27 Feb 2020
In the dry, warm Angolan autumn of 2014, billionaire Isabel dos Santos and her husband, Sindika Dokolo, dreamed of beer. Lots and lots of beer.
Dos Santos, the Angolan president’s favorite daughter, had long pined for a brewery of her own to break into the southern African country’s lucrative drinks market. Angolans have a “happy-go-lucky attitude towards life” that favored a new competitor, according to a confidential project memo prepared by bankers backing dos Santos. The brewery, in Bom Jesus, 40 miles southeast of Luanda, could generate $80 million in sales by 2021, bankers predicted.
Dos Santos’ brewery would serve Angola’s elite and working-class with local brands and the well-loved Portuguese lager, Sagres, owned by Dutch giant Heineken. It would produce 1.2 million hectoliters of beer a year, according to predictions. Her father’s government had already endorsed the venture by granting her company a 10-year income tax holiday.
The brewery masterplan hinged on one of the couple’s favorite business entities: shell companies. This time, companies in Mauritius, the small island tax haven off the east coast of Africa, would be key. The couple owned or held shares in eight companies on the island, according to an analysis by the International Consortium of Investigative Journalists.
The role of Mauritius in the dos Santos empire is revealed through Luanda Leaks, a trove of financial and business records obtained by the Platform to Protect Whistleblowers in Africa and shared with ICIJ. Analysis of the documents by ICIJ and its media partners reveals the inside story of how Africa’s wealthiest woman moved hundreds of millions of dollars in public money out of one of the poorest countries on the planet and into a labyrinth of companies and subsidiaries, many of them in offshore secrecy jurisdictions around the world.
Despite its small size, said Mustapha Ndajiwo, a former Nigerian tax official and founder of the African Center for Tax Governance, “Mauritius maintains its reputation as one of the most notorious tax havens.”
Dos Santos’ father, José Eduardo dos Santos, ruled Angola for 38 years, and has remained an influential figure since retiring from the presidency in 2018.
Her business dealings with Mauritius is an example of how offshore havens — often populated by accountants and lawyers and other operatives from the United Kingdom, the United States and other wealthy nations — help the mega-rich and corporations shield their assets from African tax collectors.
Jason Rosario Braganza, a Kenyan economist and tax justice advocate, told ICIJ that the financial dealings unearthed through Luanda Leaks are “a vivid reminder that it is not ‘corrupt Africa’ but instead complicit ‘Europe and North America’” that drive “the willful undermining of domestic laws and regulations.”
Dos Santos’ beer plan, prepared with the aid of London-headquartered tax advisers PwC and one of Mauritius’ richest families, involved funding from banks, private investors and the Angolan government.
Dos Santos and Dokolo would also invest in the new Angolan company, Sodiba Lda., through three of their companies, according to a PowerPoint presentation. The first, Sodiba SA, was in Angola. The second, Alcea Ltd., was registered in Malta at a five-story office building not far from a beachfront casino. Saguaro Management Ltd., the third and most secretive of all, was in Cybercity in central Mauritius.
Saguaro Management, created in 2006, was key. A document from Luanda Leaks, signed on Sept. 21, 2016, confirms that a second Mauritius company, Sun Wukong Services Ltd., held shares as a “nominee” in Saguaro Management for dos Santos and Dokolo. This arrangement made sure dos Santos’ name would not appear on public documents, but guaranteed the couple full control of the company and of any money it made.
Mauritius does not keep a public record of who owns companies on the island. The only information published online about Saguaro Management is its official address and the date it was created.
Adam Hofri-Winogradow, an expert in the law of offshore jurisdictions at Hebrew University of Jerusalem, said the secretive structure was “pretty shabby planning” that was clearly “intended to disguise Ms. dos Santos’ interest in the company.”
Mauritius is a well-known trust destination, said Hofri-Winogradow. His recent research shows that Mauritius ranked fifth among jurisdictions outside the United States that impose few, if any, restrictions on a person’s freedom to design a trust.
“The higher the ranking, the more devices and tricks the law of the jurisdiction in question offers,” said Hofri-Winogradow.
Mauritius denies that it is a tax haven. The government has previously told ICIJ that it “is compliant with international norms and standards.”
Helping dos Santos and Dokolo become Angola’s newest beer barons was ABC Global Management Services.
By Will Fitzgibbon, ICIJ, 25 February 2020
Read more at the International Consortium of Investigative Journalists
RiskScreen: Eliminating Financial Crime with Smart Technology
Advance your CPD minutes for this content, by signing up and using the CPD WalletFREE CPD Wallet