DRC Govt accused of being behind the bankruptcy of SODIMICO SA (report)
Published in November 2022, the report of the General Inspectorate of Finance imputes to the Government of the Democratic Republic of Congo (DRC) the responsibility for the bankruptcy of the Integral and Mining Development Company of Congo (SODIMICO SA).
According to this report, the facts date back to 2011 when the Congolese Government assumed the right to use the funds of SODIMICO SA in the order of 14.5 million USD out of the 15 million USD representing the share of 50% of key money paid by FORTUNE AHEAD LTD to SODIMICO SA
The IGF notes that the collection of this amount was certified by the Minister of Finance and the control mission had no assurance that this amount was credited to the General Treasury Account.
In its report, the General Inspectorate of Finance indicated that SODIMICO SA is in a “ terrible state of failure and requires special attention from the authorities for its start-up ”.
This report reveals that of SODIMICO’s 11 mining titles, 7 have been definitively transferred to joint ventures, and the remaining 4 are leased.
In addition to the conclusion of partnership contracts with no impact on the development of SODIMICO SA and the Congolese State, illustrated by the cessation of assets in these partnerships without valuation, the flat-rate fixing of shares in the capital without taking into account contributions in kind from SODIMICO, which finds itself in the minority even though it provides most of the business.
The IGF notes that since the creation of this company in 2002, it has not been able to develop a sustained industrial activity and has only experienced doorsteps, advances on royalties and dividends from a few partnerships.
One of the reasons which precipitated the fall of this company is the sale of the shares of SODIMICO SA in the joint venture SODIFOR for an amount of 30,000,000 USD to the subsidiaries of the company FORTUNE AHEAD, of which 20 million USD retained by the Government whose IGF control mission has no assurance that this amount has been credited to the General Treasury Account.
To revive this public company, the IGF recommends the following to the Congolese Government:
– Having taken 24,600,000 USD from the resources of SODIMICO SA, consider financing a plan to revive its industrial activities;
– Renew the current management of SODIMICO SA because it is out of
office and to breathe new life into the management of
this almost bankrupt State Portfolio company;
– Consider a final settlement of the dispute between SODIMICO SA and UNITED PETROLEUM regarding the seizure of 5 SODIMICO SA shares in KICC;
– Ask the current management for justifications for their involvement in the sale of SODIMICO SA’s shares in the SODIFOR joint venture as well as in the act of withdrawal from the mining assets of Lonshi and Lufua.
