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Satchu's Rich Wrap-Up
 
 
Thursday 04th of October 2018
 
Morning,
Africa

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China's yuan weakens past key level of 6.9 per dollar in offshore trade
Africa


Essentially, I feel we are now on the cusp of some even more violent
moves in these markets. The Dollar is going a lot higher, US interest
rates as well. If you have an interest in exploiting this then do get
in touch.

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02-DEC-2013 The Pivot to Asia bares its Fangs
Law & Politics


I see the pivot to Asia as the encirclement of China, then the
shrinking of its operating theatre and then lighting the tinderbox
that is the periphery and Xinjiang might well morph into China’s
Afghanistan.

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.@VP Pence to tell China: We will not be intimidated in South China Sea @Reuters
Law & Politics


U.S. Vice President Mike Pence, sharpening U.S. criticism of Chinese
policies around the globe, will give China a blunt warning on Thursday
that the United States will not back down from what Washington sees as
Chinese intimidation in the South China Sea.

Pence will deliver an 11 a.m. (1500 GMT) address at the Hudson
Institute think tank in Washington likely to increase tensions between
the United States and China beyond trade disputes that have dominated
President Donald Trump’s time in office.

In excerpts of his speech seen by Reuters, Pence will call attention
to an incident in which a destroyer, the USS Decatur, traveled within
12 nautical miles of Gaven and Johnson Reefs in the Spratly Islands on
Sunday.

Pence will say a Chinese naval vessel came within 45 yards (meters) of
the USS Decatur “as it conducted freedom-of-navigation operations in
the South China Sea, forcing our ship to quickly maneuver to avoid
collision.”

“Despite such reckless harassment, the United States Navy will
continue to fly, sail and operate wherever international law allows
and our national interests demand. We will not be intimidated. We will
not stand down,” Pence will say.

The operation was the latest attempt to counter what Washington sees
as Beijing’s efforts to limit freedom of navigation in the strategic
waters, where Chinese, Japanese and some Southeast Asian navies
operate.

Pence will also accuse the Chinese Communist Party of convincing three
Latin American nations to sever ties with Taiwan and recognize China.

“These actions threaten the stability of the Taiwan Strait – and the
United States of America condemns them. And while our administration
will continue to respect our One China Policy, as reflected in the
three joint communiques and the Taiwan Relations Act, let me also say
that Taiwan’s embrace of democracy shows a better path for all the
Chinese people,” Pence will say.

The United States and China are embroiled in a trade war, sparked by
Trump’s accusations that China has long sought to steal U.S.
intellectual property, limit access to its own market and unfairly
subsidize state-owned companies. The two countries have imposed
increasingly severe rounds of tariffs on each other’s imports.

Despite the tensions, Trump has said Chinese President Xi Jinping is a
friend. But at a news conference but last week in New York, he said:
“Maybe he’s not any more, I’ll be honest with you.”

In New York, Trump accused China of attempting to meddle in the U.S.
congressional elections coming up next month, while offering little in
the way of evidence. Beijing rejected the charge.

He cited a Chinese government-run media company’s four-page supplement
in the Sunday Des Moines Register of Iowa as an attempt to turn voters
in that key state against Trump’s trade policies.

Pence will say China uses “debt diplomacy” to expand its influence worldwide.

“Today, that country is offering hundreds of billions of dollars in
infrastructure loans to governments from Asia to Africa to Europe to
even Latin America. Yet the terms of those loans are opaque at best,
and the benefits flow overwhelmingly to Beijing,” he will say.

He will also say that Beijing has extended a lifeline to “the corrupt
and incompetent Maduro regime in Venezuela,” pledging $5 billion in
loans that can be repaid with oil.

Pence will say the U.S. intelligence community has determined that
China is targeting U.S. state and local governments and officials to
exploit any divisions between federal and local levels on policy.

“It’s using wedge issues, like trade tariffs, to advance Beijing’s
political influence,” he will say.

The goal, he is to say, is to shift Americans’ perception of Chinese
policies by mobilizing “covert actors, front groups, and propaganda
outlets.”

“As a senior career member of our intelligence community recently told
me, what the Russians are doing pales in comparison to what China is
doing across this country,” Pence will say.

Pence will also argue that Chinese officials have tried to influence
business leaders to condemn U.S. trade actions, “leveraging their
desire to maintain their operations in China.”

