Africa’s top billionaire uses Malta shell companies to hold diamonds ‘conflict’

Daughter of Angola’s president, Isabel dos Santos, uses Malta shell companies to hold her major interests in state-owned diamonds, banking, and telecoms.

Africa's top billionaire Isabel dos Santos (centre) uses Malta shell companies to hold major interests in state-owned diamonds, banking, and telecoms. She is pictured here with De Grisogono founder Fawaz Gruosi (left) and husband Sindika Dokolu
Africa's top billionaire Isabel dos Santos (centre) uses Malta shell companies to hold major interests in state-owned diamonds, banking, and telecoms. She is pictured here with De Grisogono founder Fawaz Gruosi (left) and husband Sindika Dokolu

Five thousand kilometres away from the Angolan capital of Luanda, Malta is the registered address of a company whose ultimate owner is Sodiam, a subsidiary of Angola’s state-owned diamond company, Endiama.

It is a common set up for many foreign companies, which set up subsidiaries in Malta to also make use of the attractive tax rebate on foreign revenue, giving 85% of taxable income back to shareholders.

But behind the set-up of Sodiam’s Maltese subsidiary, Victoria Holding, is its other owner, Melbourne Investment BV, a company owned by Sindika Dokolo, the husband of Africa’s richest woman and first female billionaire – Isabel dos Santos.

At 42 and valued at $3 billion by Forbes, African ‘princess’ Dos Santos is reckoned as a major force in many industries: such as diamonds, banking and telecommunications, usually with stakes in her own country's state corporations.

But being the eldest daughter of autocrat President José Eduardo dos Santos, Africa’s second longest-serving leader at 35 years in office, she stands like him accused of enriching the Dos Santos dynasty at the expense of the nation.

The real story – Angolan journalist Rafael Marques de Morais told MaltaToday when contacted – is about how Isabel dos Santos acquired her wealth. In compiling their rich list, Forbes say that every major Angola investment she has “stems either from taking a chunk of a company that wants to do business in the country or from a stroke of the President’s pen that cut her into the action.”

MaltaToday’s interest in the billionaire’s company base in Malta – most of the companies are shells that employ nobody bar financial advisors and lawyers – comes from a recently-registered company, Winterfell Industries. The company is a subsidiary of Niara Holding, a Portuguese company whose owner is listed as Isabel dos Santos.

Her company interests are managed here by Noel Buttigieg Scicluna, the former Nationalist MP and diplomat, who is listed as a director on several other related firms: Victoria Holding, Victoria Limited, Finisantoro Holding, Kento Holding, Piccadilly Holdings, Soho Global Management Solutions, Wise Intelligence Solutions Holding, and Athol Limited.

Compared to her financially successful stakes in Angolan banking, diamonds and telecoms, a number of these Maltese companies do not appear to be always profit-making. Most of them hold interests elsewhere: Kento, owned by Dos Santos and husband Sindika Dokolu, is the vehicle for her investment in telecommunications; Finisantoro holds her investment in Lisbon’s Banco BPI.

Others like Athol Limited are fully owned by Dokolu, used for the purchase of a Monaco property currently under construction: the promise-of-sale deposit alone is of €7.5 million.

In compiling the Dos Santos wealth, Forbes was unable to trace the origins of the billionaire’s acquisition of stakes in Angola’s state companies.

Take Victoria Holding. The company is owned jointly by Angola’s state diamond marketing company Sodiam and husband Sindika Dokolu. In 2012 it acquired the €63 million debt that Swiss jeweller De Grisogono held with UBS and other banks. De Grisogono’s founder, Fawaz Gruosi, was given shares in Victoria Limited.

Noel Buttigieg Scicluna told MaltaToday that neither Victoria Limited nor Victoria Holdings buy any diamonds from Angola. “The Angolan diamond trade is not housed in a company in Malta,” he said.

But that conflicts with what De Grisogono founder Gruosi had told Swiss newspaper Le Matin, who said the deal gave De Grisogono “privileged access to top quality precious stones”.

To critics of Dos Santos, such as human rights activist and journalist Rafael Marques de Morais, who spent 22 years tracking down the origins of her fortune, it is clear that the family business has a stake in government companies.

“The proven partnership between Isabel dos Santos, Sindika Dokolo and Sodiam amounts to a flagrant case of conflict of interest,” writes De Morais, who faces nine separate defamation trials in Angola for his revelations on blood diamonds.

"The partnership between Sodiam and Isabel dos Santos is illegal under the Angolan legislation, because her father, the President of the
Republic, appoints the board of Sodiam and, as head of the executive, is entitled to give them instructions. As such, the law forbids him from using his position for the enrichment of his family.

"This is the reason why, such a partnership is not recognized in Angola, and does not appear in the books of Sodiam, but in Malta only. In the near future, the president might be prosecuted for this case, for corruption and diversion of state resources, such as diamonds, for the illicit
enrichment of his family. The family can no longer hide the ill-gotten riches through shell companies based in Malta. They have been outed now."

Tax benefits


If Dos Santos’s companies are being used for tax treatment in Malta, there is nothing in the filed annual accounts suggesting a massive movement of profits overseas to Malta, as yet.

Buttigieg Scicluna, senior consultant at EMD Advocates, was asked to comment on whether the Dos Santos companies use Malta to have their profits taxed over here.

“As a professional service provider I am not in the habit of responding to queries about my clients’ affairs. The structures are transparent – as hopefully you were able to verify yourself – and all relevant information is publicly available and can be checked.

“This is the hallmark of Malta as a jurisdiction. The companies pay the taxes they are obliged to pay and file their financial statements that are also professionally audited, all as required by law.”

Of course, Dos Santos is no different from inventor Sir James Dyson, who in 2010 transferred his shares to a Maltese company but is now relocating it to the UK after paying over €100 million in tax. Or chicken restaurant Nando’s, which uses its Malta company to legally lower its UK corporation tax bill, and energy provider Npower, whose Malta subsidiary is Scaris International.

As it happens, both Nando’s Malta Holdings and Winterfell Industries, share the services of director Edward Carbone, a one-time chief executive of the Malta Financial Services Authority.

“All this is in line with the vision that the country’s strategic leaders had when launching Malta as an international financial services centre,” Buttigieg Scicluna told MaltaToday.

“So querying precisely why international operators respond to this strategy and set up in Malta seems counterintuitive and, quite frankly, does not appear to be in the country’s best interests.”