Leaked data from Mossack Fonseca
On the surface, the contract between Markwell and Pinsong, two shell companies with no owners or substantial business activity, appears a little unseemly but also legal and unremarkable, as offshore dealings often are.
Pinsong, the principal, paid a fee of €15-million to Markwell, the agent, in 2007 to assist a third party obtain Angolan deepwater oil concessions.
But leaked data from Mossack Fonseca, a Panama-based offshore service raises questions about how these entities assisted others in obtaining the rights to drill for Angolan oil.
Analysis of more than a thousand documents reveals the involvement of leading Angolan political and military figures and connects this payment to an ongoing United States trial involving a corporation that allegedly bribed Angolan officials to acquire equity stakes in lucrative oil concessions.
Who’s the mark?
In November 2007, the Swiss-based Espírito Santo, part of the sprawling Portuguese financial institution known as Group Espírito Santo (GES), emailed a contract to Mossack Fonsenca. The contract stipulated that Markwell would assist “in all the efforts … necessary to support ANR-Angola Natural Resources”. This included landing equity stakes in major oil concessions.
Pinsong promised to pay into Markwell’s Swiss bank account in three equal tranches. The final tranche of €5-million was to arrive when the concessions were awarded to Angola Natural Resources (ANR).
The companies appear to be new. Both Pinsong and Markwell were incorporated in the British Virgin Islands. But who is the third party, Angola Natural Resources, whose interests Pinsong and Markwell seem to have been created to promote?
Back in June 2007, Espírito Santo wrote to Mossack Fonseca inquiring about a name change for another company, Middle Mining Ltd. Espírito Santo suggested two: Angola Natural Resources Ltd (ANR) and Africa Natural Resources Ltd (ANR). The name Africa Natural Resources was available, though earlier versions of the contract cite Angola Natural Resources.
Espírito Santo followed up to request that shares in ANR be issued to Escom Investments Group under the authority of José Hélder Bataglia dos Santos and Pedro Manuel de Castro Neto. Founded by Bataglia and GES in 1993, Escom describes itself as one of the largest investors in Angola and the Democratic Republic of Congo. Escom is involved in mega-deals such as infrastructure and mining. It also identifies itself as a point of contact for large international entities seeking to invest in Angola. ANR is a subsidiary of Escom Investments BV.
By November 2007, the final version of the contract is issued, carefully guarded over by Espírito Santo’s representative.
The licensing round for oil blocks to be auctioned by Angola’s state-owned Sonangol – then under the leadership of Manuel Vicente, one of Angola’s powerful strongmen – is three months hence, in December 2007.
The oil blocks include 9, 20, 21 and Centro. Leaked data shows Escom’s Pedro Neto is also a director of Pinsong.
Publicly accessible data shows Markwell’s nominee director is Andrés Sánchez of Alemán, Cordero, Galindo & Lee – an infamous Panamanian offshore provider that has, via Sanchez, aided in the laundering of money for well-known criminals such as Chilean dictator Augusto Pinochet.
Sources claim Sanchez is a long-time fiduciary trustee for GES, particularly for Panama where multiple GES entities were based. Markwell’s beneficial owner, claimed one investigator, is none other than Escom founder, Bataglia.
Confidential documents surrounding a network of about 15 companies, including Markwell and Monkway showed UBS bank accounts to funnel monies to political elites in Portugal directly connected to Bataglia. UBS did not respond to questions about due diligence concerning source of funds, saying: “Laws and regulations prohibit us from commenting on individuals and whether they have been or are clients. This also prevents us from disclosing if authorities launched an investigation as a result of reports received from us.”
UBS also claimed to be fully compliant with the law. Markwell’s bank account number (0206 344 429) sent and received more than $12-million during 2008 and 2009.
Other sources claimed it was connected to Sonangol’s own Vicente, citing Grupo Aquattro’s 24% purchase of Banco Espírito Santo Angola also part of the Espírito Santo Group, then a 33% shareholder of Escom. The purchase, made through Aquattro’s subsidiary, Portmill, linked Vicente and Kopelipa to GES’s core business interests in Angola.
Details of the beneficial owners of an offshore company like Markwell are elusive. Opacity is one of the benefits of doing business, legally or not, through shell companies in foreign jurisdictions.
