The public sale of shares in Unitel, Angola’s largest telecommunications company, and the operator’s planned admission to trading on the country’s stock exchange represent a significant milestone in a privatisation programme that has so far offered investors few high-profile assets. Unitel is a rare exception — and on that basis alone, the transaction merits support.
Yet the deal carries a legal complication that cannot be treated as a footnote. Half of Unitel was transferred to the state by presidential decree in 2022, and the former owners continue to challenge that decision in court. Should they ultimately prevail, the consequences could extend well beyond the state and call into question the title acquired by new private investors.
Unitel’s prospectus states that the offering is designed to make shares available to both Angolan and foreign investors, with a separate allocation reserved for employees under the country’s privatisation law.
The offer covers 15 per cent of Unitel’s share capital — 13 per cent for the general public and 2 per cent for employees — and runs until July 24.
Although the Angolan state currently owns 100 per cent of Unitel — 50 per cent through the state asset manager IGAPE (Instituto de Gestão de Activos e Participações do Estado) and 50 per cent through state oil company Sonangol — the sale concerns only a portion of the directly held stake. Those shares were previously owned by GENI SA and Vidatel Limited, companies associated with General Leopoldino Fragoso do Nascimento, known as ‘Dino’, and Isabel dos Santos. Ms dos Santos is the daughter of José Eduardo dos Santos, the late president who governed Angola for 38 years; General Dino was one of his closest lieutenants.
GENI and Vidatel each held 25 per cent of Unitel. Their stakes were transferred to the state under Presidential Decrees 255/22 and 256/22, both dated October 28, 2022.
On page 100, the prospectus discloses that the nationalisation prompted at least two lawsuits and an application for interim relief. The former owners challenge the legality of the decrees, alleging breaches of constitutional and statutory principles. Their arguments include inadequate justification, the absence of a demonstrated overriding public interest, disproportionality and a violation of investors’ legitimate expectations.
The court rejected the application for interim relief, finding that the requirements for urgency, harm caused by delay and a sufficiently plausible legal claim had not been met. That left the nationalisation fully in force, preventing the former owners from regaining title or obstructing subsequent measures, including the privatisation now under way.
However, that ruling did not resolve the substance of the dispute. The main lawsuits remain active, and further claims may yet be brought. The prospectus acknowledges that the absence of a final judgment creates legal uncertainty over the ownership of the shares being offered.
Should the claims succeed, the state could be required to return the nationalised stakes, compensate the former owners or unravel complex corporate arrangements. In plain terms, part of the transaction could have to be reversed.
The decrees rested on broad public-interest arguments, but their central justification was legal proceedings against Ms dos Santos and General Dino. The government argued that those proceedings were impairing Unitel’s ability to maintain commercial relationships at home and abroad, thereby weakening its financial position.
In GENI’s case, the government also cited restrictions imposed on General Dino as its beneficial owner, including sanctions by the United States Treasury’s Office of Foreign Assets Control (OFAC).
This is where the legal vulnerability of the decrees becomes most acute.
The public record suggests that the proceedings cited as justification either did not formally exist in the relevant form at the time or had not advanced to the stage of charges. The known criminal case involving General Dino relates to CIF and has not resulted in a final judgment. The known court order committing Ms dos Santos to trial concerns Sonangol. Neither matter involves Unitel.
It remains unclear whether proceedings abroad are still active. Even if they are, establishing their relevance as a legal basis for nationalising Unitel would be difficult.
At a minimum, a measure as exceptional as nationalisation should have rested on an effective conviction at first instance. The absence of formal charges, adverse judgments or proceedings demonstrating a concrete and direct threat to the public interest casts serious doubt on the legal foundation of the decrees.
If the essential premise of those decrees — the existence of relevant and active judicial proceedings — was absent or legally insufficient, the nationalisation may lack an adequate legal basis. That could lead to its annulment and expose the state to substantial claims for damages.
The disclosure on page 100 of the prospectus is therefore not standard boilerplate. It describes a live and material risk that prospective investors should treat with corresponding seriousness.
A more prudent course would have been to establish a robust legislative framework before proceeding with the sale, underpinned by political consensus between the ruling MPLA and the main opposition party, UNITA. Such legislation could have shielded new private shareholders against subsequent legislative changes, state intervention or adverse future court rulings.
Without that preparatory groundwork, the privatisation is both legally fragile and politically contingent. A future president — even one drawn from the MPLA — could revisit a nationalisation carried out by presidential decree, while a future court ruling could reverse the entire process.
The episode exposes a structural weakness in Angolan governance. The presidency may appear all-powerful, yet state institutions do not always function in concert or at a common pace.
The attorney-general’s office failed to keep step with the economic and political timetable that drove the nationalisation and subsequent privatisation. The result is a significant legal risk embedded in one of Angola’s most consequential asset sales.
Source: Maka Angola