“In one recent example, they threatened to deny a business license for
a major U.S. corporation if it refused to speak out against our
administration’s policies,” Pence will say.

The corporation is not named in the speech excerpts.

Conclusions

Only in August Last year I wrote and its quite a US Push Back since then.

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28-AUG-2017 :: China Rising
Law & Politics


Apart from a few half-hearted and timid FONOPs [freedom of navigation
operations], China has established control over the South China Sea.
It has created artificial Islands and then militarised those
artificial islands across the South China Sea. It is a mind-boggling
geopolitical advance any which way you care to cut it.

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US Navy proposing major show of force to warn China @CNN
Law & Politics


The US Navy's Pacific Fleet has drawn up a classified proposal to
carry out a global show of force as a warning to China and to
demonstrate the US is prepared to deter and counter their military
actions, according to several US defense officials.

The draft proposal from the Navy is recommending the US Pacific Fleet
conduct a series of operations during a single week in November.

The goal is to carry out a highly focused and concentrated set of
exercises involving US warships, combat aircraft and troops to
demonstrate that the US can counter potential adversaries quickly on
several fronts.

The plan suggests sailing ships and flying aircraft near China's
territorial waters in the South China Sea and Taiwan Strait in freedom
of navigation operations to demonstrate the right of free passage in
international waters. The proposal means US ships and aircraft would
operate close to Chinese forces.

Earlier in the week, the Chinese government canceled a port visit to
Hong Kong by the USS Wasp, a US Navy amphibious assault ship.

Following the cancellation, the US Navy released a series of photos
showing troops aboard the 40,000-ton Wasp taking part in a live-fire
exercise in the South China Sea.
Also last week, the US flew B-52 bombers over the South China Sea and
East China Sea.

While the proposal for the week-long exercises is being driven by the
US military, carrying it out it during November when US mid-term
elections are taking place could have political implications for the
Trump administration if the US troops are challenged by China.

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09-JUL-2018 :: Tariff wars, who blinks first?
Law & Politics


President Trump after bashing on Justin Trudeau of Canada and Mexico’s
Enrique Peña Nieto [now upended, of course] and then firing a few
broadsides at Europe, has now turned his attention to Xi Jinping and
thrown him the Keys challenging him to a “Chickie Run.”

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@RealdonaldTrump and Tupac @pastormarkburns
Law & Politics


You seriously need help if you still claim that President
@realDonaldTrump is a racist & hates people of Color. My Black
Americans, please quit falling for the same old Democrat playbook and
think for yourselves. #Tupac. Thanks @LynnePatton

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Currency Markets at a Glance WSJ
World Currencies


Euro 1.1488
Dollar Index 96.00
Japan Yen 114.23
Swiss Franc 0.9907
Pound 1.2968
Aussie 0.7082
India Rupee 73.775
South Korea Won 1129.27
Brazil Real 3.9018
Egypt Pound 17.9113
South Africa Rand 14.7232

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20 AUG 18 I believe we have embarked on a very big rally in the Dollar and that there is a lot further to go.
World Currencies


Essentially the US has been raising rates [making holding the Dollar
more attractive] and reducing the supply of Dollars. Previously emer-
ging and frontier markets had been showering in a golden flood of
cheap Dollar liquidity, had been borrowing Dollars like there was no
tomorrow but are now scrambling to find those Dollars because the
‘’Golden shower’’ has been switched off.

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GDP will probably expand by 2.7% in 2018 @WorldBank #AfricasPulse That's down from World Bank's June forecast of 3.1 percent
Africa


“The road ahead is bumpy,” it said. “The tightness of oil supply
suggests that oil prices are likely to remain elevated through the
rest of the year and into 2019. Metals prices have been lower than
previously forecast and may remain subdued in 2019 and 2020 amid muted
demand, particularly in China.”

Sluggish expansion in Angola, Nigeria and South Africa, the three
biggest economies, is weighing on economic activity in the area, it
said.

The World Bank cut its estimate for South African GDP expansion to 1
percent this year from 1.4 percent before, and sees growth in 2019
remaining subdued as high unemployment constrains domestic demand. It
cut its forecast for Nigerian growth this year by 0.2 percentage point
to 1.9 percent.

