In May 2011, Sudanese media reported on a commotion that had broken out in the Sudatel hall when a debate erupted amongst the shareholders of Sudatel Telecom Group Ltd., which is the largest public telecommunications company in Sudan. The 2010 financial reports showed that Expresso, the holding company of Sudatel investments abroad, had sold 30% of its shares in Nigeria to the private Larrycom Company. At the time, Larrycom was owned anonymously.
According to a report published by one of the shareholders, the transfer of the company's ownership shot Sudatel's deficit up to $189 million dollars, and the shareholders confronted the members of the company's board of directors and demanded to know, "Who owns Larrycom?"
Sudanese newspapers circulated the news and described the incident as "the corruption of the century."
This investigation is based on leaked documents obtained by the International Consortium of Investigative Journalists (ICIJ) and shared with ARIJ and a large number of publishers around the world within a project labelled as the Pandora Papers. The leaks mark the biggest cross-border journalistic collaboration project in history and include millions of documents from lawyers' offices about tax havens. They also uncover assets, secret transactions and the hidden fortunes of the rich, including more than 130 billionaires, more than 30 world leaders, a number of fugitives or convicted people alongside sports stars, judges, tax officials and counterintelligence agencies.
These documents uncover an alliance between former chairman of the board of directors of Sudatel, Abdel-Aziz Osman and Abdel-Basit Hamzah, the businessman who is close to the former president of Sudan, Omar Al-Bashir. Together, they transferred shares from the Sudatel public company to the privately owned Sudanese Larrycom Company, through Expresso Holding. They also partnered in establishing another company under the name of Larrycom in the British Virgin Islands, directly before signing the deals, which amounts to a conflict of interest.
Hamzah and Al-Bashir's friendship goes back to when the former was a member of the Islamic Movement, through which the National Congress Party that ruled in Sudan emerged. Abdel-Aziz Osman was a leading member of the same party.
Larrycom: The Beginnings
After the revolution that toppled the Sudanese president, Omar Al-Bashir, in 2019, the Committee to Eliminate Empowerment, Fight Corruption and Recover Sudanese Funds issued decision No. (134/ 04) in April 2020 to freeze the assets and bank accounts of sixteen companies and figures, which are all owned by the businessman, Abdel-Basit Hamzah, or run by him. These included the Zawaya Company, which was founded in 2002 and the companies it owns: Larrycom for Limited Investments, also founded in 2002, and Ram Energy Company Ltd., founded in 2003.
In a press conference held in April 2020, the Committee stated that Abdel-Basit Hamzah "started as a small officer in the armed forces and belonged to the Islamic Movement. In 1985, he joined the Special Work System in the military and, through his work, gained access to sensitive files. He was able to control more than two billion dollars and was transformed into a business tycoon overnight. He ran the department of Special Operations and worked in many other facilities run by the regular forces. He came upon the telecommunications sector, which is an extremely rich sector."
Hamzah's relationship with the telecommunications sector started in 2002, when his newly established company, Larrycom, obtained the license to run the second telecommunications company, which later transformed to MTN. Larrycom held 15% of MTN Sudan's shares, while the company itself owned the rest.
Hamzah was the chairman of the board of directors of Sudan's publicly owned company, Sudatel, and worked alongside Abdel-Aziz Osman, who is an Islamist and a member of the National Congress Party that had ruled previously. Under their management, the sister company of Sudatel, the Mobitel public company, was sold for $1.3 billion. According to the Committee to Eliminate Empowerment, Fight Corruption and Recover Sudanese Funds, Mobitel was sold to a foreign company, namely the Kuwaiti Zain company, for 10% of its original value. Due to this acquisition, the foreign company made $5 million a day in profit. The Committee notes that the funds from the transaction were used in external investments in West Africa.
Expresso and Investments in West Africa
Expresso was founded in the United Arab Emirates in November 2007 with a capital of $50,000.00, and Sudatel owns 75% of its shares. A Dubai International Financial Centre report shows that Larrycom is Sudatel's only partner in Expresso. The company's registration papers reveal that, until September 16, 2012, Abdel-Basit Hamzah was one of the directors of the company that was founded in the Emirates.
According to the 2010 Sudatel report, the purpose of establishing Expresso was "to run the group's global operations," which were focused on West Africa.
Two months after the establishment of Expresso, the leader of the National Congress Party in Sudan, Abdel-Aziz Osman, became chairman of the board of directors of Sudatel. According to the leaked documents, in February 2008—and one month after he assumed this position—Expresso filed an application at the Panamanian legal office, Alemán, Cordero, Galindo & Lee, to register the company in the British Virgin Islands under the same name of Larrycom Ltd. for Investments. This company's 50,000 shares were divided between Hamzah and Osman.
