJ and a large number of publishers around the world as part of a project called Pandora Papers. The leaks mark the largest cross-border journalistic collaboration project in history and include millions of documents from tax haven law firms. They also uncover assets, secret transactions and the hidden fortunes of the wealthy, including over 130 billionaires, over 30 world leaders, a number of fugitives or convicts alongside sports stars, judges, tax authorities and counterintelligence agencies.
These documents reveal an alliance between the former chairman of the board of directors of Sudatel, Abdel-Aziz Osman and Abdel-Basit Hamzah, the businessman close to former Sudanese President Omar Al-Bashir. Together, they transferred shares of the public company Sudatel to the private Sudanese company Larrycom, via Expresso Holding. They also teamed up to set up another company under the name Larrycom in the British Virgin Islands just before signing the deals, which amounts to a conflict of interest.
The friendship between Hamzah and Al-Bashir dates back to when the former was a member of the Islamic Movement, through which the National Congress Party that ruled Sudan emerged. Abdel-Aziz Osman was a leader of the same party.
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Larrycom: the beginnings
After the revolution that overthrew the President of Sudan, Omar Al-Bashir, in 2019, the Committee for the Elimination of Empowerment, the Fight against Corruption and the Recovery of Sudanese Funds issued Decision No. (134/04 ) in April 2020 to freeze the assets and bank accounts of sixteen companies and personalities, all owned or directed by businessman Abdel-Basit Hamzah. These included the Zawaya Company, which was founded in 2002 and the companies it owns: Larrycom for Limited Investments, also founded in 2002, and Ram Energy Company Ltd., founded in 2003.
During a press conference held in April 2020, the Committee stated that Abdel-Basit Hamzah “started as a minor officer in the armed forces and belonged to the Islamic Movement. In 1985, he joined the special work system in the army and through his work gained access to sensitive files, he was able to control more than two billion dollars and transformed himself overnight into a business tycoon, he headed the special operations department and worked in many other installations run by the regular forces. He came across the telecommunications sector, which is an extremely wealthy sector.”
Hamzah’s relationship with the telecommunications sector began in 2002, when his newly established company, Larrycom, was granted the license to run the second telecommunications company, which later transformed into MTN. Larrycom owned 15% of MTN Sudan’s shares, while the company itself owned the rest.
Hamzah was the chairman of the board of directors of the Sudanese public company, Sudatel, and worked alongside Abdel-Aziz Osman, who is an Islamist and a member of the National Congress Party which was previously in power. Under their leadership, Sudatel’s sister company, state-owned Mobitel, was sold for $1.3 billion. According to the Committee for Eliminating Empowerment, Combating Corruption and Recovering Sudanese Funds, Mobitel was sold to a foreign company, namely the Kuwaiti company Zain, for 10% of its original value. Thanks to this acquisition, the foreign company made a profit of $ 5 million per day. The Committee notes that the funds from the transaction were used in outward investments in West Africa.
Expresso and investments in West Africa
Expresso was founded in the United Arab Emirates in November 2007 with a capital of $50,000.00, and Sudatel owns 75% of its shares. A report from the Dubai International Financial Center shows that Larrycom is Sudatel’s only partner in Expresso. Company registration papers reveal that, until September 16, 2012, Abdel-Basit Hamzah was one of the directors of the company founded in the Emirates.
According to the 2010 Sudatel report, the purpose of establishing Expresso was “to manage the group’s global operations”, which were focused on West Africa.
Two months after the creation of Expresso, the leader of the National Congress Party in Sudan, Abdel-Aziz Osman, became chairman of the board of Sudatel. According to the leaked documents, in February 2008 – and a month after taking up this position – Expresso filed an application with the Panamanian legal office, Alemán, Cordero, Galindo & Lee, to register the company in the British Virgin Islands under the same name. . of Larrycom Ltd. for investments. The 50,000 shares of this company were divided between Hamzah and Osman.
At the same time, a network of companies directly or indirectly owned by Sudatel has established itself in the British Virgin Islands. These were led by the directors of Sudatel and Expresso: Khalid Hisham, Tariq Hamzah Zain Al-Abedin and Tariq Hamzah Rahmat Allah. Larrycom was the only company in the network that was owned by people rather than companies.
