The National Bank of Angola (BNA) has renewed its investment in a fund managed by Gemcorp for another six years, despite having previously labeled the deal as lacking transparency due to the negative impact it had on the bank’s accounts. The British-based firm with Russian ties had refused to disclose where it had invested Angolan funds.
This move maintains BNA’s relationship with what was once its largest creditor and remains the manager of its largest portfolio of foreign assets. The investment in the “Gemcorp Fund 1 Limited” was first made in 2017, during Valter Filipe’s term as governor, and is now valued at 597.2 billion kwanzas—an increase of 21% from 2023.
According to BNA’s annual report released this week, “in 2024 a new contract was signed with the Gemcorp Fund 1 Limited to extend the previous agreement by another six years, until September 2030, with all other terms unchanged.” The reason given was to “maximize returns on the investment,” implying that the BNA now knows the nature of the assets in which Gemcorp has invested. That hasn’t always been the case.
The relationship between BNA and Gemcorp has long been criticized for its lack of transparency. The Financial Times reported that Gemcorp was initially backed by capital from individuals close to Russian President Vladimir Putin. In Angola, Gemcorp has had its hands in several sectors, including the management of the future Cabinda Refinery, a diamond mine, hydroelectric project financing lines, and the rehabilitation of Angola Telecom’s transmission network. It was also involved in creating the Strategic Food Reserve and helped secure financing for projects such as the Laúca dam, where $400 million was arranged, but only $300 million reached Brazilian contractor Odebrecht—the remaining $100 million stayed with Gemcorp, according to a 2019 Expansão report.
To illustrate the opacity: in 2020, BNA’s profits dropped 79%, partly due to having to remove the $300 million investment from its balance sheet because the fund refused to disclose where the money was invested. International accounting standards required the bank to record the value as zero. This wasn’t for lack of trying—BNA’s Reserve Department director Avelino dos Santos confirmed the central bank had made multiple requests.
In the same year, Gemcorp unilaterally extended the fund’s maturity from 2022 to 2024, surprising the BNA. In 2019, auditor KPMG asked BNA to provide details on the fund’s underlying assets. The central bank failed to do so, leaving the auditor unable to verify a reported 75% valuation increase over 2018—a figure international consultants considered unrealistically high for a single year.
There were also concerns that BNA could be violating the law, since it is only permitted to invest in “foreign or international institutions with monetary and foreign exchange responsibilities,” according to Article 39 of the International Monetary Relations Law.
When questioned by Expansão in 2021, following the release of BNA’s 2020 accounts, Gemcorp’s legal director Cicely Leemhuis stated the firm is “governed by strict confidentiality obligations and privacy laws and therefore does not disclose to the press the identity of its investors, its portfolio composition, or business activities.” However, she did not explain why Gemcorp had withheld such information from its own client, the BNA.
Source: Expansão