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Economic growth in Sub-Saharan Africa is estimated to have picked up to 2.7 percent in 2018 from 2.3 percent in 2017, barely above population growth. @WorldBank #AfricasPulse
Africa


The region’s economic recovery continues but at a slower pace than
expected (0.4 percentage points lower than the April forecast), due to
downward growth revisions in the three largest economies in the
region. The road ahead is bumpy.

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Economic activity remained solid in the fast-growing non-resource-rich countries, such as Cote d'Ivoire, Kenya, and Rwanda, supported by agricultural production and services
Africa


Growth in the rest of the region was broadly steady, but performance
varied across countries. Economic activity remained solid in the
fast-growing non-resource-rich countries, such as Côte d’Ivoire,
Kenya, and Rwanda, supported by agricultural production and services
on the production side, and household consumption and public
investment on the demand side.

Looking ahead, growth in the region is expected to rise to 3.3 percent
in 2019, reflecting a rebound in oil production in Nigeria and Angola.
Economic activity in South Africa is expected to remain subdued, as
high unemployment and slow credit growth weigh on household demand,
and fiscal consolidation limits government spending.

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Reflecting these vulnerabilities, risks to the growth outlook are tilted to the downside. @WorldBank #AfricasPulse
Africa


Key external risks include an unexpectedly sharp decline in commodity
prices, an abrupt tightening of global financial conditions, and
escalating trade tensions between major economies. The main domestic
risks are fiscal slippage, domestic conflicts, and weather shocks.

Although foreign direct investment and foreign aid remain the major
components of capital inflows, portfolio investment (through
international bond issuances) has experienced an uptick since 2013.

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The change in the composition of capital flows has a higher risk content @WorldBank #AfricasPulse
Africa


The change in the composition of capital flows has a higher risk
content, as captured by greater vulnerability to commodity prices,
global interest rates, and currency movements. Policies
and reforms that build resilience to these risks and use foreign
capital to raise medium-term potential growth are needed.

In general, in recent months, prospects for global growth in 2018 and
2019 have worsened and external headwinds have intensified.

The tightness of oil supply means that prices are particularly
susceptible at present to shocks, and implies that risks are firmly to
the upside.

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Real gross domestic product (GDP) growth slowed from 2 percent (year over year) in 2018Q1 to 1.5 percent in 2018Q2 @WorldBank #AfricasPulse
Africa


Nigeria’s recovery faltered in the first half of the year. Oil
production fell, partly due to pipeline closures (figure 1.8). The
agriculture sector contracted, as conflict over land between farmers
and herders disrupted crop production, partially offsetting a rebound
in the services sector and dampening non-oil growth. Real gross
domestic product (GDP) growth slowed from 2 percent (year over year)
in 2018Q1 to 1.5 percent in 2018Q2

Meanwhile, a decline in oil production, due to underinvestment and key
fields reaching maturity, weighed on growth in Angola—the region’s
second largest oil exporter.

South Africa’s economy slipped into a technical recession following
two consecutive quarters of contracting economic activity, with
agriculture, mining, and construction acting as major drags on
economic growth. Manufacturing sector growth was subdued

Excluding Nigeria, South Africa, and Angola, growth in the rest of the
region has been broadly steady, although performance varied across
countries (figure 1.14). Several oil exporters in the Economic and
Monetary Community of Central Africa (CEMAC) saw an uptick in growth,
with Chad and the Republic of Congo expected to exit recession, helped
by higher oil prices and an increase in oil production. Growth in
non-resource-rich countries remained solid, supported by agricultural
production and services on the production side, and household
consumption and public investment on the demand side. Several
countries in the West African Economic and Monetary Union (WAEMU) grew
at 6 percent or more, including Benin, Burkina Faso, Côte d’Ivoire,
and Senegal, although growth softened in some. A strong rebound in
agriculture in Kenya, Rwanda, and Uganda, following drought,
underpinned the pickup in economic activity in East Africa.
Nevertheless, growth has been showing signs of slowing in Ethiopia, as
foreign exchange shortages continue to weigh on construction, and
manufacturing, and in Tanzania due to a weak investment climate, and
low public investment. Growth among metals exporters was subdued,
despite an increase in mining production in some countries. Economic
activity rebounded in Botswana and the Democratic Republic of Congo,
and has been robust in Guinea and Niger, as a recovery in commodity
prices helped boost mining production. However, heightened political
uncertainty (Democratic Republic of Congo), weak fiscal dynamics
(Zambia), and mine closures (Sierra Leone) weighed on growth in
several countries.

