Mswati III is a rand bil­lion­aire. When his jet was seized for mil­lions in debt, it opened a win­dow into how he makes so much money

CityPress - - Front Page - SU­SAN COM­RIE in­ves­ti­ga­tions@city­

As soon as King Mswati III saw his royal jet, “a broad, end­less smile” spread across his face.

This was the ac­count pro­vided – by Swazi­land’s Ob­server news­pa­per – of the mo­ment, last month, when the King’s McDon­nell Dou­glas MD87 fi­nally touched down at Mat­sapha In­ter­na­tional Air­port in Swazi­land af­ter be­ing out of the king’s reach for more than four months.

The luxury plane had been seized by a sher­iff in Canada in Jan­uary af­ter a court ap­pli­ca­tion brought by a Malaysian busi­ness­man who claimed that the king had failed to pay him a long-out­stand­ing debt of $3.5 mil­lion (R44 mil­lion at the cur­rent ex­change rate) for luxury up­grades to the jet.

It took a del­e­ga­tion of diplo­mats and lawyers to ne­go­ti­ate the plane’s re­lease, and last month a Canadian court ruled the king could have his plane back if the gov­ern­ment of Swazi­land coughed up $3.5 mil­lion in surety. On Fri­day, they will be back in the Canadian court to fight the case. Un­til re­cently, 39-year-old Malaysian busi­ness­man Shan­muga “Shan” Rethenam con­sid­ered him­self the king’s per­sonal friend. But his for­tunes have changed dramatically. Where once he en­joyed po­lice es­corts in Swazi­land, he is now ter­ri­fied to re­turn to the king­dom af­ter he was threat­ened with ex­tra­di­tion and ar­rest for al­legedly mis­man­ag­ing a once-lu­cra­tive iron ore mine in the coun­try.

The fall­out has pro­vided a rare glimpse into Mswati’s se­cre­tive busi­ness deal­ings – a world of ques­tion­able deals, bro­ken prom­ises, luxury gifts, bribery and be­trayal.


Mswati’s MD87 started its ca­reer in 1991 with a Ja­panese air­line. By the time Mswati re­ceived it in April 2012, it had un­der­gone a makeover. The econ­omy class seats were ripped out and re­placed with wood pan­elling, a dou­ble bed and plush seats. The price tag: roughly $20 mil­lion. When Swazi Prime Min­is­ter Sibu­siso Dlamini an­nounced in 2012 the king had re­ceived a new plane, ques­tions (and eye­brows) were raised about who had footed the bill. At the time, all the gov­ern­ment would say was that it had been “a gift … from devel­op­ment part­ners and friends”.

What has emerged in court pa­pers and leaked doc­u­ments is that Rethenam sold the plane to the king in 2010 for $11.45 mil­lion. The first $10 mil­lion was paid by a for­eign gov­ern­ment, which emails sug­gest was Kuwait, and an­other $4.5 mil­lion was paid by the king’s com­pany, In­chat­sa­vane, of which he is the sole share­holder. When he re­ceived it, the plane was a gut­ted shell and $6 mil­lion was needed to kit it out.

A “mis­un­der­stand­ing” with the “other gov­ern­ment” re­sulted, Rethenam said, in a fund­ing short­fall. “The king called me and said: ‘Shan, we have a sit­u­a­tion here, how do we solve it?’”

Rethenam struck a lease and buy-back agree­ment with an in­vest­ment com­pany to put up $7.5 mil­lion to deck out the plane. In the in­terim, Rethenam loaned the king a 16-seater jet, although he claims he had to re­place it with a larger one when the king com­plained that, with only one bath­room, it was in­con­ve­nient.

At the time, Rethenam wanted a li­cence for a lu­cra­tive iron ore mine 20km out­side the Swazi cap­i­tal, Mba­bane. Ng­wenya Mine was pre­vi­ously op­er­ated by An­glo Amer­i­can but closed down in the 1970s. By 2011, new re­cov­ery tech­nolo­gies and strong iron ore prices of more than $170 per ton made it a valu­able as­set. By June, Rethenam was granted a seven-year li­cence to start re­pro­cess­ing old mine dumps. His com­pany took a 50% stake in the new ven­ture, Salgaocar Swazi­land; 25% was given to the gov­ern­ment of Swazi­land; and 25% was given to the king “in trust for the Swazi na­tion”.

