The Russian Response Tuesday, Nov 4 2008 

President Medvedev and Prime Minister Putin

President Medvedev and Prime Minister Putin

The Government of Georgia on the 12th of August 2008 filed a complaint at the International Criminal Court in The Hague, against the Russian Federation for alleged acts of ethnic cleansing, conducted on Georgian sovereign territory (South Ossetia, Abkhazia and adjacent areas within Georgian territory) between 1993 and 2008. The case comes against the backdrop of the humiliating defeat Georgia suffered in its attempt to seize the former territory of South Ossetia by force.

As far back as 1989 South Ossetia was already at odds with its Georgian neighbour over its demands for increased autonomy, and by 1991 had made clear its intention to secede. Following the collapse of the Soviet Union in 1991, the people of South Ossetia in 1992 and again in 2006, voted overwhelmingly in favour of independence. The 1992 vote provoked a level of violence between Ossetians and Georgians in the territory that required Russian intervention in support of an armistice, and led to the creation of a tripartite peacekeeping force which had managed a fractious peace until the night of 7.8.08.

The linguistically and historically distinct South Ossetia and Abkhazia, have been autonomous Russian protectorates or regions since 1810. Over the last sixteen years, South Ossetia has had its own constitution, parliament and president. The Russian rouble has been the preferred currency, and the possession of Russian passports seen as a guarantee of their freedom. Russia was content to let this stalemate with Georgia persist but the blundering arrogance of American foreign policy has contrived to force its hand.

A policy of encirclement has seen the North Atlantic Treaty Organisation (NATO) needlessly expand its membership up to the borders of the Russian Federation. NATO’s expansion, first proposed under the Clinton administration has reawakened Russian fears about encirclement by antagonistic forces. It seemed that America was pursuing a strategy of ‘containment’ to ensure that Russia would effectively be neutralised as a ‘threat’ to its ambitions in its new position as the world’s only super power.

Further aggravation came in the form of the ‘missile shield’ to be situated in Poland and American sponsorship of the Kosovo declaration of independence both of which Russia opposed vociferously. Spain’s Prime Minister Zapatero was a solitary voice in stating that acceptance of the Kosovo declaration was illegal under international law. Many Russians already felt that the west had a little too gleefully celebrated the demise of the USSR, and was deliberately slow and ineffective in helping Russia transform itself. It is no surprise that Putin remains the most popular politician, credited as he is with restoring order, strength and pride, to a nation that was once floundering. American policy has managed to ensure that a now capitalist and increasingly prosperous Russia remains acutely suspicious of its intentions around the globe.

It is difficult to understand the motivation of the Georgian president Mikhail Saakashvili. It may be that his many internal political difficulties required the diversion a war provides. If his many lunches with the lame-duck president of the United States had persuaded him that Georgia was of such vital and strategic importance that U.S. personnel would actively intervene, with the ultimate threat whispered down the hotline to Moscow, he was to be proved tragically wrong. On the night of 7.8.08, Georgian troops in a surprising move, stormed the territory of South Ossetia, seized its capital Tskhinvali and unleashed a barrage of shells and rockets on its residents. Human Rights Watch, claims there is much evidence of inappropriate and indiscriminate use of force against the civilian population, evidence suggestive of war crimes. Their estimate of casualties is between 3-400. With the parliament building destroyed, the city centre in flames, and the Russian peacekeepers in disarray the Georgian forces had reason to think success was at hand.

The impassioned appeals of the South Ossetians dominated the news cycle, showing as they did, a people overwhelmed and put to flight by a neighbours aggression. The people of North Ossetia and Abkhazia were outraged and vowed to send irregulars to aid the resistance. Across Russia there was a determination that this attack by a former constituent part of the empire demanded a swift and unequivocal response. Prime Minister Putin cut short his attendance at the opening ceremonies of the Beijing Olympics to take charge of the situation and within five days of initiating the counter-offensive, South Ossetia was free and Russia was in control of vast swathes of Georgia. With the crippling of Georgia’s military infrastructure, its ability to threaten and intimidate its neighbours has been significantly curtailed.

