He then committed himself to paying another US$6 million over five months for luxury modifications.
While this was happening the Swazi Government, which
he handpicked, was slashing
department budgets and public services by E1.5 billion (US$150 million) in
an attempt to keep the kingdom out of bankruptcy. Seven in ten Swazis continue
to live in abject poverty with incomes of less than US$2 per day.
In December 2010, unable or unwilling to pay his
debts, the King sold the plane to Millers Capital, a Singapore-based investment
company, for US$7.5 million – US$3.95 million less than he paid for it five
months earlier. In April
2012, he bought the plane back from Millers for US$9.5 million – US$2
million more than he had sold it. He then claimed to the Swazi people that the
plane had been donated to him by development partners.
company, for US$7.5 million – US$3.95 million less than he paid for it five
months earlier. In April
2012, he bought the plane back from Millers for US$9.5 million – US$2
million more than he had sold it. He then claimed to the Swazi people that the
plane had been donated to him by development partners.
The tangled financial history of the King’s
MacDonnell Douglas DC-9 jet (also known as MD87) was revealed in papers
at the Court of Appeal, Ontario, Canada, where the jet is being held in a
business dispute over an alleged unpaid bill of US$3.5 million for upgrades
made to the plane.
Papers presented to the court on 9 April 2015 revealed
that on 20 May 2010, SG Air Leasing, a company incorporated in the British
Virgin Islands, sold the jet to Inchatsavane, a company whose sole shareholder
was King Mswati, for US$11.45 million. The sale was for the shell aircraft and
engines and did not include the interior.
There was an additional agreement between
Inchatsavane and Goderich Aircraft Inc (GAI) of Ontario, Canada, to modify the
interior of the aircraft for a price of US$6 million, which was to be paid by
the King’s company in instalments between 7 June 2010 and 8 November 2010.
In November 2010 GAI said that Inchatsavane was in
arrears of payments by about US$2.6 million.
A close business associate of King Mswati introduced
him to Millers Capital to assist Inchatsavane in obtaining financing to pay off
the debt.
to pay off
the debt.
On 30 December 2010, Millers Capital bought the
aircraft from Inchatsavane for US$7.5 million, of which US$3 million went to
GAI to pay off the arrears and US$4.5 million went to the King through his
company Inchatsavane.
The court papers revealed that there was a verbal
agreement between Millers Capital and Inchatsavane that the King would be
allowed to repurchase the plane at a later date for US$9.5 million.
While the King was making this secret deal to secure
the future of his private luxury jet, the Swazi economy was in free-fall. The
mismanagement of the Swazi economy was so grave that in August 2010 both the
International Monetary Fund and the World Bank refused
to support Swaziland’s attempt to raise a US$500 million loan from the
African Development Bank.
In August 2011, GAI said it was insolvent and could
not complete the upgrading of the aircraft. SG Air agreed to fund the
continuing upgrading on the understanding that the King’s company Inchatsavane
would repurchase the aircraft from Millers Capital for US$9.5 million.
The court papers stated that if Inchatsavane did not
buy back the plane, SG Air had an understanding with Millers Capital that the
aircraft would be sold and SG Air would recover its expenses from that sale.
As of 17 April 2012, the costs paid by SG Air on
behalf of Inchatsavane for the modifications to the jet totalled US$3.275
million.
SG Air paid a further US$1.37 million in connection
with repairs and improvements to the plane. This took the total amount payable
to more than US$4.6 million.
The upgrades were all to increase the luxuriousness
of the jet and had nothing to do with ensuring the King’s security. The court
papers stated the jet had nothing in it ‘making it unique or necessary for HMK
[His Majesty the King] to conduct any state / sovereign business’.
The papers added the aircraft had, ‘no missile
detection system, no military radar, no
ammunition resistant steel, no in-flight refuelling connection, nor does it
have any advanced avionics and defences or electronic counter measures to
interfere with enemy radar.
‘Practically speaking, the aircraft is an “ordinary”
airplane retrofitted with luxury amenities.’
The King through his company Inchatsavane repurchased
the jet on 18 April 2012 for US$9.5 million from Millers capital, through
Wells Fargo in its capacity as trustee. This was in line with the verbal
agreement they had made in December 2010.
The government which is hand-picked by King Mswati,
who rules Swaziland as sub-Saharan Africa’s last absolute monarch, made several
public statements in April 2012 to say the jet had been donated to the King as
a gift by ‘development partners’.
This was the first public announcement made about
the plane, although it had originally been purchased nearly two years earlier
in May 2010.
The King’s Prime Minister Barnabas Dlamini, said
on government-controlled radio that the King had been given the jet as a
birthday gift, ‘from development partners and friends of the King, to be used
by their majesties for travels abroad’.
Government spokesperson Percy
Simelane said at the time, ‘The donor has asked to remain anonymous and we
stand by that agreement. We don’t owe anybody an apology for having been
lucky to have someone purchase a jet for the King.’
In April 2015, the court papers stated that although
Inchatsavane had not remitted the outstanding monies owed, SG Air did not press
for payment ‘aggressively’. But, by November 2014, more than
two-and-a-half-years after the plane’s repurchase, SG Air told the King it was
‘imperative’ that it be repaid.
To facilitate a speedy resolution, SG Air agreed
with King Mswati that US$3.5 million should be paid to SG Air as ‘full and
final’ settlement of the costs in connection with the aircraft. By making this
offer, SG Air wrote off US$1.1 million of the debt.
By 16 December 2014, the debt
had not been paid and SG Air succeeded in obtaining an attachment for
unpaid debts of the aircraft which was in Goderich, Ontario, for routine
maintenance. The plane remains attached
by the court.
The Court of Appeal in Ontario is expected to have a
further hearing on the case on 11 June 2015.
See also
See also
SWAZI KING NOT ABOVE LAW IN CANADA
SWAZI KING IS ABOVE THE LAW, COURT TOLD
WHO PAID FOR SWAZI KING’S JET
REVEALED:
COST OF FLYING KING’S JET
SWAZI MPs CONFUSED OVER KING’S JET
REVEALED:
DETAILS OF KING’S NEW JET
KING'S COMPANY AT CENTRE OF JET ROW
SWAZI KING ‘REFUSED TO PAY JET DEBT’
SWAZI KING’S JET HELD FOR UNPAID DEBTS
‘SWAZI KING TO BUY US$44m PRIVATE JET’
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