There is a mystery as to why King Mswati III of
Swaziland needed a US$10
million loan from the company running the Ngwenya
Iron Ore Mine.
The company had a cash-flow crisis after the King’s
representative Sihle Dlamini halted all sales of iron ore in August 2014.
When the King was asked to repay part or all of the loan to save the company he
refused. The company then went out of business owing creditors about US$4
million and more than 700 people lost their jobs.
The King asked for and was granted the loan in April
2012, shortly after he gave a mining licence to a company called Salgaocar
Swaziland to operate at Ngwenya.
Salgaocar Swaziland was the original name of SG Iron
Ore Mining (PTY) Ltd (SG Iron). SG Iron was 50 percent owned by Southern Africa
Resources Ltd (SARL), 25 per cent by the Swaziland Government and 25 percent by
King Mswati in trust for the Swazi nation.
SARL has
lodged an arbitration case claiming US$141 million against
the Kingdom of Swaziland stating that the company failed in 2014 after only
being in business for two years because the King’s representative Sihle Dlamini
halted all sales of iron ore. It said a major reason it did this was because
the King, who rules Swaziland as sub-Saharan Africa’s last absolute monarch,
did not want to repay the loan.
It also stated that the closure and subsequent court order winding up the company was an attempt by Swaziland to illegally seize the assets of the company. The Swazi High Court wound up the company in December 2014 and it was liquidated on 30 January 2015.
It also stated that the closure and subsequent court order winding up the company was an attempt by Swaziland to illegally seize the assets of the company. The Swazi High Court wound up the company in December 2014 and it was liquidated on 30 January 2015.
It is not clear why King Mswati needed the US$10
million loan, since he sits on a personal fortune amassed at the expense of his
subjects.
In August 2014 the Sunday Times newspaper in South Africa reported King Mswati
personally received millions of dollars from international companies such as
phone giant MTN; sugar conglomerates Illovo
and Remgro; Sun International hotels and beverages firm SAB Millerto.
In its report the Sunday Times said the companies, which are based in South Africa,
‘have all brokered cosy relationships with the monarchy’.
It added, ‘These companies have either given large
chunks of the shares in their Swazi businesses to Mswati directly or to
Swaziland’s investment institution, Tibiyo
Taka Ngwane over which Mswati has absolute
control.’
It reported that MTN, which has a monopoly of the
cell phone business in Swaziland, paid dividends directly to the King. He holds
10 percent of the shares in MTN in Swaziland and is referred to by the company
as an ‘esteemed shareholder’. It said MTN had paid R114 million (US$11.4
million) to the King over the past five years.
The newspaper also reported that the King was
receiving income from Tibiyo Taka Ngwane, which paid dividends in 2013 of
R218.1 million. The newspaper reported ‘several sources’ who said it was ‘an
open secret’ that although money generated by Tibiyo was meant to be used for
the benefit of the nation, Tibiyo in fact channelled money directly to the
Royal Family.
The newspaper quoted a report from Freedom House
which stated, ‘Foreign companies wishing to enter Swaziland must bribe Mswati
with shares or cash in varying amounts depending on the potential for
profitability of the proposed venture and the new business’s possible impact on
Mswati’s own business interests.’
The Sunday
Times reported that MTN had a monopoly in Swaziland and was used by 57
percent of the population. It said MTN was able to keep prices high, citing the
cost of 300 megabytes of data in Swaziland as R149, while in South Africa the
same amount of data cost R79.
King Mswati holds substantial stakes in numerous
companies. The Sunday Times said
sugar giant Illovo owned 60 percent of Ubombo Sugar and Tibiyo owned the other
40 percent. Tibiyo also owned 40 percent of Royal Swazi Spa hotel of which Sun
International held an ‘indirect’ 50.6 percent stake.
Remgro’s sugar subsidiary TSB owned a 26.4 percent
stake in the Royal Swaziland Sugar Corporation and Tibiyo held 50 percent. SAB
Miller, which owned 60 percent of Swaziland Beverages was in business with
Tibiyo, which owned the remaining 40 percent.
In 2009, Forbes magazine estimated that the King
himself had a personal net fortune worth US$200 million. Forbes also said King
Mswati was the beneficiary of two funds created by his father Sobhuza II in
trust for the Swazi nation. During his reign, he has absolute discretion over
use of the income. The trust has been estimated
to be worth US$10 billion.
All this is happening while seven in ten of
Swaziland’s tiny 1.4 million population live in abject poverty with incomes
less than US$2 a day; three in ten are so hungry they are medically diagnosed
as malnourished and the kingdom has the highest rate of HIV infection in the
world.
At the last national budget in Swaziland in 2014 the
King’s annual household budget increased by more than 10 percent to US$61m,
this was on top of the 13 percent
increase he had in 2013.
The AFP
news agency reported in May 2014 that the figure
also included provisions for construction work on palaces that would cost the
tax payer about $12.6m.
The King has taken huge increases in his slice of
the Swaziland budget in recent years.
In the Swazi national budget introduced in February
2012 King Mswati and his royal family received E210 million (US$21 million) a
year from the Swazi taxpayer for their own use. This was the same amount they
got in the financial year 2011/12, but was an increase of 23 percent over
2010/11 and a 63 percent compared with what the King took from his subjects in
2009/10.
Observers note that the King has had many chances in
the past to cut back on his spending and reduce the amount of money he takes
from his subjects, but so far he has increased his budget, rather than reduced
it. In 2011, as Swaziland hurtled towards financial meltdown, Majozi Sithole,
the then Finance Minister, in his budget demanded 10 percent budget cuts (later
increased further) from government departments, but in the same budget the
amount of money given to the King increased by 23 percent.
Despite the poverty of the kingdom, King Mswati
continues to live a lavish lifestyle. He has 13 palaces, fleets of
top-of-the-range Mercedes and BMW cars and at least one Rolls Royce.
In 2012 he acquired a private jet. He refused to say
who had paid for it, leading to speculation that the money came from public
funds.
The King travels abroad in style. In May 2012 he
went to London to visit Queen Elizabeth II for lunch
on a trip estimated to cost US$794,500.
The previous year he was in London with a party of
50 people for the wedding of Prince William and Kate Middlelton, staying at a
US$1,000 per night hotel on a trip that was also estimated
to cost US$700 000 for the hire of a private jet to take the
King and his party from Swaziland to the UK.
In 2012 Queen LaMotsa, the second of the King’s
wives, stayed at a Johannesburg hotel on a personal trip at a cost
of US$60,000
a month.
In July 2012, some of the King’s 13 wives went on a
shopping trip to Las Vegas, where 66 people reportedly
stayed in 10 separate villas – each costing US$2,400 per
night. The party were reported by South African newspapers to have travelled by
private jet which might have cost US$4.1 million.
See also
KING
AT CENTRE OF IRON MINE FAILURE
ONLY
KING GAINS FROM MINE FAILURE
HYPOCRISY
OF KING MSWATI III
http://swazimedia.blogspot.com/2012/02/hypocrisy-of-king-mswati-iii.html
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