A syndicate founded by well-connected Cantonese entrepreneurs and their African partners, including Sonangol's chairman and tipped-to-be next President of Angola Manuel Vicente, may have taken control of one of China's most important trade channels and diverted billions of dollars to a few dozens of pockets, an article on The Economist suggests.
'Operating out of offices in Hong Kong’s Queensway, the syndicate calls itself China International Fund or China Sonangol. Over the past seven years it has signed contracts worth billions of dollars for oil, minerals and diamonds from Africa. These deals are shrouded in secrecy. However, they appear to grant the Queensway syndicate remarkably profitable terms. If that is right, then they would be depriving some of the world’s poorest people of desperately needed wealth. Because the syndicate has done deals with the regimes in strife-torn places, such as Zimbabwe and Guinea, it may also have indirectly helped sustain violent conflicts', the British magazine accuses.
'In short, it looks as if the fortunes of entire African countries depend to a significant degree on the actions of a little-known, opaque and unaccountable business syndicate', the article suggests.
Cold war friendships
The syndicate was reportedly built on links forged during the cold war between a Chinese national named Sam Pa (born Xu Jinghua) and the African counterparts he met at a Soviet academy in Baku (also attended by Angola's President Dos Santos). Sam Pa is believed to exert control over the syndicate through Veronica Fung, rumoured to be a member of his family. 'She controls 70% of a core company, Newbright International. The two frequently travel in Africa, using the syndicate’s fleet of Airbus jets. They are said sometimes to bypass customs', The Economist tells.
The remaining 30% of Newbright is controlled by the daughter of a Chinese general, Lo Fong Hung, married to Wang Xiangfei, a well-connected banker. 'Although the Queensway syndicate has sometimes been suspected of being an arm of the Chinese government, there is little evidence of that', the magazine states.
'Indeed, it has often been the butt of criticism from Chinese officials. More likely it was set up to take advantage of a new strategy by the Chinese government, known as the “going out” policy', is read on the article.
Much promised...
Sam Pa teamed up Hélder Bataglia, a Portuguese trader who had grown up in Angola and had links to Latin America, to invest both in Africa and South America. While contacts with Argentina and Venezuela turned out to be fruitless, the syndicate signed several deals with African countries like Angola, Zimbabwe and Equatorial Guinea, to trade minerals for infrastructure — 'in return for commodities, Chinese contractors would build housing and highways', The Economist explains.
In late 2004, Pa travelled to Angola and reportedly persuaded the Angolan elite to channel the country's growing oil exports to China through a new joint venture, called China Sonangol. Mr Vicente, boss of Angola’s Sonangol, reportedly became CS's chairman. President Dos Santos son is rumoured to be a director at CS as well. Contracts, signed in 2005, gave the company the right to act as 'a middleman between Sonangol and Sinopec, one of China’s oil majors'.
'China Sonangol threw itself into the business, according to Angolan oil ministry records and applications for bank loans backed by oil shipments. The official statistics are incomplete, but good sources have concluded that almost all of China’s imports of oil from Angola—worth more than $20 billion last year—come from China Sonangol. By contrast, China’s state-owned oil companies have no direct interest in Angolan oilfields, one of their two biggest sources of crude. Their names do not show up on the map of concessions'.
'By 2009 the Queensway syndicate spanned the globe from Tanzania and Côte d’Ivoire to Russia and North Korea and on to Indonesia, Malaysia and America. It had bought the JPMorgan Chase building at 23 Wall Street in New York'.
...little done
At the same time, Angola and Sonangol are rumoured to have lost millions while dealing with China through the Hong Kong-based company: 'The terms under which China Sonangol buys oil from Angola have never been made public. However, several informed observers say that the syndicate gets the oil from the Angolan state at a low price that was fixed in 2005 and sells it on to China at today’s market prices. The price at which the contract was fixed is confidential, but Brent crude stood at just under $55 a barrel in 2005; today it is trading above $100. In other words, the syndicate’s mark up could be substantial. Over the years, considering the volume of oil that is being sold to China, its profit could amount to tens of billions of dollars'.
According to data from the IMF and the World Bank quoted by The Economist, 'billions of dollars have disappeared from Sonangol’s accounts'.
While Dos Santos, Manuel Vicente and other Angolan, Chinese and Portuguese individuals are accused by The Economist of making billions out of the Queensway scheme, Angola signed a 'bad deal'. Six years after the syndicate arrived in Luanda, more than 90% of the residents of the capital remain without running water and most of the much promised infrastructure hasn't been built.
