DRC: Albert Yuma and Dan Gertler in complex Gécamines loan dispute
The financial dispute pitting Gécamines against Israeli businessman Dan Gertler, who remains under US sanctions, is on the verge of taking a political turn. Here is our in-depth look at this complex legal case.
The case is being taken seriously at the highest echelons of government.
In a statement made on national television on 27 December 2019, Félix Tshisekedi spoke of a “serious matter” and declared that he urged the courts “to do their job” to resolve the complex case involving considerable sums of money (€200m was cited) and the major mining company Gécamines, a fully state-owned private enterprise.
Two men are at the centre of this legal power struggle which is on the verge of becoming political: Gertler, an Israeli businessman who has been subject to US sanctions since December 2017, and Albert Yuma Mulimbi, a close ally of Joseph Kabila who was reappointed by Tshisekedi as chairman of the board of directors of Gécamines.
To understand the imbroglio that has led to widespread speculation in Kinshasa, we have to go back to October 2017.
At that time, Gertler’s company Fleurette Mumi Holdings Ltd. agreed to loan the Gécamines mining company €200m, although the loan ultimately totalled €128m.
However, in April 2018, when the loan was due, the Congolese mining giant refused to pay it back, arguing that US sanctions applying to Gertler since December 2017 prevented it from doing so.
The US Treasury accused the businessman close to the Kabila regime of having taken advantage of “his relationship with the Congolese head of state to act as an intermediary in the sale of mining assets in the Democratic Republic of Congo (DRC), forcing multinational companies to go through Gertler to do business with the Congolese state.”
The US authorities had even calculated the damages, asserting that “the DRC had lost out on $1.36 billion in potential revenue due to the rock-bottom sale of these assets to offshore companies connected to Gertler.”
Questions about the legitimacy of the sanctions
A worker stands guard at the Grande Cimenterie du Katanga cement plant, owned by Gécamines, in Likasi.
The problem is that, meanwhile, the loan taken out by Gécamines from Fleurette Mumi has been transferred to another Gertler-owned company, Ventora Development Sasu.
The company has taken the case to a Congolese court to recover the €128m loan and the Lubumbashi Commercial Court ruled in its favour in a decision dated 14 November 2019. Gécamines, which refuses to pay Gertler as long as he is the target of US sanctions, has appealed the ruling.
The legal battle has led to a second dispute regarding the interpretation of the very legitimacy of the US sanctions.
According to Ventora, “the US sanctions on which Gécamines has based its claim of force majeure are the decision of a foreign country which has no legal or regulatory bearing on the territory of a sovereign state such as the DRC.”
According to the Congolese mining giant’s attorney Roger Masamba, “if Gécamines pays back the loan, it could incur sanctions,” and he even indicated that it not only runs the risk of incurring “very serious sanctions for Gécamines, but also for the country’s social stability and security.”
A loan brought to the public’s attention
Above all, the legal proceedings have brought the very existence of the loan – which none of the companies involved deny – to the public’s attention. Naturally, it did not take long for the debate to zero in on how the €128m loan was used.
Several civil society organisations, such as the Congo Is Not For Sale coalition and the Congolese access to justice association (Association congolaise d’accès à la justice – ACAJ), even suspect that the loan’s sole purpose was to cover up money laundering.
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A giant with feet of clay
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Accordingly, ACAJ asked that Gécamines file a complaint against Ventora for attempted fraud, arguing that Gertler’s company did not show the mining giant any documents explaining its rights over Fleurette Mumi’s loans.
Gécamines, whose financial troubles are widely known, initially explained that it took out the loan to finance its business activities and development projects, before later assuring, with evidence in hand, that the funds had been used to pay tax advances.
Stuck in Kinshasa
In light of the uproar triggered by the case, the prosecutor’s office in Kinshasa is also looking into the controversy. Yuma, the Chairman of the Board of Directors of Gécamines, and the company’s managing director and secretary general were prohibited from leaving Kinshasa as they prepared to travel to Lubumbashi on 17 December 2019.
The company’s chief financial officer was questioned two days later during a hearing called by the public prosecutor’s office of the Kinshasa Court of Appeal.
Gécamines’ managing director and secretary general, who were in Kinshasa to take part in a meeting with the IMF, are still banned from leaving the capital.
The case, going beyond a simple commercial dispute, is now taking a political turn.
According to journalist Israel Mutala, “the presidential orders naming those who will appoint Gécamines’ new representatives are still blocked. So, everything that is weakening Gécamines’ current management team helps to highlight the urgency of enforcing these orders.”
Yuma, an ally of Kabila who was initially rejected by Tshisekedi in his search for a prime minister, is at the centre of the action. “This case involves a real power struggle between bigwigs from the old regime and the current president,” an independent source close to the case revealed.