Angola: Unitel Sale in Legal Limbo
The public sale of shares in Unitel, Angola’s largest telecommunications company, and the operator’s admission to trading on the country’s stock exchange mark an important stage in a privatisation programme that has so far offered investors few marquee assets. Unitel is a rare exception. On that basis alone, the transaction deserves support.
Yet the deal comes with a legal complication that should not be relegated to the small print. Half of Unitel was transferred to the state by presidential decree in 2022, and the former owners continue to challenge that decision in court. If they ultimately prevail, the consequences could extend beyond the state and raise questions about the title acquired by new private investors.
Unitel’s prospectus says the offering is intended to make shares available to Angolan and foreign investors, with a separate allocation for employees under the country’s privatisation law.
The offer covers 15 per cent of Unitel’s share capital: 13 per cent for the public and 2 per cent for employees. It runs until July 24.
Although the Angolan state owns 100 per cent of Unitel – 50 per cent through the state asset manager IGAPE and 50 per cent through the state oil company Sonangol – the sale concerns only part 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 ruled 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 companies 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 breach 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 blocking subsequent measures, including the privatisation now under way.
But the decision did not resolve the merits. The main lawsuits remain active, and further claims may be brought. The prospectus acknowledges that the absence of a final judgment creates legal uncertainty over ownership of the shares.
If the claims succeed, the state could be required to return the nationalised stakes, compensate the former owners or reconstruct complex corporate arrangements. Put plainly, part of the transaction could have to be unwound.
The decrees rested on broad public-interest arguments, but their central justification was legal proceedings against Ms dos Santos and General Dino. They said those proceedings were making it harder for Unitel to maintain commercial relationships at home and abroad, worsening its financial position.
In GENI’s case, the government also cited restrictions imposed on General Dino, its beneficial owner, including sanctions by the US Treasury’s Office of Foreign Assets Control.
This is where the legal weakness becomes most acute.
The public record suggests that the proceedings cited in the decrees either did not formally exist in the relevant form or had not advanced to the stage of charges. The known criminal case involving General Dino concerns CIF and has not resulted in a final judgment. The known court order committing Ms dos Santos to trial relates to Sonangol. Neither matter concerns Unitel.
It is unclear whether proceedings abroad remain active. Even if they do, their relevance as a basis for nationalising Unitel is difficult to establish.
At a minimum, such an exceptional measure should have rested on an effective conviction at first instance. The absence of formal charges, adverse judgments or proceedings demonstrating a concrete threat to the public interest casts doubt on the legal basis for nationalisation.
If the essential premise of the decrees – the existence of relevant and active judicial proceedings – was absent or insufficient, the nationalisation may lack an adequate legal basis. That could lead to its annulment and expose the state to claims for damages.
The warning on page 100 of the prospectus is therefore not boilerplate. It describes a live risk that prospective investors should take seriously.
A better approach would have been to enact a robust legal framework before the sale, backed by political consensus between the ruling MPLA and opposition UNITA. Such legislation could have protected new private shareholders against later legislative changes, state intervention or future court judgments.
Without that preparation, the privatisation is both legally fragile and politically contingent. A future president – even one from the MPLA – could revisit a nationalisation carried out by decree, while a future court ruling could reverse the process.
The episode exposes a broader weakness in Angolan governance. The presidency may appear all-powerful, yet state institutions do not always move in concert.
The attorney-general’s office failed to keep pace with the economic and political timetable of nationalisation and privatisation. The result is a significant legal risk in one of Angola’s most important asset sales.