A mining company sought to open doors throughout West Africa with bribes, a huge leak of internal emails shows
Senior politicians in the governments of Guinea and Liberia took bribes from the publicly quoted British company Sable Mining Africa Limited to facilitate access to valuable mining concessions, a leak of internal company emails and documents has revealed. The data detail how Sable Mining, which is listed on the Alternative Investment Market (AIM) of the London Stock Exchange, sought favours and were leaked to the anti-corruption campaign group Global Witness and seen by Africa Confidential. AC conducted additional research.
Sable, which was founded by a former England cricketer Phil Edmonds, and Zimbabwean mining entrepreneur Andrew Groves, has been an AIM darling for years. Here, we focus on what the leaked information says about Sable's activities in Liberia and Guinea.
Liberia's go-to lawyer for foreign firms looking to set up business in the country is the well-connected Varney Sherman, who founded the firm Sherman & Sherman. A former presidential candidate, Harvard Law School graduate and now Chairman of the governing Unity Party (UP), Sherman was instrumental in securing Sable a foothold in the country and, according to the leaked documents, helped to obtain a change in the law in Sable's attempts to acquire the Wologizi iron ore deposit. One leaked document lists payouts to officials from Sable's account with Sherman's law firm to ease the passage of the law.
Groves and Edmonds entered Liberia in April 2010 after buying a minority stake in Delta Mining Consolidated Ltd. and undertaking to buy a majority stake. An exploration and development company already established in Liberia, DMC was run by South African businessman Heine van Niekerk. Sable moved into the Shermans' offices in a pink two-storey villa near the Royal Grand Hotel in order to set up operations.
DMC's reputation in Liberia had already been tarnished after a scandal emerged around its bid for the Western Cluster iron-ore concession in 2008. The company was alleged to have paid kickbacks to the late Willis Knuckles, then a senior minister, in exchange for help in gaining access to the valuable resource. Delta was disqualified amid bribery allegations but cleared of corruption after a meeting at the presidential palace (AC Vol 49 No 2, Graft never really went away0).
The concession was eventually granted to an Israeli firm, Elenilto Minerals and Mining, in January 2011 (AC Vol 52 No 15, Honesty – not the easiest policy). Elenilto and DMC were bitter enemies. Headed by Amir Nagammy, Elenilto is a subsidiary of Israeli Jacob Engel's company Engelinvest. It won a 25-year lease on the estimated 1.1 billion tonne iron-ore deposit in a deal worth US$1.6 bn. Just seven months later, Elenilto sold a majority stake in the concession to Sesa Goa, a subsidiary of Indian mining giant Vedanta Resources.
The deal was facilitated by Eugene Shannon, Liberia's former Lands, Mines and Energy Minister. President Ellen Johnson-Sirleaf sacked him and half of the cabinet in 2011, despite having been an ally of the President and in exile with her in Côte d'Ivoire in the 1990s. Shannon's removal followed his role in the Western Cluster tender, which attracted negative attention from diplomats and activists.
According to the leaked emails, Shannon helped Sable by lobbying Morris Saytumah, an adviser and confidant of the President, to write a backdated letter to further its campaign to win assets, including the Wologizi deposit. Shannon received $5,000 from Sable, which he denies. Shannon did obtain Saytumah's letter, backdated to April 2009, which then went to Sable, presumably to help in its lobbying for the concession.
Saytumah, a former chief negotiator, was investigated by Liberia's Dunn Commission after the Knuckles scandal, which saw him resign as Presidential Adviser after emails emerged soliciting payment for government contracts. In the letter which Sable gave to Shannon, Saytumah wrote, 'the Government will assist the Delta Mining Consolidated in its bid for any iron ore reserve that it may be interested in and has the technical and financial capacity to operate.' Saytumah is one of a string of senior Liberian officials named in a spreadsheet listing payments made by Sherman and Sherman from Sable's account with them. The spreadsheet was emailed to Sable in August 2010.
According to the leaked email, Saytumah received $50,000. The spreadsheet, dated August 2010, also includes payments of $50,000 to Richard Tolbert (a former Wall Street banker and nephew of President William Tolbert, murdered in 1980), who headed the National Investment Commission (AC Vol 47 No 2, In cabinet). The sum of $10,000 went to Professor Willie Belleh Junior, Chairman of the Public Procurement and Concessions Commission and former Chief of Staff of the National Transitional Government. Interestingly, the spreadsheet also included a $75,000 entry for 'Payment (facilitation) revised PPCC act', a change in Liberian law which would allow Sable to get closer to winning the Wologizi iron deposit.
