Chairman of Angola’s Bank BAI Accused of Misappropriation of State Assets
Allegations of corruption have re-surfaced against the head of Angola’s largest private bank, the BAI (Banco Angolano de Investimentos),after a formal criminal complaint against Board Chair José Carlos de Castro Paiva was lodged with the Angolan Attorney-General on Monday. Paiva is alleged to have diverted state assets worth millions of US dollars into private shell companies and bank accounts, to benefit himself and others linked to the discredited former President, José Eduardo dos Santos.
The formal complaint, citing instances of Paiva’s alleged money laundering and illegal diversion of public funds, was submitted by investigative journalist Rafael Marques and sociologist Tânia de Carvalho, to demand the Office of the Attorney-General launch a comprehensive investigation.
Previous allegations against Paiva have not been followed up in Angola. Alleged to have been one of the key facilitators of the wholesale looting of public money by the former Angolan regime, Paiva joined the state oil monopoly in 1976 and by 1987 was appointed to head Sonangol’s London operations. There he was well-placed to execute the instructions of the notorious Sonangol CEO, Manuel Vicente, whose links to former President and Kleptocrat-in-Chief José Eduardo dos Santos, are well documented.
Evidence from the Luanda Leaks reports in 2020 and information emerging from multiple international criminal investigations revealed that the Angolan elite around dos Santos formed a criminal cabal that systematically diverted billions of petrodollars into their pockets. They set up a huge network of shell companies in offshore tax havens and created their own private banking network to be able to move their wealth into regulated financial systems such as the USA and the EU. Paiva was named as one of these corrupt “Secret Bankers” in the OCCRP report that same year.
It’s unclear why the Angolan Justice system has failed to investigate beforehand how Paiva came to pocket many millions of US dollars from his positions at BAI and Sonangol. Sonangol was one of the principal investors in the BAI bank when it was launched in 1996, holding 18.5% of stock. In 2006, Paiva was appointed to the BAI board, and it soon became clear that the bank was being operated as a laundromat for the dos Santos family and their accomplices. Some of Sonangol’s initial stake would soon be transferred to others, including 5% to Paiva himself.
By 2010, when a US Senate Investigation into BAI’s activity in the United States reported numerous red flags suggesting maladministration and corruption at the BAI, Sonangol’s 18.5% of stock had mysteriously diminished by 10%, amid transfers of stock to shell companies whose beneficial owners turned out to be Paiva and fellow company directors, some (if not all) of whose names also feature in international corruption investigations.
As the complainants state in the denunciation sent to the Attorney-General “There were no financial movements consistent with or justifying the private purchase of BAI shares by Jose Carlos de Castro Paiva”. Some of Sonangol shares in BAI were routed and re-routed by Paiva or his associates through separate transfer operations to entities in which he is named as one of the beneficial owners, e.g., to the Bahamas-registered Arcinella Assets (Paiva 7%), the British Virgin Islands-registered Sforza Properties (Paiva 6.5%) and Mauritius/France-registered Dabas Management (Paiva 5%).
When these suspicious money movements triggered Anti-Money Laundering (AML) checks, put in place in countries like the USA to achieve compliance with legal requirements, the BAI consistently stalled, failing to supply the required information (sometimes for years) until it was forced to the reveal the names of the beneficial owners, including Paiva’s, all the while requesting secrecy.
After a seven-year corruption investigation, Brazil’s Federal Police reported in 2020 that Paiva and his associates had invested millions of dollars from Sonangol accounts into construction of the Mussulo tourist resort and the Solar Tambaú residential condominium in the coastal town of João Pessoa in Paraíba State. An initial US $5 million from Paiva and US $3 million from Theodore (Ted) Giletti (BAI Vice President) into Mussulo in 2009 via a Dominican Republic-registered company, Mobilware, was augmented in 2017 by some US $25 million again routed by indirect means to shield the identities of the beneficial owners (the money came from Leonard Cathan’s Geneva Wealth Capital Management in Switzerland and Giletti and the Mussulo offshore account in the British Virgin Islands).
Brazil said the ultimate destination was GBF Empreendimentos Imobiliários e de Turismo, a company owned by the Portuguese national João Carlos Guerra Alves Pina Ferreira, another Paiva associate. Pina Ferreira and Paiva are co-directors of the company JCP Construções e Incorporações. In all, the Brazilian police said there were 60 Angolans, including PEPs (Politically Exposed Persons) involved in the João Pessoa projects. No formal investigation was set in motion in Luanda, despite sharing the Brazilians sharing their information with the Angolan Attorney-General’s office.
