Angola Wealth Fund Case Against Dos Santos Unfair, Judge Says

LUANDA (Capital Markets in Africa) – Angola’s sovereign wealth fund made an unfair case when it accused the son of the country’s former president of involvement in a “dishonest conspiracy” over the management of assets, a London judge ruled on Thursday.

The fund breached a duty to make a fair presentation, judge Andrew Popplewell said in a ruling, which re-stated a decision to overturn a $3 billion freeze order on assets linked to the sovereign wealth fund. It failed to disclose information that was central to the case and “would have put a very different complexion” on it, he said.

Popplewell said he hadn’t found any deliberate breach of disclosure rules by the fund’s lawyers, but that it was “less clear” whether this was true of staff at the wealth fund.

Jose Filomeno dos Santos, the son of former president Jose Eduardo Dos Santos, used to run the wealth fund — Fundo Soberano de Angola — but he was removed from the role in January, court papers say.

The fund sued him, saying he’d appointed the Quantum group of companies, which are 95 percent owned by his friend and business partner Jean Claude Bastos de Morais, to invest and manage $5 billion on behalf for the wealth fund even though it lacked the experience to do so, according to court documents. Dos Santos and Bastos said the allegations were spurious and flawed, and that they were the victims of political change after Dos Santos’s father was replaced as president.

Lawyers for the sovereign wealth fund didn’t respond to calls and emails seeking comment. An assistant at the fund’s office in Luanda said no-one was available to discuss the matter.

In bringing that case, the fund had failed to disclose that Quantum was chosen as its investment manager before Dos Santos became its chair. It also unfairly presented fees charged to manage part of the fund as “eye watering.”

“In this case the breaches taken cumulatively are serious and substantial,” Popplewell said in the judgment. “They do not relate to a few, merely peripheral, matters, but to numerous matters at the heart of the claimants’ case.”

A spokesman for Dos Santos said he was “pleased with the judgment,” adding that the ex-president’s son “has always acted in good faith and acted responsibly in the discharge of his professional duties.” A spokesman for Quantum Global said the judgment was “highly critical” of the wealth fund’s lawyers and described the ruling in a statement as a “milestone.”

The judge said he didn’t accept the fund’s allegations against Dos Santos and Bastos of “lawful means conspiracy” and there was “no evidence” that Quantum’s use of offshore structures, highlighted by leaked documents known as the Paradise Papers, was anything other than normal and legitimate.

Source: Bloomberg Business News