Former Angolan Billionaire Isabel Dos Santos Is Liable For $340 Million Payment After…

Last week —four days after Forbes announced it was dropping Isabel dos Santos, once Africa’s richest woman, from our list of billionaires—a French court dealt another blow to the daughter of Angola’s former president.

On January 26 the Paris Court of Appeals dismissed an appeal by Dos Santos to annul a 2019 ruling against her in a dispute brought by Portuguese entity PT Ventures over unpaid dividends and other breaches of the shareholders’ agreement at Unitel S.A., Angola’s largest telecom company. What that means: She is on the hook to pay PT Ventures about $340 million.

The news follows a string of decisions against her. Over the past year, many of Dos Santos’ assets have been frozen by courts in Angola, Portugal and the Netherlands. This latest ruling may mean she’ll have to part with one of her (currently frozen) assets to pay the money that’s owed.

“She is going downhill,” says a source familiar with the case in the Paris court.  

A spokesman for Dos Santos had no comment.

The history of the dispute with PT Ventures is a messy one. As Forbes spelled out in a 2013 article, back in 1999—while Angola was in the final years of a 27-year civil war (a formal ceasefire was issued in 2002)—Isabel’s father Jose Eduardo dos Santos, then Angola’s president, declared that the government could issue a mobile telephony license without a public bidding process. The next year a company called Unitel was granted the right to be the first mobile phone network operator in the country. It had four shareholders (each with 25% stakes): Geni S.A., majority owned by military general Leopoldino do Nascimento; Sonangol, Angola’s state oil company; Isabel dos Santos (then age 27) via a British Virgin Islands-registered entity called Vidatel Ltd.; and Portuguese telecom firm PT Ventures, which paid $12.6 million for its stake in 2001. Says one observer of the shareholder makeup: “It was 25% European technical know-how and 75% Angolan power structure.” 

Unitel was suddenly a hot property in a country where landline penetration was sparse. Business boomed. By 2012, it had amassed 9 million subscribers and had revenues of $2 billion, making it the country’s largest private company. Not only was Unitel generating hundreds of millions of dollars in dividends for its shareholders, but it also had helped build an image as a successful businesswoman for Isabel dos Santos, who had become chairman of Unitel’s board.

By 2014, problems inside Unitel came to a head. The Angolan shareholders had frozen out PT Ventures, preventing its representative from attending board meetings; they also stopped paying dividends to PT Ventures. One source familiar with the dispute describes the heart of the issue as pure greed: “All those profits were sitting there going to the foreign shareholder, but [the Angolans] didn’t want to share them.”

In October 2015 PT Ventures — then owned by Brazilian telecom firm Oi — brought an arbitration against the three other shareholders of Unitel, claiming breaches of the shareholders’ agreement. More than three years later, in March 2019, the International Chamber of Commerce ruled in PT Ventures’ favor, issuing an award of more than $650 million. About $307 million of that was unpaid dividends, while roughly $340 million was damages resulting from the value of PT Ventures’ shares in Unitel plummeting due to the shareholder breaches, according to a separate but related court filing. 

The political landscape in Angola has changed dramatically since PT Ventures first filed its arbitration in 2015. After 38 years in power, Jose Eduardo dos Santos stepped down as the country’s president in 2017. Vowing to attack corruption, João Lourenço took office as Angola’s new president in September 2017. Then the Dos Santos family’s star began to dim. Within less than two months, Lourenco fired Isabel dos Santos as head of state oil firm Sonangol. In January 2020, his attorney general charged Isabel dos Santos, her husband Sindika Dokolo and a business associate with embezzlement and money laundering and with causing the state to lose $1.1 billion. (She denied the charges at the time.) Dos Santos resigned from the board of Unitel in August 2020; her husband Dokolo died reportedly in a diving accident in Dubai in October 2020. 

In response to the 2019 decision in favor of PT Ventures, Dos Santos’ company Vidatel applied to the Paris Court of Appeals to annul the award. But on January 26, 2021, the court upheld the ICC’s 2019 award. Technically all three of the Unitel shareholders found to be in breach of the agreement are liable for the award, due to “joint and several liability”—a legal term that means any one of the defending parties is liable for the whole award. (To keep things interesting, Sonangol bought PT Ventures for $1 billion in January 2020.) A source familiar with PT Ventures says it’s likely that the entity will target Vidatel/Dos Santos to obtain what it’s owed. White & Case, which represented PT Ventures, said it had no comment. Quinn Emmanuel Urquhart & Sullivan, which represented Isabel dos Santos, did not respond to a request for comment.   

Fortunately for Dos Santos, it won’t be a $650 million bill. Most of the $307 million in back dividends has been paid to PT Ventures since the March 2019 ruling, says a source familiar with PT Ventures. But that does leave about $340 million in damages still to be paid.

The most likely scenario is for PT Ventures to take ownership of Vidatel, the vehicle through which she owns her Unitel stake. Back in 2015, PT Ventures sued Vidatel in the British Virgin Islands for the same reasons it launched the arbitration. The court in the BVI then froze the Vidatel assets; in December, the Supreme Court of the British Virgin Islands reportedly issued a decision that caused Dos Santos to lose control of Vidatel, preventing her from having a right to a shareholder’s vote or to receive dividends. That could make it easier for PT Ventures to take over the asset, which is likely worth about $300 million, says a source familiar with PT Ventures. (Because Unitel is an Angolan company, dos Santos’ stake in Unitel was also frozen by the Angolan court in December 2019, when it froze her other assets in the country.)

There’s also the separate legal matter in the U.K, where Unitel sued Dos Santos late last year, claiming her Dutch company, Unitel International Holdings BV (an entity not related to Unitel S.A. despite the similar name), had defaulted in 2019 on multiple loans issued by Unitel beginning in 2012. The company is seeking repayment of $430 million. 

“For Isabel, it’s been like a downward spiral,” says one source familiar with the PT Ventures dispute. “She was the queen of Unitel for many years.” One thing’s for certain: No one would call her that now.