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Among non-resource-rich countries, inflation rose sharply in Ethiopia and Sudan @WorldBank #AfricasPulse
Africa


Among non-resource-rich countries, inflation rose sharply in Ethiopia
and Sudan. In Ethiopia, the rapid increase in inflation reflected an
expansion of credit to the public sector, pass-through of currency
devaluation,and political disruptions. In Sudan, the monetization of a
large fiscal deficit caused inflation to rise rapidly.

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During 2012 - 17, government debt is estimated to have increased by more than 20 percentage points in the region.@WorldBank #AfricasPulse
Africa


During 2012–17, government debt is estimated to have increased by more
than 20 percentage points in the region. Debt rose in about two-fifths
of the countries in 2017 and was above 60 percent of GDP in one-third
of the countries. Exchange rate depreciations (Zambia), negative
growth (Chad, the Republic of Congo, and Equatorial Guinea), and the
reporting of previously undisclosed debt (the Republic of Congo and
Mozambique) contributed to the deterioration in debt-to-GDP ratios.
During 2018, government debt rose rapidly in Angola and Zambia, partly
due to continued currency depreciations. Chad finalized the
restructuring of its oil-collateralized debt, which

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The share of foreign currency-denominated public debt increased by about two-fifths from 2010 - 13 to 2017 in the region and averaged about 60 percent of total debt in 2017.
Africa


The share of foreign currency-denominated public debt increased by
about two-fifths from 2010–13 to 2017 in the region and averaged about
60 percent of total debt in 2017. The recent increase partly reflects
the surge in Eurobond issuance (box 1.1). Although interest rates on
foreign currency-denominated debt are generally lower than domestic
interest rates in Sub-Saharan Africa, the increased reliance on
foreign currency borrowing has heightened refinancing and interest
rate risk in debtor countries.

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At the end of 2017, eight countries (Chad, Eritrea, Mozambique, the Republic of Congo, Somalia, South Sudan, Sudan, and Zimbabwe) were classified as in debt distress
Africa


At the end of 2017, eight countries (Chad, Eritrea, Mozambique, the
Republic of Congo, Somalia, South Sudan, Sudan, and Zimbabwe) were
classified as in debt distress under the World Bank–International
Monetary Fund Debt Sustainability Framework.

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Additionally, the previous moderate ratings for The Gambia, Zambia, and Ethiopia more recently were changed to high risk of debt distress.
Africa


Countries with economic performance that lost steam in 2015–18
relative to 1995–2008 represent about one-third of the region’s
population and nearly 60 percent of its economic activity. Their
median rate of GDP growth decelerated from 5.4 percent per year in
1995–2008 to 1.2 percent per year in 2015–18. This group includes the
three largest countries in the region (Nigeria, South Africa, and
Angola), comprises many commodity exporters, and has an average GDP
per capita of about US$2,696.

Growth in Nigeria is estimated to have increased from 0.8 percent in
2017 to 1.9 percent in 2018 (0.2 percentage points lower than April
forecast). Growth is expected to rise further to 2.2 percent in 2019,
reaching 2.4 percent in 2020.

 In Angola, an increase in oil production is expected to boost growth
to 2.7 percent in 2019 and 3.7 percent in 2020, along with a pickup in
activity in the non-oil sector as reforms help improve the business
environment. These forecasts are 0.5 and 1.3 percentage points higher
than in April, respectively.

Growth in South Africa is expected to recover slowly from 1.0 percent
in 2018 to 1.3 percent in 2019 before rising to 1.7 percent in 2020

The region’s total exports in 2016 were about 3.5 times as large as
those in 1996, whereas intraregional exports in 2016 were more than
six times the exports within the region in 1996. The share of regional
exports in total exports rose from 0.13 in 1996 to 0.23 in 2016.

Intraregional trade in Sub-Saharan Africa is highly concentrated.
About two-thirds of the regional demand for intraregional exports is
accounted for by 10 countries—including South Africa and some of its
neighboring countries, Côte d’Ivoire, and the Democratic Republic of
Congo. More generally, trade within the region is dominated by trade
within rather than across regional blocs. This finding is empirically
corroborated by an examination of bilateral trade linkages across
African countries conducted by Arizala, Bellon, and MacDonald (2018):
bilateral trade is more intense across countries that are closer (in
distance) and have common sociocultural characteristics. In this
context, the signing of the African Continental Free Trade Agreement
should aim at boosting trade across the continent’s sub-regional
blocs.