At the same time, a network of companies owned by Sudatel, directly or indirectly, was established in the British Virgin Islands. These were run by the directors of Sudatel and Expresso: Khalid Hisham, Tariq Hamzah Zain Al-Abedin and Tariq Hamzah Rahmat Allah. Larrycom was the only company in the network that was owned by people, instead of companies.
Two years before this stage, the American Department of the Treasury had issued decision No. 1340 0E to place the following companies on the list of sanctions in 2006 for "their contribution to the conflict in the Darfur region": the Sudatel public company; Ram, which is owned by Larrycom which, in turn, is owned by Zawaya.
The Nigeria Deal
When Osman became the chairman of the board of directors of Sudatel in 2008, the group bought an additional 50% in shares in the public company Intercellular Nigeria, Ltd., in early 2009. In this way, the Nigerian company was owned by Sudatel by 70% through a $60 million dollar deal, as Sudatel's 2009 financial report shows.
However, by the end of the year, on December 31, 2009, Expresso, the company that runs Sudatel's assets abroad, sold 17.5% of Sudatel's shares in the Nigerian company to the Sudanese Larrycom. This sale reduced Sudatel's share to around 52.5%.
On January 7, 2010, Expresso sold 30% of Sudatel's share in the company to Larrycom for $25.71 million, with a profit of $6.063 million, as reported in the company's 2010 financial report. By this, Sudatel's share in Intercellular Nigeria was downsized to only 30%.
This transaction enraged Sudatel's shareholders. On May 18, 2011, former shareholder in the company, Amin Sayid Ahmad, published a letter that was circulated by the Sudanese Al-Ahdath newspaper. Amin explained that Sudatel's general deficit on the company's financial statements reached $189 million more than in 2009. This means that in 2009 and 2010, there was a $264 million reduction in the shareholders' funds.
Amin's letter mentions that Osman signed the company's financial reports. Amin is a banker and a financial expert, and he considers signing the financial reports as part of the responsibility of the executive management and not the board of directors. Item (2) of Article (265) of 1925 states, "The general manager is also the primary executive authority before the board, and takes charge of the company's financial, administrative and technical activities, based on the company's registration contract and the board's directives."
Amin pointed out that Ernst & Young's independent auditors in Bahrain, who had previously audited the group's financial statements in 2009, did not do so in 2010.
Amin noticed the recurrence of the name of Larrycom in a number of follow-up clarifications to the financial reports of sales operations in the shares of the companies affiliated with the Sudatel Group. He also noticed other transactions for millions of dollars and asked, "Which company evaluated the assets sold to Larrycom? Who owns Larrycom? What is the capital paid to this company? Is it true that one of the owners is also a partner in the Zawaya Group, whose shares are held by Sudatel's chairman of the board of directors?"
In a statement to ARIJ, Amin says that the ultimate beneficiary of the sales of the Sudatel shares to Larrycom is the Zawaya Company. This company was founded by a group that is close to former president, Omar Al-Bashir, and includes people like Abdel-Basit Hamzah and Abdel-Aziz Osman.
Apart from an unknown and unverified LinkedIn account showing the name of "Osman" as the director of Zawaya, we did not obtain any information indicating that Osman was one of the Zawaya shareholders. The older Zawaya website clearly mentions that Hamzah had previously managed the company.
The Committee to Eliminate Empowerment, Fight Corruption and Recover Sudanese Funds sees that the transactions among Sudatel, Expresso, Larrycom and Al-Bashir are all connected. In a statement, the Committee said, "Expresso used to control all these funds, and very little of it returned to Sudan. They were invested outside the country on behalf of Abdel-Basit Hamzah and others, along with the family of the ousted president, Omar Al-Bashir."
Regarding the transactions conducted when Abdel-Aziz Osman ran the company, Amin tells ARIJ that, as a public company, the chairman of the board of directors of Sudatel should have run the transactions by the General Assembly before sealing the deals, but this did not happen.
Sudatel's Legal Status
Sudatel's financial reports classify the company as a public company as per the Law on public Corporations of 1925. Article (2-262) (B) of this law on public companies states that the board of directors in these companies should sign contracts and agreements on behalf of the public sector company.
Jackson Oldfield is the founding partner in the German institution of Civil Forum for Asset Recovery. He tells ARIJ that Larrycom is owned by Abdel-Basit Hamzah, who partnered with the chairman of Sudatel, Abdel-Aziz Osman, and this makes the transactions between Sudatel and Larrycom "seem like a conflict of interest."
Hamzah is now serving a ten-year sentence and was indicted for illegal profiteering and for violating the anti-money laundering and anti-terrorism law. In the meantime, the Committee to Eliminate Empowerment is still trying to track his offshore investments, of which "very little has returned to Sudan."
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