A judge is then expected to make a final ruling on whether the King must pay.
This
should bring to a conclusion a story that began in May 2010 when, in the depths
of Swaziland’s worst financial crisis in its history, King Mswati III secretly
bought himself a private jet for US$11.45 million.
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.
The tangled financial history of
the King’s MacDonnell Douglas DC-9 jet (also known as MD87) has been revealed
in papers at the Court of
Appeal, Ontario,
Canada.
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 to obtain
financing 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 of the plane for unpaid debts of the aircraft which was
in Goderich, Ontario, for routine maintenance. The plane was eventually released after the Swazi Government delivered
a letter of credit for US$3.5 million which is being held in trust in a bank
until the court case is concluded. This guarantees the King will be able to pay
the debt if the court orders him to.
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’
http://swazimedia.blogspot.com/2015/04/swazi-king-to-buy-44m-private-jet.html
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