Low-level criticism from nameless American officials describe the offensive as “ill-prepared and ill-conceived”, while Britain’s Foreign Minister David Miliband has admitted that Georgia was “reckless”. The strongest criticism has been reserved for Russia whose response has been characterised as “excessive” and an “overreaction”. The columnist William Pfaff puts it well when he says, “this response evades acknowledgement that the real damage President Mikhail Saakashvili of Georgia has done has been to the United States and NATO, and to Georgia itself, which for the foreseeable future will be a nation of limited sovereignty, and an awkward embarrassment to its Western allies”.

Georgia is a troubled nation stumbling seemingly perpetually in crises. Mikhail Saakashvili presides over an increasingly repressive state where dissenting voices are not tolerated and critics now find themselves followed, bugged, threatened, and often assaulted. The oxygen is slowly being sucked out of Georgia’s pretence at democracy. A base nationalism now taints all discourse as Saakashvili uses every means to preserve himself in power and suppress the opposition. His preposterous claim is that a scheming Russia beguiled Georgia into attacking South Ossetia.

It is hard to imagine how the Abkhazians and South Ossetians could once more live within the borders of Georgian state. Their independence has been hard won, and the blood shed over the last two decades will not easily be forgotten or forgiven. The new republics of Abkhazia and South Ossetia are not immediately concerned with western recognition of their independence. The Russian Federation is a more relevant guarantor of their status and security. Georgia’s allegation of ethnic cleansing has no foundation and only serves to heighten tensions in the region.

It would serve the best interests of the U.S. and international security if Georgia were to withdraw the case against Russia and act to re-establish good relations with its neighbours. The International Criminal Court should not become the stage for post-war theatrics if it is to preserve its reputation. In as much the U.S. considers the independence of Kosovo irreversible, Russia will prove similarly inflexible where Abkhazia and South Ossetia are concerned. In the middle of the current global financial crisis, and with the burden of Iraq and Afghanistan, the Western alliance has little inclination or strength to expend in support of Georgia’s hubris.

TRANSCORP implodes as F.G. reverses sale of NITEL/Mtel Monday, Feb 18 2008 

TranscorpThe fortunes of Transnational Corporation an attempt by the Obasanjo government at creating a mega-corporation capable of driving industrial development in Nigeria, have collapsed dramatically as the Minister for Information and National Orientation, Mr. John Odey, announced on Saturday the reversal of the sale of NITEL and its mobile telephony subsidiary Mtel. The Minister attributed governments decision to the volume of complaints regarding the manner in which NITEL/Mtel was sold, and the “failure of Transcorp to achieve the objectives of the privatisation guidelines”. This decision is the fourth reversal of a privatisation exercise since the Yar’adua assumed office on May 29, 2007.

The minister explained that the details of the ‘revocation’ remained to be worked out but it appears that Transcorp will be compelled to sell-down its 51% holding to a maximum of 10% with the government also reducing its 41% stake. Once again the search for a transparent process and an experienced core investor for the failed telecoms company begins.

Mr. Tom IseghoiThe sale of NITEL/Mtel to Transcorp came after three failed attempts by the Bureau of Public Enterprises (BPE) to sell of 75% of the governments shares in the under-performing telecoms company. In 2001, International Investors of London Limited (with the prescient acronym IILL) failed to make timely payment for its winning bid and thus forfeited its 10% deposit of $131m. The bid was largely funded by First Bank of Nigeria Plc. whose chairman at the time, Mr. Bernard Longe, paid the price of failure by being removed by the board. He was later to emerge briefly, as an executive of Transcorp Plc. In December 2005, the government rejected the highest bid to emerge for NITEL/Mtel made by Orascom Telecoms of Egypt to the tune of $256m. A 51% holding in the company was eventually sold to Transcorp Plc. by
negotiation for $750m in July, 2006.

Transcorp Plc. while publicly hailed as an attempt to stem the flow of
major enterprises into the hands of foreign interests, and a spark that
could ignite greater industrial development in Nigeria by virtue of its
breadth of interests and the collective strength of it founding members
with the cream of Nigerian Industry listed as participants and promoters.

