THE estate of John C. M. Kalenga has written the Anti-Corruption Commission to investigate the transfer payments of their late father’s money through the Ministry of Justice in excess of K235 million to a Swiss account belonging to Vinod Sadhu.
John Kalenga and Mususu Kalenga, the administrators of the Estate of John C. M. Kalenga, claimed Vinod, Indhira Sadhu, Nishima Sadhu and Uddit Sadhu corruptly and fraudulently transferred shares in Sun Pharmaceuticals Limited and were illegally externalising funds payable to Sun Pharmaceuticals Limited.
In a letter dated January 23, 2019, the brothers stated that they were beneficiaries and administrators of the estate of late Kalenga, who was the proprietor (in his own name and through his company Zambian Modern Enterprises) of the majority shares in Sun Pharmaceuticals Limited, formerly Frank & Hirsch Limited.
The duo believes that the Sadhus, through PACRA, corruptly, fraudulently, altered the companies register in relation to Sun Pharmaceuticals Ltd and transferred the shares of late Kalenga to their personal names.
“This could only have been accomplished through the Sadhus having corrupted officers at PACRA. The file from PACRA and even the company printouts have been deliberately altered to cover up the fraud,” the brothers stated. “Our father, Mr John C M Kalenga, was prior to his death, the proprietor of a company called Frank & Hirsch (Z) Limited which later changed its name to Sun Pharmaceuticals Limited. He passed away on 3rd August 1993, and prior to his passing, he had employed an Indian national by the name of Vinod Sadhu as managing director.”
The duo stated that at the time of Kalenga’s death, the brothers were adolescents and their mothers, Winnie Hamalabi and Elizabeth Kalenga were appointed administrators of the estate.
“The estate was substantial,” the brothers stated. “After our father’s death, Sun Pharmaceuticals Limited was engaged in lengthy litigation against Development Bank of Zambia which the previous administrators, Winnie Hamalabi and Elizabeth Kalenga, left in the hands of Mr Vinod Sadhu as managing director. The litigation was only concluded sometime in 2007 by virtue of a Supreme Court judgment under [cause number] SCZ/8/30/2004 whereby Sun Pharmaceuticals was awarded Swiss Francs 14,440,815.27 as damages, which was the equivalent of almost US$14 million. It is our belief that at some point during the litigation, Mr Vinod Sadhu fraudulently and by corrupt practices moved all the shares in Sun Pharmaceuticals Limited into his own name and included his wife and children as shareholders, basically moving the entire shareholding into his family’s name.”
The Kalengas stated that the Sadhus never purchased the shares from late Kalenga, the previous administrators, or the current administrators.
“…We wrote letters to Mr Sadhu in 2009 and later to PACRA seeking documentations to justify this change in shareholding but despite numerous follow-ups, to date, we cannot find the complete Sun Pharmaceuticals Limited file at PACRA and none of the PACRA officers has so far been able to explain how these shares were moved from our father’s name into the Sadhu’s names,” they stated. “There is no documentation whatsoever to witness how the shares were obtained by the Sadhus, not even a property transfer tax receipt (PTT) to show the tax paid upon purchase of the shares or how much was purportedly paid. There are no share transfer forms, board resolutions or even a contract to evidence the purchase of the shares.”
They stated that about 2012, they bumped into information that the Sadhus had in fact been privately receiving the money due to Sun Pharmaceuticals arising from the Supreme Court judgment.
“The money was being paid to the Sadhus through Ministry of Justice. We engaged Mr Michael Mundashi, SC who wrote a letter of enquiry to Ministry of Justice asking how and to whom the Sun Pharmaceuticals payments were being made. The letter is dated 16th January 2012 and is addressed to the then Attorney General. No response was given by the Attorney General to this letter,” they stated. “In 2016, we engaged another lawyer, Mr Jeah Madaika of J&M Advocates, who wrote another letter to the Attorney General’s chambers dated 5th February 2016, seeking information about how and to whom the Sun Pharmaceuticals Limited funds were being paid. This time, a response came from the Ministry of Justice dated 23rd February 2016 under the hand of a Mr Joe Simachela (Chief State Advocate). The letter claimed that Messrs George Kunda and Company were the lawyers and were the recipients of all the monies paid out. Our inquiries later revealed that Mr Simachela had misled our lawyers as to George Kunda and Company receiving the funds. We later obtained documentary proof in the form of a statement of account which showed that Ministry of Justice, through the Attorney General’s Chambers was paying the Sun Pharmaceutical Limited funds into an account opened and operated in Switzerland solely by the Sadhus who had since even relocated from Zambia to India.”
The brothers stated that the Ministry of Justice could not offer a satisfactory explanation on how funds due to a Zambian company could be paid into a secret foreign account in Switzerland.
“We accordingly reported the matter to the Zambia Police Frauds Department at Force Headquarters and we are aware that the dealing officer wrote to Ministry of Justice to have all payments concerning Sun Pharmaceuticals Limited halted pending conclusion of police investigations. However, we are reliably informed that the Attorney General’s Chambers sanctioned payments to continue being made to Mr Sadhu and three payments totaling in excess of K2 million were made to the same Swiss Account – (i) a payment of K1,500,000.00 was made on 21stAugust 2018; (ii) another payment of K500,000.00 was made on the same day, 21st August 2018; and (iii) a further payment of K600,000.00 was made on 16th December 2018,” they narrated. “We are not sure of the other payments that may have been made after December 2018… To date, the Sadhus have received in excess of K235,521,915.56 into the aforesaid Swiss Account. These are colossal sums and are unaccounted for. To this end, we have copied in the Minister of Justice [Given Lubinda] and the Presidential Affairs Minister – State House [Freedom Sikazwe]. To our knowledge, no taxes have been remitted to Zambia Revenue Authority (ZRA) on these funds, meaning the foreign nationals (the Sadhus) are enjoying the funds provided by the Zambian government without any tax obligation. To this end, we have copied in the Commissioner General of ZRA [ Kingsley Chanda] to look into the issue of the taxes.”
The brothers stated that they had taken out, in addition to the criminal complaints, a civil claim which was currently under appeal in the Court of Appeal on the question as to whether “our civil action is time-barred.”
“However, we take solace in the fact that there is no time-bar for criminal actions,” stated John and Mususu. “We therefore, write to ask your good office to cause thorough investigation as to corrupt practices relating to the manner the Sun Pharmaceuticals Limited issue has been dealt with both at PACRA and Ministry of Justice…. We are available, at your invitation to provide statements to your officers in person and to provide all the documentation we have in our possession.”