Belleh wrote to Varney Sherman on 10 August, saying: 'We finally got the revised PPCC Act completed. The Minister of Justice and I met with the President last night and reviewed areas of concern to her. She approved. The document has been forwarded to the National Legislature. It is expected to be fast-tracked.' There is no suggestion that the then Justice Minister, Prof. Christiana Tah, or the President knew about the bribes.
The new PPCC Act was passed, containing a loophole which allowed Sable the possibility of winning the Wologizi deposit without participating in an open tender, which the company was not confident it would otherwise win. However, despite allegedly distributing close to $1 million in bribes and questionable payments, Sable did not win the Wologizi concession. It did win the Kpo Range iron-ore concession, which remains undeveloped by the company.
Varney Sherman is no stranger to controversy. He admitted on Liberian television on 12 November 2012 that he had taken $30,000 from a Danish investigative journalist, Mads Brügger. His film, The Ambassador, in which he travelled around Africa pretending to be a conflict-diamond buyer while using a genuine Liberian diplomatic passport, caused huge embarrassment in the country (AC Vol 53 No 23, What price the Unity Party). Sherman claimed then that he was acting only in a professional capacity.
Despite question marks over his business dealings, Sherman has provided legal counsel to a huge number of prominent companies seeking to do business in Liberia, including United States' oil major Chevron, rubber giant Firestone and Sable's iron-ore mining rival, ArcelorMittal. He has also harboured political ambitions and came fifth in the presidential race in 2005 before becoming UP Chairman in April 2010, just three weeks after a $200,000 payment had been made from Sable's account, the leaked documents say. It was listed as 'political contribution – UP convention' (AC Vol 51 No 10, A second term for Sirleaf).
Money from Sable is alleged to have helped Sherman to shape the party he wanted, persuading the otherwise recalcitrant Henry Fahnbulleh to step down. Local press described Fahnbulleh as 'the face of the party's youth' and he was elected UP General Secretary at the same convention that elected Sherman Chairman. A $25,000 payment labelled 'political contribution – UP secretary general resignation' left Sable's account on 24 June. Sherman was arguing that Fahnbulleh was too closely related to him to hold such a high post in the party and wanted him to resign but Fahnbulleh refused, saying he would rather die. Just one day after the money left Sable's account with Sherman and Sherman, though, Fahnbulleh stepped down. He said he had been leant on by elders from his home region.
When allegations of misconduct around its operations in Liberia emerged in 2011, Sable conducted an internal investigation, led by its Compliance Officer, Salans LLP lawyer Caroline Havers, and accountancy firm Baker Tilly. The audit found no evidence implicating the Board and Sable says that any questionable payments were solely the responsibility of DMC, in which it held only a minority stake at the time. As a result of the audit, all further payments from Sable to DMC had to be approved by the Compliance Department, and DMC was not bought out by Edmonds and Groves in its entirety.
Emails in the leaked cache show that Sherman sent the spreadsheet of accounts to Sable Chief Executive Groves, detailing payments to ministers and officials in the Liberian government, who were identified by name. The money was transferred to Sherman from Salans, Sable's London law firm, which has since merged into Dentons, reportedly the world's largest multinational law firm. Sherman, Tolbert and Belleh have all denied any wrongdoing and Saytumah could not be reached for comment. Sherman acknowledged that certain payments had been made from his client account for Sable but would not elaborate, saying it was confidential.
Sable's lawyer at Salans said that it simply transferred funds on its client's instructions to a client account of another law firm and had no knowledge or reason to know for what purpose.
The Guinea stamp
Sable Mining formally entered Guinea in 2010, when it made an agreement to buy three research licences for iron-ore deposits close to the town of Kissidougou, in the south-east, near the huge Simandou iron-ore deposit. At the time, Simandou was being developed by Rio Tinto and Vale-Beny Steinmetz Group Resources (BSGR; the joint venture was called VBG). The deposits were held by Guinea Development Mineral Resources, a company with close ties to the former General Manager of Guinea's mining fund, Baïdy Aribot.
Sable's arrival coincided with the first multiparty presidential election, which long-time opposition leader Alpha Condé and his Rassemblement du peuple de Guinée (RPG) party won.