Transcorp directors meet the PresidentChief Olusegun Obasanjo (former President of Nigeria)
Prof. (Mrs) Ndi Okereke-Onyiuke (DG, Nigeria Stock Exchange/Chairman, Transcorp)
Mr Bernard Longe (Group Managing Director/CEO, Transcorp)
Mr Nicholas Okoye(Group Executive Director, Operations Transcorp)
Mr Chukwunoye Ofili (Executive Director, Finance Transcorp)
Mr Tony Elumelu (Managing Director, United Bank For Africa)
Mr Jim Ovia (Managing Director, Zenith Bank)
Mr Jacob Ajekigbe (Managing Director, First Bank of Nigeria Plc)
Jim Ovia – Zenith Bank Plc.
Mr. Fola Adeola – Former Chairman of the National Pension Commission and Group MD of Transcorp
Alhaji Aliko Dangote – Dangote Group of Companies
Mr. Femi Otedola – Zenon Oil
Mr. G.U Okeke

Transcorp directors prepare to meet the PresidentHowever the problem with Transcorp was that it was widely perceived to be a collective of disparate interests close to the former President with an interest in profiting from the disposal of government assets. The bulk of Transcorps assets are constituted by properties purchased from the federal government. It began with the acquisition of the of NICON Hilton Hotel, Abuja, for $105m in 2005, through NITEL/Mtel, and oil blocks. In all it acquisitions there were suspicions of government bending over backwards to
accommodate the company. After winning the bid for NITEL/Mtel, Transcorp was unable to meet the one week deadline for payment of 50% of the bid price, raising only 10% ($75m). In a seminal analysis of the company’s prospects, Ms. Ijeoma Nwogwugu of This Day newspaper wondered how the corporation was going to pay dividends and service the interest on the debt it had already raised to finance the refurbishment of the now renamed Transcorp Hilton, and the debt it would need to raise for the development of its oil blocks and the refurbishment and expansion of NITEL/Mtel (the latter two projects being long-term in nature) when it had only the hotel to produce cash flow, NITEL/Mtel being hardly able to cover its own costs.

Transcorp Plc. has transparently failed to effect any noticeable change at NITEL/Mtel, and instead stands accused of cannibalising the company, retrenching workers contrary to its agreement with the BPE, attempting to cede the SAT-3 service to third parties, scrapping medical facilities for NITEL staff and owing staff salary arrears of up to six months, this in spite of its having raised N20bn from the investing public in 2007. President General of the Senior Staff Association of Communication, Transportation and Communication (SSACTAC), Mr. Adetunji Adesunkanmi, said that without the right back-up, financially and technologically, Transcorp cannot manage the telecommunications outfits. The allegation is made that substantial portions of land belonging to NITEL/Mtel have been sold off and there is little evidence of the proceeds of the public offer being applied to revive the company. It is estimated that NITEL now has less than 80,000 functional lines and Mtel, 30,000.

There is little doubt that many of the initial investors had a timescale within which their investments in Transcorp were scaled back, and since the public offer, the share price of the company has languished leaving participants in the offering facing significant write-downs and outright losses. With the sale of NITEL/Mtel revoked and the purchase of the Transcorp Hilton now under investigation, it is uncertain what remains of the the corporation and what might be salvaged. It might be harsh to say
that Transcorp was a stock market bubble promoted by political interests for political reasons and not business reasons. With the head of the Nigerian Stock Exchange also acting as the chairperson of the company it remains to be seen if the internal processes of the company will be investigated effectively, or indeed if Mrs. Okereke-Onyiuke will do the honourable thing and resign her position at the Exchange.

NOTE: The original investors in Transcorp, including former President Olusegun Obasanjo who had 200 million shares in his so-called ‘blind-trust’, bought into the company at N1 per share. The failed public offer was priced at N7.50 per share with only 36% of the IPO taken up. The company’s shares which have traded as high as N12 and as low as N2.90, closed last Friday at N4.42.

Transcorp share price last week

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