We have seen some crazy things in Zimbabwe which make it hard to believe the ‘Zimbabwe is open for business’ mantra. It may be open but it sure is hard to do business over here. This is not unique to Zimbabwe though.
Over the African continent we have powerful people who use their connections to do whatever they want. They use this power to take over other people’s companies (or farms), loot public funds and as MTN has found out, to settle squabbles with some of your related parties.
Imagine that. Someone has a dispute with your countryman and seizes your assets to force your countryman’s hands. Or more accurately, to force your government to intervene and force your countryman to do right by him. That’s what MTN is going through.
Ahmadou Baba Danpullo
A powerful Cameroonian businessman, Ahmadou Baba Danpullo, with an estimated net worth of over US$900m has lived in South Africa for 35 years.
He took R520 million (US$28.2m) in loans from FNB and cut to a few years later, his properties worth R4 billion (US$218m) were seized and liquidated over the loan. I have to admit, that is a headscratcher, and here is how Danpullo puts it,
FNB decided to ruin me and obtained a judicial liquidation of all my real estate valued at R4 billion for the recovery of R520 million,
Just the math of it is hard to understand however, Danpullo claims he never missed any repayments and so was shocked that FNB pulled this stunt off, even getting the justice system to go along with it.
You have to admit that if the above is accurate and you were Danpullo, you would use every connection you have to get justice.
You may be wondering how MTN fits into this picture. MTN shares a shareholder with FNB. South Africa’s national pension fund, the Public Investment Corp. Ltd., is a shareholder in both FNB and MTN, with a 17% share in MTN.
MTN happens to operate in Danpullo’s home country of Cameroon. In fact, MTN is the largest mobile network operator in the country.
I think you now see how we got to the title, “MTN has had $22 million frozen in Cameroon since September 2022.”
Danpullo used his power to get MTN and some other South African companies’ accounts frozen in Cameroon.
We have gone past freezing now. The accounts have been garnished now. A Cameroonian court ordered banks used by MTN to transfer its funds into escrow.
MTN is feeling the heat owing to the freeze. MTN Cameroon CEO says they are struggling to pay suppliers and employees because of it.
What say ye?
This is a bizarre story. It appears Danpullo was screwed over by FNB and the South African justice system. To correct that injustice, further injustices had to be visited upon MTN and other South African companies.
I’m thinking of MTN shareholders excluding the pension fund. They own 83% of MTN and yet their company has its accounts frozen over some third party’s dispute with a shareholder who owns 17% of their company.
Imagine owning 83% of a venture and having the guy who owns 17% cause your accounts to be frozen. It’s mental. Not if you are Danpullo though. I would do the same in his position.
I just don’t know if the Cameroonian justice should indulge him. That’s one way to get investors to steer clear of your country. South Africa’s foreign ministry has pointed this out,
Unfortunately, these latest developments will challenge the extent and appetite for investments into Cameroon
I would argue the same applies to South Africa. The liquidation of Danpullo’s properties looks a bit off. I imagine there are details we do not have but if I were an investor sitting on the kinds of monies Danpullo has, I would be concerned about investing in South Africa.
Say what you want about Africa. It may be tough to live here but it is hella entertaining.