Leaked emails show how Sable's man in Conakry, Aboubacar 'Bouba' Sampil, helped Groves to get close to the man who would soon become President and his son, Mohamed Alpha Condé.
Sampil, a businessman, former banker and President of the football club Association Sportive Kaloum Star who boasts a close, longstanding relationship with the Condés, is the Director of Sable's Guinean subsidiary, West Africa Exploration SA. Sampil is well known in mining circles for his ability to 'lubricate' the process of obtaining permits with the Presidency, a role he took on for Sable as well as other foreign interests in Guinea, including Russian aluminium giant Rusal (AC Vol 56 No 16, The Sampil truth).
At a time when many of the country's largest mining projects were delayed by regulatory hold-ups, Sable's remarkably rapid progress – which included securing a coveted presidential decree to export ore in 2013 from its Nimba iron project in Liberia – was largely attributed to Sampil's enviable access to the presidential family (AC Vol 56 No 5, A dream deferred). The President denied receiving bribes, while a representative of Mohamed Condé said that if he had received any benefit from Sable, it was travel or consultancy fees only.
The leaked emails reveal how instrumental Sampil was in obtaining licences for Sable and how broad the company's interests in Guinea were, with ambitions to develop manganese and even oil projects, as well as iron-ore. They also show how Sampil used his connections and Sable's money to move on the company's ambitions.
A string of emails from Sampil to Sable in August 2010 show him asking repeatedly for money, supposedly to be paid into the account of Mohamed Alpha Condé, to pay contacts at the Mines Ministry in Conakry for information.
In an email to Heine van Niekerk, Sampil says: 'Do not forget the budget for people who are working for us here. every day they are calling me. [You] don't want [your] brother to have hard [a] time with people.'
In another email to Van Niekerk, Sampil warns Sable to move quickly, as the price of bribes will skyrocket: 'Once we get there on a private plane with the presi [sic], the future head of the country and 2 'big shots' from a big western company, trust me, prices will inflate like crazy. Folks in the admin will try to get a lot more for each step, leading to a minimum of $500,000 not including the ministers [sic] share.'
In the same period, the run-up to the October 2010 elections, the leaked documents also show that Sable paid for flights from Conakry to Paris and back to various places in Africa for both Condé Senior and his son. Plane tickets and emails in the leaked cache suggest that Groves took a flight at least once with Alpha Condé during his presidential campaign.
Condé was re-elected for a second term last October in the first round of voting. His son, also known by his initials as 'Mac', remains a Special Advisor to the President and is reported to have close links with various entrepreneurs apart from Sampil, including a number of Brazilian firms.
On top of a $120,000 annual salary for his services to Sable, Sampil's Faniya Resources was paid $6 mn. by Sable in 2014 as a fee for 'consultancy services', an amount which made the headlines in the United Kingdom and Guinea. Sable defended the payments saying they were 'fully justifiable and have been disclosed fully', and that Sampil was not a person holding any public office. Sampil is understood to have since invested heavily in property in France and the USA. He declined to comment on any of the allegations.
The Guinean government has said that any payments made by Sable to Condé Junior would have been 'for consultancy fees and for flight reimbursement' but that he was not the recipient of bribes or illicit payments.
Edmonds, Groves and Sable, which is now chaired by Jim Cochrane, former head of marketing at the Eurasian Natural Resources Corporation, have strongly denied any wrongdoing and say that the emails were leaked by former employees seeking revenge and may not be reliable evidence. Any bribes paid in Liberia and Guinea by Sable took place before the UK Bribery Act came into force in 2010.
On 22 April, Edmonds stepped down as Chairman of Guernsey-registered Agriterra, the last high-profile position he held with Groves. It was also the day of the deadline that Global Witness had set for a response to the allegations which it had put to him.
A Global Witness representative said: 'Edmonds' and Groves' scams worked because no one was watching: regulators didn't scrutinise, lawyers didn't probe, accountants didn't ask. Gaping holes in the financial system let them hide their bribes and deceptions in plain sight.'
The Deceivers is published by Global Witness and is available on its website from 12 May.
Copyright © Africa Confidential 2018
Prepared for Free Article on 23/01/2018 at 21:33. Authorized users may download, save, and print articles for their own use, but may not further disseminate these articles in their electronic form without express written permission from Africa Confidential / Asempa Limited. Contact firstname.lastname@example.org.