By Charles Mafa
Indian citizen, Vinod Sadhu, who has been on the Zambian police’s wanted list since 2018, was finally arrested when he entered the country in September in his private jet. However, the following day, a senior ruling party official and a presidential political advisor ordered the police to release him. The MakanDay Centre for Investigative Journalism’s attempts to get an explanation from government or presidential authorities have been unsuccessful. No official or politician seems to know anything about Sadhu’s arrest and release
This raises questions about what political influence Sadhu has. It also raises questions about President Hakainde Hichilema’s “new deal” promise to wage war against grand corruption and to bring the culture of high-level impunity to an abrupt end.
Sadhu wasthe first managing director appointed when Sun Pharmaceuticals Ltd was established in 1981. In 2001 the company won a long legal battle with the Development Bank of Zambia, which claimed it had not been repaid for a loan. Sun Pharmaceuticals was awarded damages to the tune of almost US$12.8-million when the Ndola High Court in Zambia found that Sun had indeed not only repaid a loan from the agency but it had overpaid. The loan was granted in 1981 by the Development Bank to the company’s previous incarnation, Frank and Hirsch, to establish a factory to manufacture disposable syringes in Lusaka, the capital.
It was after this ruling that the family of thefounding shareholder, the late Zambian businessman and politician John Kalenga, discovered that they no longer owned shares in Sun Pharmaceuticals. MakanDay can confirm that all shareholders in the company are members of the Sadhu family.
In 2018 the Kalenga family reported Sadhu, who had left the country, to the police. Despite criminal investigations being opened against him, the ministry of justice continued to pay money into a Swiss bank account under the Sun Pharmacueticals name. When President Hichilema came into office in 2021 with the promise of a “new deal” government, police sources told MakanDay that they believed that this would bring Sadhu to justice.
The allegation against Sadhu is that during the litigation process he fraudulently transferred shares in Sun Pharmaceuticals Limited to his name with the help of corrupt government officials in Zambia’s company registry. There is no documentation to show how these shares were transferred to Sadhu and the company record accessible on the show that all the three shareholders are Indian nationals. Sadhu is registered as director.
It is estimated that this share transfer allowed Sadhu to receive around K235-million from Sun Pharmaceuticals.
Over and above the K235-million, payment documents from the ministry of justice seen by MakanDay confirm that the government continues to pay funds into a Swiss bank account. Police sources have told MakanDay that they suspect Sadhu opened this account which the ministry continues to pay funds into. It has transferred a further K115-million into this account. This money is part of the 13-million Swiss Francs (US$12.8-million) that was awarded by the court in penalties to Sun Pharmaceuticals Ltd. Police sources told MakanDay that they believe Sadhu opened the Swiss bank account so that the ministry of justice could pay him the penalty money that should have been paid to Sun Pharmaceuticals.
These transfers are currently being contested by Kalenga’s family and are also under police investigation. Allegations against Sadhu include fraud against the company and its shareholders and externalising funds from the court settlement.
Allegations against him also include falsification of corporate records and receipts held at PACRA, wrongful personal seizure of Sun Pharmaceutical funds and the estate of its co-founder, Kalenga, who died in 1993.
Sadhu’s lawyers have not responded to MakanDay’s request for comment on the allegations, including questions about his arrest on 29 September when he visited Zambia with his son.
The ministry of justice told MakanDay that their hands are effectively tied and that the payments into the Swiss bank account cannot be stopped because the ministry was “sanctioned by the judgments of the courts in the matter of Sun Pharmaceuticals Limited v Development Bank of Zambia and the Attorney General 1995/HN/307/, 2007/HP/329 and SCZ/8/30/2004”.
“After the aforesaid judgments, the ministry has not received any other court order with the effect of reversing the judgments of the court,” said Solicitor General Marshal Muchende in a written response to MakanDay’s question as to why this money was still being paid into the account despite the investigation into Sadhu.
Muchende said “criminal investigations or proceedings do not absolve liability of the government under a judgment until and unless a judgment has been set aside”.
“It is important to note that the government does not pierce the corporate veil to know the directors behind a judgment creditor as a sine qua non (condition precedent) for compliance with the judgment,” he added.
He further defended the ministry of justice for making payments into the overseas bank account.
“The account into which funds are being paid holds the name of Sun Pharmaceuticals Limited and we have made similar foreign payments to other judgment creditors under the Compensation Fund,” said Muchende.
Sun Pharmaceuticals was registered as a private company, limited by shares, on 24 December 1964 under certificate number 2764, according to a June 2022 statement by PACRA to the police that MakanDay has seen.
The statement shows that Sun Pharmaceuticals, formerly known as Frank and Hirsch Limited, has gone through several changes relating to its directors and shareholders, including an increase in share capital.
The statement further shows that the current status of the company is that all shareholders are Indian citizens – including, Sadhu Indira, Sadhu Vodit and Sadhu Namisha. Vinod Sadhu is listed as the director, but without any shares.
Improper use of political influence by a private individual
A well-placed police source said that on 29 September, Sadhu, accompanied by his son Uddit Sadhu, arrived at Lusaka airport on a private jet and was arrested at the immigration headquarters after a tip-off and detained at the Chelston police station in the capital.
However, the police source said that the following day, a senior member of the ruling United Party for Development (UPND) and Hichilema’s political adviser, William Banda, ordered the police to release Sadhu and his son.
Banda is yet to respond to a set of questions from MakanDay, including whether he ordered the police to release the suspect and his son
Also left unexplained is why two of the three police officers who arrested Sadhu were detained, allegedly on Banda’s orders. The officers were later released.
In response to questions, Home Affairs and Internal Security Minister Jack Mwiimbu denied knowing Sadhu, saying he cannot have a relationship with someone (Sadhu) he has never met. The police fall under Mwiimbu’s ministry.
“Follow up the matter as a professional journalist,” he said, refusing to give further details on this issue.
It is not clear how Sadhu managed to establish such high-powered connections within the “new deal” government and ruling party so quickly. The mysterious circumstances at the Chelston police station hint at the improper use of political influence by a private individual.
Hichilema’s corruption ‘fight’
Hichilema promised to wage war against grand corruption and bring the culture of high-level impunity to an abrupt end after former President Edgar Lungu was pushed out of office a year ago.
Hichilema has also promised to close loopholes for corruption in the government, but it has become apparent that not all officials are buying into the clean-up campaign.
Asked whether the president is aware of his men interfering in police work, Hichilema’s spokesperson Anthony Bwalya, told MakanDay that “state house is not privy to the information you have shared”.
Unresolved questions for the new deal government
Questions also remain about how Sadhu and his family have managed to influence several Zambian government officials to continue receiving compensation payments while the matter is being investigated by police.
“Why can’t they [the government] stop making the payments until investigations are conducted on this issue? If no one is benefitting from this case, why have they continued paying out the money,” asked one of the sources familiar with the case.