To this day BAI continues to shield the identities of five of its eight main shareholders.
Over the past decade investigative journalist Rafael Marques de Morais’s Maka Angola website has consistently revealed allegations of corruption by Angolans and foreign nationals, naming officials, PEPs and private individuals, the shell companies and locations they used, and the investments they made – all with money that should have gone into the Angolan public purse. Revelations about the role played by Paiva that were already in the public domain, have consistently been republished by Maka Angola. But when his co-complainant Tânia de Carvalho, a sociologist and TV commentator, referred to Brazil’s case against Paiva in a broadcast, he went after her, complaining of defamation. Just one day after she put her signature alongside Marques in the criminal complaint to the Attorney-General, Tânia de Carvalho was due to appear in court to face that defamation charge. Notably, Paiva has never sued the original publications who reported allegations that he had diverted “millions and millions of Angolan money” to Swiss banks account (e.g., an account for MIDAS at Lombard, Odier, Darier and Hentsch, frozen on September 30th, 2004)
Angola’s first private bank was established on November 13, 1996, as the Banco Africano de Investimentos (BAI), later Banco Angolano de Investimentos (BAI), and commenced commercial operations on November 14, 1997. The founders of the bank included José Carlos de Castro Paiva, then managing director of Sonangol London Ltd.; and Theodore Jameson Giletti, the American-born and British-trainer former banker who became BAI Vice-President.
In 1998 the listed shareholders of BAI were reported as following: Sonangol, the Angolan-state owned oil company: 19%; Grupo Crédito Agricola, a Portuguese financial institution: 10%; Service Group Angola, an affiliate of a Portuguese car company: 8%; Investec Bank Ltd., a South African financial institution: 7.5%; Amercon, a U.S. corporation: 6%; Banco Pinto e Sotto Mayor, a Portuguese financial institution: 5%; Dabas Management Ltd., a French corporation, Brenco: 5%.
BAI’s initial president was Aguinaldo Jaime, who left the bank to become head of the Banco Nacional de Angola, BNA; two initial senior administrators were Joaquim Costa David, Angolan Minister of Finance, also a former head of Sonangol; and Ana Paula Gray, a banker with the South African Investec Bank, both of whom were made members of the board of directors. BAI’s chief executive officer was Jose de Lima Massano, a former Sonangol executive, accountant, and banker who is currently serving as the governor of Angolan Central Bank (Banco Nacional de Angola).
Perhaps the most notorious BAI director was Manuel Domingos Vicente, the former chief executive officer of Sonangol before being appointed by dos Santos as Angolan Vice-President. Vicente is one of dos Santos’s notorious “Triumvirate” – the former President’s three closest associates. The Senate Subcommittee’s investigation found that of the other (smaller) shareholders, Brenco International was beneficially owned by Pierre Falcone, a notorious Angolan arms dealer, and his business associate, Arkady Gaydamak, both involved in the arms and bribery scandal known as Angolagate. It also noted that Paiva had a majority ownership position thanks to his stake in the three SPVs (Special Purpose Vehicle companies) while simultaneously (at that time) holding positions as Chairman and managing director of Sonangol (London) Ltd and Chairman of the BAI bank. BAI’s explanation for this was that he was a placeholder for other, unnamed Angolans.
” BAI’s current Chairman Jose Paiva is the majority shareholder with 18.5% beneficial ownership through Arcinella Assets SA (7%), Sforza Properties (6.5%) and Dabas Management Limited (5.0%). Jose Paiva was elected as the beneficial owner of Arcinella and Sforza, both Special Purpose Vehicle (SPV) companies purely as a result of his role as Chairman. The shares are being held temporarily, in effect on a custodial basis by the Bank until final shareholder registration can be concluded. The shareholders are (and will be) individuals of Angolan nationality with the intention that no one individual will have a shareholding more than 1%.”
More than a year later, HSBC’s legal counsel told the Senate Subcommittee “upon information and belief that both SPVs continue to be held in trust by Paiva”. For more than one year, from March 2006 to June 2007, HSBC pressed BAI for ownership information that it routinely obtained from other foreign financial institutions and which the bank had determined was important due diligence information to understand its client’s operations. BAI provided some of the requested information but offered differing explanations for two shell companies holding 13.5% of its shares, finally claiming the shell companies were unable to identify their individual shareholders and assigning their shares “temporarily” to BAI’s chairman of the board (i.e., Paiva).