It is not un­usual for the king to be cut in on deals. In 2012, Forbes es­ti­mated his per­sonal wealth was in ex­cess of $100 mil­lion.

Asked if the king’s stake had been a bribe, Rethenam told City Press this week: “If you give some­body in power or po­si­tion money, it’s called bribery. But this is a head of state, and it’s com­mon for the king to be part of a deal.

“Look, this is the cus­tom in Swazi­land; this is how things are done, un­for­tu­nately. So I don’t know. Some peo­ple might call it a bribe, but for me it was not a bribe.”

Mean­while, the king’s un­fin­ished MD87 was still in Canada. Court pa­pers show the com­pany hired to re­fur­bish it ran into fi­nan­cial trou­ble and asked for more money. The king once again asked him for help, Rethenam claims.

“I re­mem­ber the king said: ‘I don’t have money.’ And this is where a lot of peo­ple don’t un­der­stand; you go to the king and there’s noth­ing writ­ten ... it’s not like you are mak­ing a con­tract,” he said.

“So I said to the king: ‘Your Majesty, I will fund [the plane] … How­ever, I’m putting up this money and I need this money to be paid back.’ So the king said: ‘Shan, no prob­lem, when the plane is de­liv­ered, I will pay your money.’”

Rethenam paid for the plane’s com­ple­tion, and this is the $3.5 mil­lion debt he is now try­ing to claim through Canadian courts.

By April 2012, the plane was ready to be de­liv­ered. But to buy the plane back from the in­vest­ment com­pany, Mswati needed $9.5 mil­lion.

“The king came to me, say­ing ‘Shan, I need money again’,” Rethenam said. “I said: ‘Your Majesty, what do you mean? You had all the time and I’m al­ready pay­ing for the over­run … What do you want me to do?’

“He said: ‘Yeah, but I need to pay for the air­craft.’”

The so­lu­tion they came up with was that the new iron ore mine would grant the king a $10 mil­lion loan, off­set against fu­ture div­i­dends.

“If I did not come and res­cue this, [the king] would have been in much big­ger trou­ble,” said Rethenam. “The guys who had fi­nanced the plane would have seized this plane, and ... sold it.”

On April 19 2012, the king’s 44th birth­day, his com­pany, In­chat­sa­vane, be­came the reg­is­tered owner of the plane. “It was de­liv­ered to the king and he was very happy about it and, in fact, the re­la­tion­ship strength­ened a lot,” said Rethenam. “The day I de­liv­ered the plane ... he asked me to marry one of his daugh­ters.” Rethenam said he de­clined the of­fer be­cause he was al­ready en­gaged.

At that stage, Rethenam didn’t push the king to re­pay the $3.5 mil­lion spent on re­fur­bish­ments. “There was a com­modi­ties boom, I was do­ing ex­tremely well,” he says. “$3.5 mil­lion was peanuts to me … I used to fly in my own pri­vate jet; I used to have two of my own planes.” But as iron ore prices fell, so did Rethenam’s for­tunes.


When the $10 mil­lion loan was given to the king in April 2012, iron ore was sell­ing at $147 per ton. By May 2013, it had dropped to $124. By May 2014, it was $100. On April 2 this year, prices hit a record low of $47 per ton.

De­spite this, Ng­wenya Mine con­tin­ued to pro­duce, and in 2012/13 ex­ported iron ore worth $94 mil­lion. Min­ers were paid the min­i­mum wage.

“The work­ing con­di­tions were hor­ri­ble,” said Won­der Mkhonza, sec­re­tary-gen­eral of the Amal­ga­mated Trade Union of Swazi­land. “A per­son will get sick and he will go to the Mba­bane gov­ern­ment hos­pi­tal, but the hos­pi­tal was in­structed not to book peo­ple off – even in­jured peo­ple were told to go to work.”

Mkhonza said that when work­ers tried to join the union they were dis­missed.

“The mine was viewed as a di­rect busi­ness for the king,” he said. “Even the depart­ment of labour did not want to touch the mine. It was a sa­cred cow.”

Rethenam de­nies this, say­ing they were em­ployed through a labour-broking com­pany: “I gave all the work­ers the best I could. I paid bonuses and gave good food, like KFC and Nando’s, when­ever I was there.”

