SkyscraperCity banner
1 - 3 of 3 Posts

·
Registered
Joined
·
476 Posts
Discussion Starter · #1 ·
A court in Jersey in the Channel Islands ordered a joint venture partly owned by OM Group Inc. to pay a distressed-debt investor more than $100 million dollars owed by the Democratic Republic of Congo.

Groupement de Terrils de Lubumbashi, or GTL, must send “all future payments” owed to one of its partners, Congolese state- owned miner Gecamines, to FG Hemisphere Associates LLC until it satisfies a debt claim, the Royal Court said in e-mailed court documents today. FG Hemisphere, a so-called vulture fund, is trying to collect on a 1980s-era debt owed by Congo.

OM Group, the world’s biggest cobalt producer based in Cleveland, Ohio, is the majority owner of GTL, which is registered in Jersey. Gecamines owns 20 percent and George Forrest Group owns 25 percent.

The court rejected GTL’s claim that it lacked jurisdiction and said FG Hemisphere could collect the debt through Gecamines because it is “an organ of the state.” GTL, Congo and Gecamines can appeal the decision, according to the documents.

OM Group didn’t immediately respond to e-mail and voicemail requests for comment on the decision. Gecamines Director General Calixte Mukasa called the decision “incredible and revolting” when reached by phone today in Lubumbashi. The company will appeal, he said.

FG Hemisphere bought the debt in 2004 from Energoinvest d.d., a Sarajevo-based company that won two arbitration cases against Congo at the International Chamber of Commerce in 2003 over unpaid loans. The loans, which originally totaled about $37 million, according to the court documents, were for power- transmission lines and a hydropower dam near Gbadolite, the home of former Congolese dictator Mobutu Sese Seko. Mobutu died in 1997.

Growing Debt

The debt is now worth more than $100 million in principal, fees and interest, and grows by about $27,500 a day, according to Jersey Court of Appeal documents. Attempts to negotiate a settlement failed, according to the Royal Court documents.

Since buying the debt, FG Hemisphere has frozen hundreds of millions of dollars owed to Congo through court cases around the world in an attempt to enforce the ICC’s 2003 ruling.

In November 2008, a South African court effectively halted sales of electricity from Congo to South Africa by ruling that FG Hemisphere could seize any payments for Congolese power sold to the country. In February, Hong Kong’s Court of Appeal froze about $100 million from a signing bonus for Congo’s $6 billion minerals-for-infrastructure deal with China until the ICC claim is resolved. Congo is in the process of appealing.

Payments Frozen

Through June 30, the Jersey injunction had already frozen $57.7 million owed to Gecamines by GTL, according to OMG’s second-quarter report. The company releases its third-quarter report tomorrow. GTL operates a smelter in Congo that is OMG’s primary source of cobalt.

FG Hemisphere has also tried to seize Congolese diplomatic property in the U.S., according U.S. Court of Appeals documents. Last year, the fund tried to confiscate payments to Congo by a joint venture involving Randgold Resources Ltd. and AngloGold Ashanti Ltd. In February, a Jersey court denied the request, saying it could have ruined a deal in which the two companies took control of Africa’s largest unexplored gold field, according to Jersey Court of Appeal documents.

An FG Hemisphere official, who declined to be identified because the case may face an appeal, wouldn’t comment on the decision when contacted today by e-mail.

Vulture funds buy debts at a discount when a country is in default and attempt to recoup as much of the funds as possible through negotiation or litigation.

Congo is rich in natural resources including gold, copper, cobalt and diamonds, according to the U.S. Geological Survey. The country is recovering from more than four decades of dictatorship and war that destroyed its infrastructure.

http://www.bloomberg.com/news/2010-...lose-100-million-vulture-fund-debt-claim.html
 

·
Registered
Joined
·
4,245 Posts
I am glad those fools lost the case, otherwise DRC would have had all types trying to take advantage and squeeze some $$ out of an already financially struggling nation.
 

·
Registered
Joined
·
4,245 Posts
update

Occupy Wall Street comes home to roost with Congo's 'debt vultures' video

This past Sunday, a deputation from Occupy Wall Street crossed the bridge from Manhattan and brought its protest to the Brooklyn residence of one of New York's "vultures" This type of vulture doesn't roost in a tree, but in a swish brownstone in the gentrifying neighborhood of Brooklyn's Clinton Hill. OWS will be visiting again this Sunday.

A "vulture" is a financial speculator who, as we recently reported, gets his hands on debts owed by desperately poor nations. The Brooklyn "vulture" targeted by OWS and Friends of the Congo is Peter Grossman. Two weeks ago, the Guardian exposed him as a financier who is demanding the Democratic Republic of the Congo, the world's poorest nation, pay $100m to the hedge fund he manages, FG Hemisphere.

Grossman, tipped off about the demonstration, was apparently absent from his brownstone. Nor was he at his "office", the two-car garage that his billion-dollar hedge fund uses as an official address. Police attended, but were content to spectate, hands off.

The OWS marchers had come at the call of Friends of the Congo. Ayman El-Sayed, a registered nurse who has worked in the medical tent at Occupy Wall Street, explained why:

"We want to connect what Peter Grossman is doing to the Occupy Wall Street movement – that he's a part of the 1% that's trying to rip off a nation; that Occupy Wall Street is a domestic issue, but we're trying to connect it to the international struggle as well – whether it's the people in the Congo, or people in Egypt, or anywhere else."

Spokesman for Friends of the Congo Kambale Musavuli was heartened by the alliance with OWS. A previous demonstration against vulture financiers attacking Congo had drawn Africans only. The new alliance is a big step for both groups.

These past couple of weeks, I have been running around the US reporting from half a dozen occupations, all now swept away by police action. But what I had witnessed was the Occupiers had already begun building what the "old left" used to call "links on the chain".

The move from fighting for park space to fighting for issues is taking practical shape in, for example, Wisconsin. In Madison, the Occupy movement's alliance with the public service unions has become the engine of what is likely to be a successful drive to recall anti-labor Republican Governor Scott Walker. In Chicago, at the Teamsters Hall last week, the president of the United Electrical Workers in the midwest, Carl Rosen, told me he was offering to shelter the Occupiers for a night a week during the brutal Chicago winter.

I don't think the 1% can be pleased. Labor giving the Occupy movement shelter also gives them legitimacy – and vice versa, as young folk get an education in the practical struggles of working people who can't leave the loading dock to live in a tent.

And it's spreading. I'm writing this in Washington, DC, where Occupy activists have agreed to join forces with TransAfrica and others to go after Grossman's associate, a financier who goes by the moniker "Goldfinger". Goldfinger's office is close by the White House, and he may soon find that he isn't the only person "occupying" his office or mansion.

As for OWS itself, which has dispersed to changing locations, activists are linking up with environmental groups fighting "fracking", an environmentally dangerous method of drilling for gas, and preparing for the next occupation of "vulture" Grossman's neighborhood.

This redirection of activist energy – into new alliances and an expanded focus – could turn the Occupy movement into a wider, yet more powerful phenomenon. The 1% must be dismayed to learn that eviction does not end conviction.
 
1 - 3 of 3 Posts
Top