As Angolan leader Jose Eduardo Dos Santos wooed President Jacob Zuma this week, some South African companies are furious at having been fleeced out of cash by doing business with the oil-rich country.
Business Times has affidavits filed by JSE-listed transport company Super Group that accuse relatives of Dos Santos' political elite of conning it out of 33.1m.
This compounds fraud experienced by companies such as Group 5 in Angola, and leaves a question mark over whether they should be seduced by promises of Angolan profit, if contracts can't be honoured.
In Super Group's case, the son of General Helder Vieira Dias (known as Kopelipa), head of Angolan counterintelligence and military advisor to Dos Santos, has been named as the mastermind of a plot to steal 448 vehicles, worth north of R250-million.
Super Group has laid charges with the police and has met with Interpol to get an international arrest warrant issued for Kopelipa's son, Kopelipa Vieira Dias Jr, and his business partner Pedro Spinola.
This stems from a July 2007 deal for Super Group to sell trucks to Angola's government through Luanda-based Imporchoice. Kopelipa Jr was chief executive of Imporchoice, while Spinola got a 24% commission for brokering the deal.
While Super Group was initially paid for delivering 30 trucks, it wasn't so lucky when it delivered another 350 by boat from China, supposedly for General Kopelipa's "National Reconstruction Office". Another 98 vehicles arrived later by land.
In an affidavit to police, Super Group's directors say Kopelipa Jr and Spinola spun a "web of lies and broken promises" to "steal" vehicles. This left Super Group out of pocket to the tune of 33.1-million.
The affidavit also details how documents were forged. On November 7, Kopelipa Jr admitted he owed the money and e-mailed from his holiday home in Portugal saying he was ''sending the first of several payments". He attached a bank transfer document supposedly confirming that 5.4-million had been wired to Super Group. But this turned out to be a crude forgery.
One Super Group director told Business Times: "We realised this document wasn't legitimate, partly because it was dated November 31st, and November in fact has only 30 days".
After a row, Kopelipa Jr washed his hands of the mess on November 21 by selling Imporchoice to Spinola.
In his statement, Super Group's former CEO Larry Lipschitz says there is proof that Imporchoice was paid 8,7-million for vehicles by Brazilian firm Odebrecht. Yet Super Group didn't see a cent. "Neither Kopelipa Jr, Spinola or Imporchoice intended to pay (us)," he says.
However, Spinola denies ''robbing" Super Group. He says Super Group lied to ''cover their tracks" and detract attention from its other financial problems.
"Trucks were delivered to Angola by Super Group, but the wrong trucks were delivered. We wanted Power Star trucks, but the trucks they delivered were of inferior quality. The clients were prepared to take the trucks as long as modifications were made, but this wasn't done," he says.
He says payment was then stopped.
Spinola says no trucks were stolen. ''Some were delivered to clients with Super Group's permission, but they weren't swindled out of any money," he says
Spinola says Kopelipa Jr had to pull out of the deal " because of the person he is and the family he belongs to". When contacted, Kopelipa Jr said: ''I've got nothing else to say about this."
However, the Specialised Services Group, which investigated the case for Super Group, says it has confirmed that there is already an outstanding warrant of arrest for Spinola in SA dating back to June 2007 over another deal he struck.
To get its cash back, Super Group tried to get political help. This week, it sent a letter to Zuma's office asking for assistance because its "catastrophic" venture "creates a major impediment for other South African businesses in Angola".
Yet trade minister Rob Davies, who was in Angola with Zuma, told Business Times that he had "not been informed of any situation where people have lost investments" in Angola. "We believe the Angolan government has significant regulations in place now for South Africans to have investment security," he said.
In December, Lipschitz wrote to Angola's justice minister Dr Guilhermina Prata, calling for a probe and saying: "We gave permission for authorities to prosecute Spinola and Kopelipa Jr."
But Prata is understood to be Kopelipa Jr's mother-in-law, and Super Group could not find Angolan lawyers to represent it.
The Angolan fraud almost triggered Super Group's collapse. On December 12, it announced a R197-million impairment for the Angolan fraud and ''revised" its profit for the year to June down 82% - sparking a 22% plunge in its share price.
This prompted ratings agency Fitch to slash Super Group's credit rating to "junk bond" status five days later, which gave its bankers the option to callup overdraft facilities with only 24 hours' notice.
Now, Super Group needs a R1-billion cash injection to stay afloat, and is weighing up two alternative rescue bids: either from its bankers and shareholders, or a white knight in Kuwaiti company Agility.
But Super Group's disaster in Angola is also partly of its own making.
Two former executives - Les Johnston and Warren Thompson - have been blamed for "misleading the board" by saying no trucks would be offloaded in Luanda until cash had been paid. Both are now believed to be in Mauritius.
Construction firm Group 5 lost more than R10-million to fraud in 2005, when it found ''irregularities" in the R820-million Nova Vida housing project it had built in Luanda. It has closed its Angolan building arm, but retains an engineering team.
"It was very difficult to operate in Angola from a compliance and regulatory perspective," says Group 5 financial director Cristina Teixeira.
One South African businessman, who was part of Zuma's delegation, says: "Everyone you deal with in government wants something in return." Another says: ''If you take your eye off the ball for 13 seconds, it's 12 seconds too long." - Additional reporting by Paddy Harper
- 106 Money & Politics
- 185 Corruption