by Fredrick Ngugi, at 02:04 pm, November 08, 2017, Business

Paradise Papers Reveal How Swiss-Angolan Tycoon Made Millions from Angola’s Public Fund

A Swiss-Angolan tycoon, Jean-Claude Bastos, is in the middle of a storm after the recently released Paradise Papers dossier revealed how he was paid over $41 million in less than two years from a special fund set aside to help the Angolan people.

While the controversial payments may not be illegal per se, they were drawn from Angola’s only Sovereign Wealth Fund – a scheme established to help Angolans invest profits made from the country’s natural resources.

Many other countries, especially in the Middle East, use similar programs to ensure they have a steady economy even during global economic shakeups. Angola is one of the largest oil producing countries in Africa, yet it’s one of the poorest.

The Angolan Fund, commonly referred to as Fundo Soberano De Angola (FSDEA), was established in 2011 with only $5 billion. But right from the start, the Fund has been stuck in controversy over its management, which comprises of the former Angolan President Jose Eduardo dos Santos’ son, Jose Filomeno, as the chairman and Jean-Claude Bastos as the asset manager.

Of interest to note is the fact that Bastos, who is the founder of an international investment company called Quantum Global Group, is a close friend of 39-year-old Filomeno.

Conflict of Interest

According to the BBC, Mr. Bastos is responsible for investing the Fund’s money, from which he obtains a salary. Currently, his investment company manages at least 85 percent of the Fund.

The Paradise Papers investigation revealed that Bastos’ firm, which is based in Mauritius, was paid by FSDEA management fees of over $90 million, which was distributed among several companies that are part of Quantum Global Group.

Paradise Papers Angola

The chronology of how the money was paid. Credit: BBC

Queried about the appointment of Bastos and his control over the Fund’s assets, FSDEA told the BBC that his appointment followed “an objective process”, insisting that his firm had shown “exemplary performance” on its previous dealings with the Angolan government.

The Fund further explained that the money paid to Mr. Bastos as management fees was in keeping with current global industry standards. In his justification, Bastos said his firm has been providing the Fund with a substantial amount of work, which has ensured enough projects are put in place for the country’s future success.

But the documents obtained by the BBC reveal that Mr. Bastos holds a personal stake in several of the investments made by the Fund on his endorsement. Experts say this presents an outright conflict of interest and it should never happen.

These revelations come on the back of a series of corruption allegations leveled against the just-retired President Jose Eduardo dos Santos. Many Angolans accuse the 75-year-old President of colluding with foreign investors to syphon the country’s resources.

Mr. dos Santos, who led Angola for 38 years, is also described as one of the most despotic heads of state in Africa. In 2012, Forbes listed him among the top five worst leaders in Africa, accusing him of running the South African nation as his “personal, privately-owned investment holding company”.

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