Growth in the region has been overwhelmingly driven by factor
accumulation, while the contribution of total factor productivity
growth has been modest

The major components of capital inflows in Sub-Saharan Africa are FDI
and foreign aid (on average, 3.36 and 3.35 percent of GDP,
respectively, in 2000–17), while remittance inflows account for 2.26
percent of GDP (World Bank 2018b).

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The $500 Million Central Bank Heist - and How It Was Foiled @WSJ @gksteinhauser @margotpatrick & @kowsmann
Africa


An accountant walked up to a teller at a suburban London branch of
HSBC Holdings PLC and asked to transfer $2 million to Japan. The
teller pulled up the account and stared at her screen. There was $500
million in the account.

After asking the accountant some questions, she told him she couldn’t
make the transfer. Then she filed a report to her superiors.

HSBC quickly found out where the money had come from. Three weeks
earlier, in mid-August of 2017, officials at the central bank of
Angola had sent $500 million of the country’s reserves to a company
registered to the accountant’s modest storefront office between a cafe
and barber shop in a gritty London neighborhood.

Authorities in Angola now allege the $500 million transfer was
illegal, part of a convoluted plot to defraud the southern African
country in the final weeks of President José Eduardo dos Santos’s
38-year rule. If Angolan prosecutors are right, the HSBC teller had
helped thwart one of the biggest attempted bank heists ever.

Investigators unraveling the transaction for Angola have identified a
cache of forged bank documents and an “Ocean’s Eleven”-style cast of
characters, including a smooth-talking Brazilian based in Tokyo and a
Dutch agricultural engineer. Their alleged plan, said Angolan
government officials in court documents and interviews with The Wall
Street Journal, was to siphon fees and cash from the central bank
while pretending to set up a $35 billion investment fund.

The group convened in glamorous spots in London, a coastal resort in
Portugal and Angola’s capital, Luanda, with at least one meeting
attended by President dos Santos. The money trail they left led
investigators to international banks, shell companies and a Japanese
firm whose mission is described on its website as “assets liberation.”

“One looks at this and thinks, ‘Wow, what’s going on here?’” says José
Massano, Angola’s new central-bank governor, who is trying to piece
together how his bank almost lost a chunk of its foreign-exchange
reserves. “It is the kind of thing that shouldn’t really happen.”

Last month, prosecutors in Angola announced a variety of criminal
charges against a son of Mr. dos Santos, the former central-bank
governor and two others in relation to the alleged fraud. In the U.K.,
Angola has sued four men, including the Brazilian and the Dutch
engineer, to recover €25 million the central bank paid to set up the
multibillion-dollar fund, which never materialized.

The defendants in the U.K. civil case deny wrongdoing and say they did
legitimate work on an investment fund, under contract, for which they
received fees. After being named a suspect by Angola prosecutors in
March, Mr. dos Santos’s son said he is cooperating with the
investigation, and the former central-bank governor couldn’t be
reached for comment. One of the other two men charged denied
wrongdoing; the other couldn’t be reached for comment.

Angola’s lawyers say the country may have fallen victim to a
decades-old type of get-rich-quick scheme, typically used to defraud
individuals or companies, not sovereign states. Investors are told
they can make huge returns through a private market in “bank
guarantees.” There is no such market, and the U.S. Treasury Department
and Securities and Exchange Commission have warned that such offers
are always fraudulent.

This account of the case is based on interviews with Angolan
officials, bankers, people involved in the legal cases and documents
related to the U.K. lawsuit, including sworn statements and a judicial
ruling.

In June of last year, a letter marked “confidential” arrived at
Angola’s finance ministry for then-President dos Santos, 76 years old,
who was preparing to step down after elections that August. Angola was
reeling from double-digit inflation, and its currency had plunged
since the 2014 oil bust.

The letter, bearing a BNP Paribas SA logo and the signature of the
French bank’s chairman, made a compelling proposal. BNP Paribas and
other European banks would help Angola create a $35 billion fund,
refinance debt and get hard currencies for imports.