Two years prior to this step, the US Treasury Department had issued Decision No. 1340 0E to place the following companies on the sanctions list in 2006 for “their contribution to the conflict in the Darfur region”: the public company Sudatel; Ram, which is owned by Larrycom which, in turn, is owned by Zawaya.
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The Nigerian deal
When Osman became chairman of Sudatel’s board of directors in 2008, the group purchased an additional 50% of the shares of state-owned Intercellular Nigeria, Ltd., in early 2009. Thus, the Nigerian company was 70% owned by Sudatel through a $60 million deal, as shown in Sudatel’s 2009 financial report.
However, at the end of the year, on December 31, 2009, Expresso, the company which manages Sudatel’s assets abroad, sold 17.5% of Sudatel’s shares in the Nigerian company to the Sudanese Larrycom. This sale reduced Sudatel’s share to around 52.5%.
On January 7, 2010, Expresso sold Sudatel’s 30% share in the company to Larrycom for $25.71 million, with a profit of $6.063 million, as reported in the company’s 2010 financial report. As a result, Sudatel’s share in Intercellular Nigeria was reduced to only 30%.
This transaction angered Sudatel shareholders. On May 18, 2011, the company’s former shareholder, Amin Sayid Ahmad, published a letter which was circulated by the Sudanese Al-Ahdath newspaper. Amin explained that the general deficit of Sudatel on the financial statements of the company reached 189 million dollars more than in 2009. This means that in 2009 and 2010 there was a reduction of 264 million dollars in own funds.
Amin’s letter mentions that Osman signed off on the company’s financial reports. Amin is a banker and financial expert, and he considers that the signing of financial reports is the responsibility of the general management and not of the board of directors. Point (2) of Article (265) of 1925 states that “the general manager is also the main executive authority before the board of directors and is responsible for the financial, administrative and technical activities of the company, on the basis of the company’s registration agreement and the directives of the board of directors.
Amin pointed out that the independent auditors of Ernst & Young in Bahrain, who had previously audited the group’s financial statements in 2009, did not do so in 2010.
Amin noticed the recurrence of the Larrycom name in a number of follow-up clarifications of the financial reports of the sale operations of the shares of companies affiliated to the Sudatel group. He also noticed other transactions for millions of dollars and asked, “Which company valued the assets sold to Larrycom?” Who owns Larrycom? What is the paid-up capital of this company? Group, whose shares are held by the Chairman of the Board of Sudatel?”
In a statement to ARIJ, Amin says the ultimate beneficiary of the sale of Sudatel shares to Larrycom is the Zawaya company. This company was founded by a group close to former President Omar Al-Bashir, and includes people like Abdel-Basit Hamzah and Abdel-Aziz Osman.
Other than an unknown and unverified LinkedIn account listing “Osman” as a director of Zawaya, we have not obtained any information indicating that Osman was one of Zawaya’s shareholders. Zawaya’s old website clearly mentions that Hamzah previously ran the company.
The Committee for Eliminating Empowerment, Combating Corruption and Recovering Sudanese Funds sees that the deals between Sudatel, Expresso, Larrycom and Al-Bashir are all linked. In a statement, the Committee said: “Expresso controlled all these funds, and very few of them returned to Sudan. They were invested outside the country on behalf of Abdel-Basit Hamzah and others. , as well as the family of ousted President Omar Al-Bashir.”
Regarding the transactions made when Abdel-Aziz Osman was running the company, Amin tells ARIJ that as a public company, the Chairman of the Board of Sudatel should have led the transactions through the General Assembly before sealing the agreements, but that did not happen. to arrive.
Legal status of Sudatel
Sudatel’s financial reports classify the company as a public company under the Public Companies Act of 1925. Section (2-262) (B) of this Public Companies Act states that the board of directors of such companies must sign contracts and agreements on behalf of the public company.
Jackson Oldfield is the founding partner of the German institution Civil Forum for Asset Recovery. He tells ARIJ that Larrycom is owned by Abdel-Basit Hamzah, who partnered with Sudatel chairman Abdel-Aziz Osman, and that makes dealings between Sudatel and Larrycom “appear to be a conflict of interest.”
Hamzah is currently serving a ten-year prison sentence and has been charged with unlawful profit and anti-money laundering and anti-terrorism offenses. In the meantime, the Committee to Eliminate Empowerment is still trying to track its offshore investments, of which “very few have returned to Sudan”.
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