The office of King Mswati III has fallen for a US$5 billion con trick over a coal powered electricity plant.
The king’s advisory body Liqoqo bypassed the Swaziland Parliament to set up the deal with international aid donors.
Now, it has been realised there was no money and the scheme was a con to ‘launder money’.
It revolves around a nonexistent company called Franken Mining. Regular readers of this blog will remember that in April 2009 I wrote that King Mswati III had secured this amount to pay for Franken Mining to build coal power stations, but suspicions were aroused because no one could trace a company called Franken Mining.
The waters got murkier when it was revealed that the Swazi Government had not been involved in any negotiations over the project: instead King Mswati deliberately by-passed ministers and his office made the deal itself.
Myself and others working independently tried to piece together the background to this deal. Chief among our concerns was that US$5 billion was said to be available through donor aid to pay for two coal-powered electricity generating stations to be built in the kingdom but there was no evidence about which international donor agencies have contributed the funding or what process was gone through before awarding the contract to Franken.
We were all right to be suspicious, because no such company existed. It was a con – but it has taken 20 months for the King’s office to work it out.
A report yesterday (5 December 2010) in the Times Sunday, an independent newspaper in Swaziland, reports Prince Mangaliso-Logcogco, the chair of Liqoqo, saying that the main intention for the unnamed donors to finance the projects in Swaziland was to gain tax relief for their respective companies and associations.
They were to apply to the US and some governments affiliated to the European Union (EU) that their companies be granted tax relief because of their involvement in humanitarian activities in developing countries across the globe.
‘We discovered that they were a syndicate hell-bent on money laundering tactics when we checked their genuineness. I can confirm that the projects we announced last year will not take off. We can’t deal with those people who wanted to help us because their financial activities are not so clean,’ Prince Mangaliso-Logcogco told the newspaper.
What isn’t fully explained is why the Prince ever thought Franken was legitimate. There was no trace of their company anywhere and the amount of money it claimed to have to invest was so huge – about five times the size of Swaziland’s annual budget.
Also at the centre of the deal was Professor Frans Whelpton, of the University of South Africa. He was supposed to be the middle man between the Swazi Government and Franken. According to Prince Mangaliso-Logcogco in 2009, Whelpton was to invest and manage the US$5 billion.
Now, the Prince says Whelpton was also a victim of the con. Whelpton made the news last month (November 2010) when another project he was involved in – to secure E400 million in development aid as part of a deal to get back E28 million deposit for a private jet for the king – was announced to be a failure.