Court ties dos Santos to ‘fraudulent’ diamond deal as Portugal further freezes out billionaire
15 Jul 2020

An Angolan court has labeled a deal between the African country’s diamond company and Isabel dos Santos’ husband as “fraudulent” and harmful to average Angolans, according to a newly released decision.

The 44-page ruling by the Provincial Court of Luanda, released publicly earlier this month, prevents Banco BIC, partly owned by dos Santos, from recouping millions of dollars in loan and interest payments from Sodiam, the state-owned diamond firm.

Sodiam borrowed $98 million from Banco BIC at a 9% interest rate to fuel an investment into the struggling Swiss luxury jeweler de Grisogono, according to the Angolan government. Dos Santos’ husband Sindika Dokolo gained control of the jeweler through the controversial deal. The International Consortium of Investigative Journalists and news partners reported on the arrangement in January as part of the Luanda Leaks investigation.

De Grisogono filed for bankruptcy protection soon after the publicity. Sodiam claims that it is now facing a total loss.

The recent court ruling is the latest development in Angola’s attempt to recover money and assets from dos Santos’ vast business empire. The judge said the latest decision depends on the final outcome of a broader case through which the Angolan government has frozen $1.1 billion of dos Santos and Dokolo’s assets.

The provincial court said that the “fraudulent” diamond deal was for Dokolo and dos Santos the “opportunity” to control de Grisigono. It was never “an opportunity for Angolans as it was made to be believed.”

“De Grisogono received investment from Sodiam, as well as Victoria Limited whose shareholders are Victoria Holding Limited (of the defendants Isabel dos Santos and Sindika Dokolo) and Sindika Dokolo, who started to have management and control” of the Swiss company, according to the court ruling.

Dos Santos and Dokolo adamantly deny wrongdoing. Dos Santos has never had connections to, invested in or managed or controlled de Grisogono, London lawyers Schillings said on her behalf.

Dokolo’s lawyers previously told ICIJ that Dokolo initially invested $115 million and subsequently much more into de Grisogono. Sodiam joined the joint venture after recognizing “potential benefits in Mr. Dokolo’s vision,” his lawyers told ICIJ.

Dos Santos’ lawyers told ICIJ that the civil court decision was “a secret trial…made without her knowledge, without any representation, without even the basic legal requirement of being informed of the proceedings.”

The lawyers added: “Ms dos Santos is, once again, being denied justice by a corrupt legal system which is not allowing her to defend herself. Precisely the kind of state sponsored judicial manipulation the ICIJ might be expected to investigate. Ms dos Santos has never had any interest in or connection to De Grisogono or the joint venture it entered into with Sodiam. It is therefore untrue to claim she benefited from this transaction in any way. Further, the Banco BIC loan was used by Sodiam to invest in a series of projects, of which de Grisogono was one.”

Sodiam claims to have lost its entire $120 million investment. The state-owned company “never received any dividend or participation in the management of companies created abroad,” according to the court ruling.

Paying Banco BIC will bankrupt Sodiam, the court said.

Dos Santos “is the largest beneficiary” of loan payments by Sodiam to Banco BIC, the judge wrote.

“By continuing to pay the bank loan, the Angolan State would be benefiting Isabel José dos Santos twice: first, when it asked for credit to create an extremely profitable business for her (Isabel dos Santos) and, now, paying the same credit to the financial institution where…[she] is the biggest effective beneficiary.”

“We are therefore, in fact, facing yet another situation of illicit enrichment,” the court said, calling the case “another situation of private companies created with public funds.”

The ruling is another blow to dos Santos’ efforts to maintain her business empire following the fallout from ICIJ’s Luanda Leaks investigation.

By Will Fitzgibbon, ICIJ, 13 July 2020

Read more at the International Consortium of Investigative Journalists

Photo (cropped and edited): Nuno Coimbra [CC BY-SA 4.0]

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