The letter named two deal coordinators: Hugo Onderwater, a Dutch
agricultural engineer living in Portugal, and Jorge Pontes Sebastião,
a childhood friend and business partner of President dos Santos’s son.
Mr. Pontes, 40, a slim man whose bodyguard carries his briefcase to
meetings, was until recently president of an Angolan bank; Mr.
Onderwater, 55, tall and sandy-haired, has a business converting waste
to energy, according to U.K. court filings by the two men. The two had
met in 2016 to discuss financing for an Angolan government
food-quality agency, then broadened the idea into an Angola investment
fund, according to a court statement by Mr. Pontes.

Days after the letter arrived, Angola’s finance minister and
central-bank governor flew to a meeting in Cascais, near Lisbon. The
president’s son, José Filomeno dos Santos, then in charge of Angola’s
sovereign-wealth fund, came with them to represent the state,
according to a U.K. court filing. His father had approved looking into
the project, according to Mr. Pontes’s statement.

In a seaside hotel, Mr. Onderwater, the Dutch engineer, and Mr. Pontes
presented slides for a new fund to help diversify Angola’s economy, to
be managed by a “qualified trust company” in London, according to
excerpts from the presentation in U.K. court documents. A slide listed
banks said to be supporting the project, including the European
Central Bank.

The ECB says it was never involved in the project, and BNP Paribas
says the letter with its logo and chairman’s signature was forged.

Mr. Onderwater later told the U.K. court the banks mentioned were
merely examples of possible participants, and that he only saw the BNP
Paribas letter during court proceedings.

Angola’s finance minister, Archer Mangueira, was skeptical of the
plan. His department questioned the experience of the two deal
coordinators and wondered about the project’s “true developers.”

Nevertheless, in July of last year, the central-bank governor, Valter
Filipe da Silva, signed an agreement with Mr. Pontes to set up the
fund.

That same month, the central bank started transferring €24.85 million
($28.9 million) from its Commerzbank AG account in Frankfurt to an
account of Mr. Pontes at Banco Comercial Português SA in Lisbon, for
fees due under the agreement, U.K. court documents show.

Mr. Onderwater received €5 million of that money, using some to buy
property in Lisbon and rural Devon, England, investigators for the
Angolan finance ministry found.

Another €2.4 million went to a Tokyo company called Bar Trading,
headed by another alleged participant in the plan, 51-year-old
Brazilian Samuel Barbosa da Cunha. His role was to act as “trustee” of
Angola’s $500 million seed money for the new fund, in charge of
obtaining the “bank guarantees” and financial instruments that were
supposed to transform the country’s money into $35 billion, according
to Mr. Pontes’s testimony and other U.K. court filings.

Mr. Pontes told the U.K. court Mr. Barbosa was brought into the deal
by Mr. Onderwater, a claim Mr. Onderwater denies. Lawyers for Mr.
Onderwater said recently in a written statement that the bank
guarantee was “solely an internal Angolan matter.”

Bald and hulking, Mr. Barbosa described himself as an expert in buying
and selling such guarantees on his company website and in
correspondence with clients reviewed by the Journal. His LinkedIn
biography says he has 30 years of financial experience and an
economics doctorate from Boston University. The school’s library has
no record of a dissertation, and a spokeswoman for the school couldn’t
confirm his attendance or a degree after searches by his name,
hometown and birthdate.

At the end of July 2017, Mr. Barbosa headed for London. First, he
touched down in Riga, Latvia, where he boasted to a friend that he was
working on a big deal with Angola’s central bank, the friend says.

Mr. Barbosa and the friend had teamed up before, persuading retirees
in Florida and Canada and an Australian company to invest in bank
guarantees promising up to 550% monthly returns, according to people
who gave them money and documents they provided to those people, which
were reviewed by the Journal. A representative of the Australian
company filed complaints about the friend and Mr. Barbosa to U.K.
authorities, alleging fraud, according to the documents.

U.K. regulators declined to comment. Mr. Barbosa didn’t respond to
requests for comment, and the friend denied working with Mr. Barbosa
or any involvement in the alleged fraud.

One day in August of last year, Messrs. Onderwater and Pontes sent
instructions to the central-bank governor to transfer $500 million to
the trustee, Mr. Barbosa, according to evidence cited by the U.K.
court. They provided the details of an HSBC account of a company
called Perfectbit Ltd., registered to the London accountant’s
storefront office and listed on Bar Trading’s website as an overseas
subsidiary.