What is clear is that whomever owns Markwell was paid €15-million to facilitate ANR, and thus Escom, obtaining equity stakes through unstated services.
Attempts to contact Escom, Bataglia and Pedro Neto proved futile. Emails listed on the company’s website bounced back. Escom’s listed numbers appeared old or disconnected save for the Netherlands office, which did not answer. The Angola office representative claimed the emails were confidential but provided us with a general email, which did not work. Corporate data shows some Escom entities had been dissolved by 2015.
Sonangol did not respond to interview requests. Vicente could not be reached. Attempts were made through Sonangol’s Angola and United Kingdom offices.
Seven years on, in 2014, some of these oil blocks came under investigation by the US judicial system.
A class action lawsuit alleges that US oil company Cobalt International Energy paid foreign officials to secure oil concessions – including Sonangol’s Manuel Vicente and the head of Angola’s military and security intelligence department, General Manuel Hélder Vieira Dias Jr, also known as Kopelipa.
If so, the Houston-based Cobalt has violated the US’s Foreign Corrupt Practices Act of 1977. In 2009, Cobalt’s chief executive Joseph Bryant announced a “world class” partnership to drill offshore oil with Sonangol, as well as two unknown companies: Nazaki Oil and Gáz, and Alper Oil. Cobalt claimed to have conducted “extensive due diligence”.
That does not appear to have been a lie – albeit a different sort of due diligence. While Markwell may have provided legitimate services to Escom and ANR, it is also possible that the €15-million payment was payment to perform a scoping exercise of how to negotiate vested interests involved.
The landscape of Angolan politics determines the outcome of oil and diamond deals: this seems to include financing a patron. Bryant had already cultivated close ties with Sonangol’s Vicente while working in Angola through other companies such as Amoco. Vicente himself said in a rare interview, dated 2012, that he knew Bryant, “very well”.
According to court documents, Cobalt claimed it had never heard of Nazaki prior to July 2008 following approval of the company by Angolan government. Nor had it heard of Alper, until Sonangol’s introduction in October 2008. The companies were included as part of the deal through mandatory risk service agreements. Cobalt agreed to the partnership.
Cobalt’s former chief financial officer called the deal a fait accompli, saying the Angolan government “called the shots”. The breakdown was 40% Cobalt, 20% Sonangol, 30% Nazaki and 10% Alper.
Senior Cobalt officials confirmed that the company was aware, from early days, of the political players behind Nazaki and Alper. Nazaki’s 99% shareholder, for instance, was Grupo Aquattro owned by Vicente and Kopelipa.
The same physical address was used by more than 40 companies connected to Vicente and Kopelipa, alongside a third critical member of Angola’s powerful trio: the former head of communications for the Angolan presidency, General Leopoldino Fragoso do Nascimento, known as Dino.
Cobalt itself held one offshore entity in the Cayman Islands for every oil block including block 9, 20, 21. The purpose of these companies is unknown.
Sonangol later assumed total control of both Alper and Nazaki stakes following media exposure. Sources confirmed that a company called Sonils financed the salaries of a skeleton staff at Vicente’s Alper.
Corporate data shows Sonils as a Sonangol subsidiary (30%) during 2013. Intel Finance, registered in the Isle of Man, is listed as a 50% shareholder from 2005 with unknown beneficial owners. Sonils’ ultimate owner is the Angolan government.
It had been acknowledged by Cobalt’s senior management early on that neither Alper nor Nazaki would play an actual role. In early 2015, Cobalt (still under investigation) exited the offshore deal selling their 40% stakes back to Sonangol for $1.75-billion. Cobalt did not respond to inquiries at the time of publication.
The deal between Markwell and Pinsong suggests a rigged landscape where shell companies seeking to influence deepwater oil concessions are tied to the highest levels of power in the regime.
Angola’s double offshore is a high stakes game where the winners, companies and political elites, make necessary efforts to take all. The losers are Angola’s citizens. But, like the beneficial owners of shell companies, they will not be placed on the record.
This article was produced by the African Network of Centres for Investigative Reporting (ANCIR), with funding from a Connecting Continents grant.