Sunday, August 1, 2004


Exposed: The new faces behind molasses plant
By John Kamau
The name Antonio Teixeira may not ring any bells in Kenya. But in international circles, the chairman of Energem Resources, which bought a 55 per cent stake in the Odinga family’s Spectre International –sends several alarms.

His entry into Kenya’s business circles is expected to raise eyebrows because of past business links with "mercenary" companies hired to protect mining companies in some of Africa’s bloodiest war zones, The Sunday Standard can exclusively report.

Four years ago, the South African Portuguese, also known as Tony Teixeira, was accused in the British Parliament of gun-running for Angola’s Unita rebels and for defying United Nations sanctions by supplying oil to the rebel movement.

Now questions are being raised about the controversial man behind a Canadian company that purchased the troubled Kisumu molasses plant from the Oginga Odinga family.

Teixeira has been linked to Branch Energy and Executive Outcomes, two notorious private security-cum-paramilitary companies with a record of involvement in war wealth.

Branch Energy, which had mining concessions in Sierra Leone, is 100 per cent owned by Teixeira’s Energem, is one of the pioneers in the provision of private security in return for mining concessions in war-torn nations. Executive Outcomes, on the other hand, was founded by a former Teixeira ally, Tony Buckingham, who recently sat on the board of Energem Resources.

Buckingham, a former South African soldier, was a member of the dreaded South African apartheid-era assassination squad, the 32nd Battalion, and was also behind the British mercenary company, Sandline, which in 1999 broke a UN arms embargo in Sierra Leone, allegedly with the backing of the British government.

Sandline, however, closed shop in April, this year, citing failure to get British support for its private military activities.

According to an Energem company profile obtained by the Sunday Standard, Teixeira’s newly registered company, Energem Kenya Limited, is licensed to "import refined oil products" and "bitumen for the Ministry of Roads", headed by Raila Odinga. It is the award of an exclusive contract to a company associated with the Odinga family by a ministry headed by a member of the same Odinga family that sparked the row over the acquisition of the Kisumu molasses plant last week.

But Teixeira is not new to controversy.

Last year, another of Teixeira’s companies, Trans Sahara Trading (TST), was stopped from supplying oil to Zambia by President Levy Mwanawasa, who cited "irregularities" in the award of the tender.

And now, Teixeira’s ownership of the Kisumu molasses plant has thrust him to the centre of another dispute only eight months after he announced that his company had acquired a controlling stake in the moribund ethanol plant.

Bondo MP Dr Oburu Odinga, who is also the chairman of East African Spectre, which partly owned Spectre International, says the family has "no interest" in the ethanol maker after pulling out last November.

The current storm was kicked up by newly appointed Urban Development assistant minister Maina Kamanda, who accused the Odinga family of "grabbing" the land occupied by the plant, "failing to pay for it" and later selling it to Canadians.

Official documents now indicate that the land in question was offered to Spectre International by the then Commissioner of Lands, Mr S.K Mwaita, in a letter dated January 11, 2001.

The value of the entire land measuring 112 hectares was put at Sh3,699,750. Twenty-three months later, Teixeira’s DiamondWorks, renamed Energem, acquired a controlling stake in Spectre International and paid $2 million (Sh160 million) for a stake in the Odinga family-owned enterprise.

But the molasses saga deepened further after the Ministry of Lands and Housing issued a brief this week saying there "is no record of official valuation of the property by the chief government valuer".

Although the molasses plant was supposed to have been auctioned, the ministry’s brief raised questions on the transaction: "What appears to have been processed for sale is empty land and there is no record of how the physical infrastructure investment on the stalled project (was) sold and for how much."

"The land deal was a direct allocation to Spectre International and there is no indication of other offers being sourced in the absence of official valuation".

Dr Oburu Odinga who sits on the board of Spectre International with his sister, Ruth, has denied any impropriety on the family’s part.

With the matter now being investigated by a Cabinet committee, Kenyans have not heard the last of the matter.

It seems curious that the offer of the molasses plant land was made to Spectre International some five days after the Raila’s National Development Party (NDP) entered into a partnership with then ruling party, Kanu.

Although Oburu denied that the Odinga family owns the molasses plant, he conceded that two family members sit on the board of Spectre International.

Texeira entered Kenya’s business world through one of his subsidiary companies, Petroplus Africa Limited, which concluded a memorandum of understanding with the National Oil Company of Kenya (NOCK) and a separate "hospitality agreement" with the state corporation, Kenya Petroleum Refining Ltd, Kenya Pipeline Company and NOCK’s Nairobi Terminal.

"These arrangements were entered into for purposes of enabling Petroplus’s entry into the Kenyan market and to facilitate its ability to undertake a review of the mid-stream oil industry in Kenya aimed at its modernisation and development," the company said in a statement in November last year.

Under the auspices of NOCK, Petroplus imported two trial shipments of oil products in April and May and was awarded its own oil importation and trading licence for Kenya in June 2003.

"The test results were positive and supported the decision by DiamondWorks (now Energem Resources) to acquire control through Spectre of the Kisumu ethanol plant," the company said.

That entry, we have established, came after another of Energem’s subsidiaries faced problems in the Zambian market where Teixeira reported "difficult trading conditions" in a statement he issued to shareholders in October last year.

Although Teixeira’s name has not featured in Kenya, the allegations of gun-running made in Britain that his operations in Angola, Sierra Leone and Liberia made a fortune out of blood diamonds is bound raise a lot of heat.

In its company profile, Energem Resources says it is "supplying bitumen and other products to the Roads and Energy ministries", an issue that could generate political heat in Kenya.

Texeira came to the board of DiamondWorks, now known as Energem Resources, in January 2000 when his Isle-of-Man registered company, Lyndhurst Limited, advanced $5 million to the ailing DiamondWorks. The loan was converted into shares.

But the company appears to have run into trouble with Canada’s Ontario Securities Commission, which stopped the board from sitting in April 2002 and accused its members of "failing to file financial statements" and to "disclose" the affairs of DiamondWorks.

The company immediately changed its name to Energem Resources.