What hap­pened next could be­come the sub­ject of in­ter­na­tional ar­bi­tra­tion be­fore the World Bank’s In­ter­na­tional Cen­tre for Set­tle­ment of In­vest­ment Dis­putes (Icsid).

Gov­ern­ment’s ver­sion of events is that, as iron ore prices dropped, con­trac­tors went un­paid, and the Port of Maputo seized 50 000 tons of ore for un­paid debts. Rethenam was asked to in­ject cash into the mine, but re­fused. The mine had to be liq­ui­dated. Late last year, Ng­wenya Mine closed and 400 Swazi min­ers lost their jobs.

But in a no­tice of dis­pute filed with the Icsid in Jan­uary, Rethenam’s com­pany ac­cused the gov­ern­ment of Swazi­land of en­gi­neer­ing an “ar­ti­fi­cial cash cri­sis” to en­able the king to seize the mine and avoid re­pay­ing the loan.

Rethenam claims that, in Au­gust 2014, the king’s pri­vate sec­re­tary halted all ex­ports of iron ore, order­ing that it be stock­piled in­stead.

With no money com­ing in or ore go­ing out, he asked the king to re­pay the loan, but he re­fused, and the com­pany in­evitably col­lapsed.

“The mine is no longer func­tion­ing; all work­ers were sent home,” said Mkhonza. “The price of the iron ore – yes – that was the of­fi­cial po­si­tion. Per­son­ally, I think the de­ci­sion was taken to close the mine be­cause of the re­la­tion­ship that soured.”

Rethenam now wants the king­dom to pay him $141 mil­lion (R1.75 bil­lion) in com­pen­sa­tion for the loss of the mine.

In a let­ter to Dlamini in Jan­uary 2015, Rethenam said: “I am ex­tremely shocked and heart­bro­ken with the change in cir­cum­stances, and can­not come to terms with the man­ner in which events are un­fold­ing … Is this how one is to be treated af­ter all I have done?” This in­cludes ne­go­ti­at­ing “a crude oil trans­ac­tion with Equa­to­rial Guinea”, “pro­vid­ing loans/ad­vances to His Majesty the King to pur­chase luxury goods from over­seas”, in­clud­ing $1.5 mil­lion for art bought in New York and “pay­ing the en­tire ex­penses for Her Majesty [the] Queen Mother’s med­i­cal treat­ment in Sin­ga­pore”, to­talling al­most $400 000. “I have at all times tried to save us all from the dis­com­fort and em­bar­rass­ment that arises from lit­i­ga­tion, and public dis­clo­sure of in­for­ma­tion,” he wrote.

He added: “Dis­clo­sure of past events will paint a very neg­a­tive im­age of the coun­try to po­ten­tial in­vestors, but at this point it ap­pears that I have no other al­ter­na­tives.”

Rethenam in­structed his lawyers to ap­proach the Canadian courts to seize the plane be­cause he “wanted the king to fo­cus his at­ten­tion on me”.

In an af­fi­davit be­fore court, the king’s pri­vate sec­re­tary and royal es­tate manager, Sihle Dlamini, de­nied that the king or his com­pany was re­spon­si­ble for the debt, say­ing they had never agreed to re­pay the costs and that Rethenam’s claim had been filed too late.

Rethenam still holds out hope that the king will al­low him to re­turn to Swazi­land to re­open the mine.

“This time, if I go in, I’ll put in many con­di­tions … This time, even if I go in, I’m go­ing to stay far away from the king.”

City Press put de­tailed ques­tions to both the gov­ern­ment of Swazi­land’s spokesper­son and the king’s pri­vate sec­re­tary.

Spokesper­son Percy Sime­lane said: “The mat­ter is still pending be­fore a court of law in Canada. It is sub ju­dice and we would be in contempt if we re­sponded to your ques­tions since they re­quire that we bring up the mer­its of the case.”




HEAD IN THE CLOUDS Mswati III’s pri­vate jet



CLOUD NINE A luxury bed on the king’s pri­vate jet, which had to be re­fur­bished in 2012

AIR­BORNE THRONE Fit for a king ... a toi­let on King Mswati III’s pri­vate plane

LEATHER LOUNGE First-class seat­ing was in­stalled on the pri­vate plane

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