The Presiding Judge’s Quixotic Dealings

Later this week, Angola’s Constitutional Court will rule on a challenge brought by opposition parties against the National Electoral Commission, claiming widespread malpractice in the conduct of the national elections held on August 31. As background to the forthcoming judgement, Maka Angola here recalls how the Chief Justice of the Constitutional Court, Rui Ferreira, has conducted his own business affairs.

The deal in question involved the purchase of a building that houses an upmarket Luanda nightclub, Dom Quixote. In 2007, Ferreira purchased the building on behalf of his business partner António Lisboa Santos, with an agreement that Santos would acquire the building from Ferreira after paying off the debt over a period of four years. Ferreira is now claiming that Santos pays him around $5 million, almost ten times the building’s purchasing price. Of this sum, US$2.2 million comprises interest charged at 75 percent on the purchase price of the building, valued at US$550,000. Ferreira demands a further two million dollars for improvement work, plus the price paid for the purchase.

On February 19, 2007, Ferreira signed an irrevocable agreement with António Lisboa Santos, chief executive of Organizações Lisboa Santos (OLS), that Ferreira would acquire the building from Sociedade Comercial Mota & Irmão. The deal included a mortgage agreement whereby OLS would make monthly payments to Ferreira over a period of four years, at the end of which Ferreira would transfer ownership of the building to OLS.

After trying unsuccessfully to contact Ferreira to discuss the transfer of title of the building as agreed, Santos took the case to the Luanda Provincial Court, thus making the Chief of the Constitutional Court a defendant. Ferreira, in turn, accused the management of OLS of being mistaken about the date of the partnership agreement, by which it was established that they would divide the profits from Don Quixote on an equal basis. However, the contract signed on August 29, 2002, names Lisboa António Santos as “legitimate administrator and owner of Don Quixote Club” with no reference to who legally owned the building.

Ferreira also accuses his partner of not paying rent to the landlord for several years, as a result of which Ferreira himself had had to pay US $112,000 in order to avoid eviction. However, faced with the legal case against him, Ferreira acknowledged that OLS would in the end have the right to own the Dom Quixote building as long as it made the agreed payments.

António Lisboa Santos secured the right to operate Don Quixote 20 years ago, and through a contract with Mota & Irmão, retained the right to purchase the building. The statement issued by Santos and signed by Ferreira and a witness does not deal with the payment of interest on the debt, which was to be paid in four years.

An economist who spoke anonymously to Maka Angola was shocked to hear that interest was being demanded at a rate of 75 percent per annum (a “brutally exploitative” rate) and described the judge’s demands as “shameful.” Interest rates charged by Angolan banks on business clients’ loans typically range between 10 and 24 percent per annum.