Two days later, central-bank officials entered Perfectbit’s account
details into the Swift network, a bank-owned consortium that handles
millions of daily payment instructions. The money moved from the
central bank’s Standard Chartered PLC account in London to
Perfectbit’s HSBC account. The transaction didn’t prompt any extra
checks by either bank, people familiar with the matter say.

“There is a hole in the international finance system that allows for
transfers to be made with minimal information,” says Shane Shook, a
cybersecurity consultant.

The central bank’s Swift message code indicated—inaccurately—that the
money was for intrabank business with HSBC rather than headed to an
HSBC customer, according to bank documents reviewed by the Journal.
HSBC noticed the discrepancy later, when it started probing the
transfer.

Once the $500 million was in Perfectbit’s account, the accountant made
Mr. Barbosa and an associate owners of the company. The accountant,
Bhishamdayal Dindyal, kept signing power on the HSBC account.

Over the next few weeks, the accountant and an associate of Mr.
Barbosa’s each visited HSBC branches trying to access the cash,
unsuccessfully, according to Angola’s U.K. court claim. The associate
said in a later court statement that $26,999.99 from the HSBC account
was paid as a fee for Perfectbit’s work on the fund.

After the alert teller in the suburban London branch filed a report
about the enormous balance, HSBC suspended the account for review.

In Angola, a power shift was under way. President João Lourenço,
inaugurated in September 2017, launched an anticorruption drive, and
his finance minister, Mr. Mangueira, still suspicious of the central
bank’s new investment fund, started an investigation.

Seeking answers, Mr. Mangueira took the central-bank governor, Mr. da
Silva, to London again to meet with the three organizers of the
deal—Messrs. Onderwater, Pontes and Barbosa. The former president’s
son, Mr. Filomeno dos Santos, came along, too, this time in support of
the deal organizers, U.K. court filings show.

In an hourslong meeting at the elegant Cavalry & Guards Club, Mr.
Barbosa batted away questions about his and his colleagues’
qualifications. He said a European bank had guaranteed Angola’s $500
million, according to a U.K. court filing. That day, a letter was sent
to President Lourenço saying Angola’s $500 million was guaranteed by
Switzerland’s Credit Suisse AG , and had swelled to $2.5 billion from
transactions by the trustee.

Credit Suisse says it didn’t guarantee the money and documents in its
name were forged.

As he listened to Mr. Barbosa, Mr. Mangueira recalled in an interview,
he became convinced the Brazilian was the mastermind of a fraud. He
had the air of a “vendedor da banha da cobra,” Mr. Mangueira
said—Portuguese for a snake-oil salesman.

Back in Angola, President Lourenço gave Mr. da Silva, the central-bank
governor, 24 hours to get the $500 million back, according to U.K.
court filings. That didn’t happen, and he resigned without any public
explanation.

With the deal collapsing, Perfectbit wrote to HSBC last Nov. 9 asking
the bank to return the nearly $500 million in its account to the
central bank, according to a U.K. court statement from Mr. Barbosa. He
said Perfectbit was asked to make the request by the company owned by
Messrs. Pontes and Onderwater that had hired Perfectbit to act as
trustee.

Eight days later, Angola’s finance ministry filed the U.K. lawsuit
against the three organizers of the deal—Messrs. Pontes, Onderwater
and Barbosa—and Mr. Barbosa’s associate. A judge froze the
$499,972,438 remaining in the HSBC account. The U.K.’s National Crime
Agency, an entity akin to the Federal Bureau of Investigation, opened
a criminal investigation.

A few days later, Mr. Barbosa’s associate was arrested by police at
Heathrow Airport and released under investigation. He denies
wrongdoing.

The accountant, Mr. Dindyal, who isn’t a defendant in the lawsuit, was
arrested at home in December and also released under investigation. He
declined to comment.

Messrs. Pontes, Onderwater and Barbosa all say their companies
operated under contracts with the central bank or each other and deny
wrongdoing.