Dos Santos, Vicente and other mentioned individuals have reportedly refused to talk to The Economist. In Angola, Portugal and China there was little - if any - coverage or reaction to the article.
'Operating out of offices in Hong Kong’s Queensway, the syndicate calls itself China International Fund or China Sonangol. Over the past seven years it has signed contracts worth billions of dollars for oil, minerals and diamonds from Africa. These deals are shrouded in secrecy. However, they appear to grant the Queensway syndicate remarkably profitable terms. If that is right, then they would be depriving some of the world’s poorest people of desperately needed wealth. Because the syndicate has done deals with the regimes in strife-torn places, such as Zimbabwe and Guinea, it may also have indirectly helped sustain violent conflicts', the British magazine accuses.
'In short, it looks as if the fortunes of entire African countries depend to a significant degree on the actions of a little-known, opaque and unaccountable business syndicate', the article suggests.
Cold war friendships
The syndicate was reportedly built on links forged during the cold war between a Chinese national named Sam Pa (born Xu Jinghua) and the African counterparts he met at a Soviet academy in Baku (also attended by Angola's President Dos Santos). Sam Pa is believed to exert control over the syndicate through Veronica Fung, rumoured to be a member of his family. 'She controls 70% of a core company, Newbright International. The two frequently travel in Africa, using the syndicate’s fleet of Airbus jets. They are said sometimes to bypass customs', The Economist tells.
The remaining 30% of Newbright is controlled by the daughter of a Chinese general, Lo Fong Hung, married to Wang Xiangfei, a well-connected banker. 'Although the Queensway syndicate has sometimes been suspected of being an arm of the Chinese government, there is little evidence of that', the magazine states.
'Indeed, it has often been the butt of criticism from Chinese officials. More likely it was set up to take advantage of a new strategy by the Chinese government, known as the “going out” policy', is read on the article.
Much promised...
Sam Pa teamed up Hélder Bataglia, a Portuguese trader who had grown up in Angola and had links to Latin America, to invest both in Africa and South America. While contacts with Argentina and Venezuela turned out to be fruitless, the syndicate signed several deals with African countries like Angola, Zimbabwe and Equatorial Guinea, to trade minerals for infrastructure — 'in return for commodities, Chinese contractors would build housing and highways', The Economist explains.
In late 2004, Pa travelled to Angola and reportedly persuaded the Angolan elite to channel the country's growing oil exports to China through a new joint venture, called China Sonangol. Mr Vicente, boss of Angola’s Sonangol, reportedly became CS's chairman. President Dos Santos son is rumoured to be a director at CS as well. Contracts, signed in 2005, gave the company the right to act as 'a middleman between Sonangol and Sinopec, one of China’s oil majors'.
'China Sonangol threw itself into the business, according to Angolan oil ministry records and applications for bank loans backed by oil shipments. The official statistics are incomplete, but good sources have concluded that almost all of China’s imports of oil from Angola—worth more than $20 billion last year—come from China Sonangol. By contrast, China’s state-owned oil companies have no direct interest in Angolan oilfields, one of their two biggest sources of crude. Their names do not show up on the map of concessions'.
'By 2009 the Queensway syndicate spanned the globe from Tanzania and Côte d’Ivoire to Russia and North Korea and on to Indonesia, Malaysia and America. It had bought the JPMorgan Chase building at 23 Wall Street in New York'.
...little done
At the same time, Angola and Sonangol are rumoured to have lost millions while dealing with China through the Hong Kong-based company: 'The terms under which China Sonangol buys oil from Angola have never been made public. However, several informed observers say that the syndicate gets the oil from the Angolan state at a low price that was fixed in 2005 and sells it on to China at today’s market prices. The price at which the contract was fixed is confidential, but Brent crude stood at just under $55 a barrel in 2005; today it is trading above $100. In other words, the syndicate’s mark up could be substantial. Over the years, considering the volume of oil that is being sold to China, its profit could amount to tens of billions of dollars'.
According to data from the IMF and the World Bank quoted by The Economist, 'billions of dollars have disappeared from Sonangol’s accounts'.
While Dos Santos, Manuel Vicente and other Angolan, Chinese and Portuguese individuals are accused by The Economist of making billions out of the Queensway scheme, Angola signed a 'bad deal'. Six years after the syndicate arrived in Luanda, more than 90% of the residents of the capital remain without running water and most of the much promised infrastructure hasn't been built.
Dos Santos, Vicente and other mentioned individuals have reportedly refused to talk to The Economist. In Angola, Portugal and China there was little - if any - coverage or reaction to the article.