Letter arrives for Angola president proposing $35 billion investment
fund.Angolan officials meet with fund coordinators in Portugal.Angolan
central bank makes first of three transfers, totaling €24.85 million,
to company of one coordinator.Central bank transfers $500 million to
HSBC account of Perfectbit Ltd. in Bromley, U.K.In late Aug.-early
Sept., two men visit HSBC branches trying to access Perfectbit’s $500
million.HSBC teller flags Perfectbit account for review and suspends
it.New president is inaugurated.Angolan finance minister and central
bank governor meet with deal coordinators and their
associates.Central-bank governor resigns.Angola files lawsuit in
London against deal organizers.Former president’s son is dismissed as
chairman of Angola’s sovereign-wealth fund.Angola's $500 million is
returned.Angolan prosecutors say they have charged four men in alleged
fraud targeting central bank.
A judge in the U.K. civil case said in a written April ruling that Mr.
Pontes and his company “appear to contend (in effect) that they are
victims of a fraud perpetrated by Mr. Onderwater. Mr. Onderwater
appears to contend (in effect) that he is a victim of the fraud of Dr.
Barbosa and Dr. Pontes.”

U.K. authorities returned the $500 million to the Angolan central
bank, but prosecutors in Angola are proceeding with their criminal
fraud case.

They charged Mr. Filomeno dos Santos, the former president’s son, and
Mr. Pontes with money laundering, criminal association, falsification
of documents, influence peddling and stealing through fraud.

Mr. da Silva, the former central-bank governor, was charged with
criminal association, embezzlement and money laundering. The fourth
man, a central-bank employee, was charged with criminal association
and embezzlement.

Mr. Filomeno dos Santos was dismissed from the sovereign-wealth fund
this year. He hasn’t commented since the charges were announced. In a
previous statement to Angola state television, he said he was
cooperating with the investigation.

Mr. Pontes denies the criminal charges. In an email statement through
his lawyers, he said Angola’s €24.85 million was voluntarily returned
in June as part of negotiations to settle the U.K. civil case, and
that he will “continue to act in good faith in his commercial
dealings.”

The former central-bank governor, Mr. da Silva, hasn’t commented
publicly and couldn’t be reached for comment.

Messrs. Onderwater and Barbosa likely will keep their payments unless
Mr. Pontes takes his own legal action against them, according to
people familiar with the U.K. civil case, which remains open.

In June, several photos appeared on Mr. Barbosa’s Facebook page. One
shows him puffing on a cigar, another grinning from a business-class
cabin.

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"If an egg is broken by outside force life ends. If broken by inside force, life begins." PM Abiy @fitsumaregaa
Africa


“The ideas for political reform are initiated by #EPRDF and the reform
will be sustained if the party generates & guides bold ideas that
matter most to the people. If an egg is broken by outside force life
ends. If broken by inside force, life begins.” PM Abiy

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Ethiopian PM pushes for unity after months of ethnic violence @ReutersAfrica
Africa


Ethiopia’s Prime Minister Abiy Ahmed told members of his ruling
coalition that “an attack on one is an attack on all” on Wednesday as
he pushed for unity after months of ethnic violence.

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Uganda Makes Sub-Sahara's First Major Move to Tighten Policy
Africa


Uganda became the first major sub-Saharan African economy to increase
interest rates this year to counter inflation pressures caused by a
weakening currency and rising oil prices.
The Monetary Policy Committee in the east African nation increased the
benchmark rate to 10 percent from 9 percent, central bank Governor
Emmanuel Tumusiime-Mutebile told reporters Wednesday in the capital,
Kampala. That is as inflation pressures have increased and price
growth is projected to exceed its target, he said.
“A key risk to the inflation outlook is the shilling exchange rate,
which remains vulnerable to the possibility of tighter global
financial conditions as well as stronger domestic demand,”
Tumusiime-Mutebile said. The weaker currency “combined with higher oil
prices could result in a more elevated inflation trajectory,” he said.
“The Bank of Uganda has always been one of the more forward-looking
central banks in the region, and it is certainly living up to that
reputation,” Razia Khan, head of macroeconomic research at Standard
Chartered Bank Plc, said by email.

Kenya

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Kenya's Worst Performing Stocks (Jan - Sep) 2018 @kenyanwalstreet
Africa


Uchumi -80.4%
ARM Cement -79.2%
Eveready E.A  -58%
Home Afrika -53%
Mumias -50%
Kenya Power -49%
HF Group -44.2%
TransCentury  -42%
Kenya Airways -41.7%
Nation Media Group -40.5%
NBK -38%
Centum -34.9%
NIC Bank -27.4%

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by Aly Khan Satchu (www.rich.co.ke)
 
 
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October 2018
 
 
 
 
 
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