It’s just not cricket!
Ex-England star is accused of building African business empire on bribes and dirty tricks, reports RUTH SUNDERLAND
Cricket fans of a certain age will forever associate Phil edmonds with those sun-dappled days in the Seventies and eighties.
But as a star spin bowler, edmonds was harbouring another obsession: becoming a business mogul.
in the middle of matches, he’d pore over a copy of the Financial times and was overheard by playing colleagues negotiating deals on the payphone in the dressing room, as mobile phones had not yet been invented.
But his tangled business affairs in Africa are a long way from the gentility of Lord’s cricket ground.
He and his long-term business partner, Zimbabwean-born Andrew Groves, 48, have been accused by campaign group Global Witness of carving out an African business empire and leaving some investors out of pocket.
edmonds was born in Lusaka, in what is now Zambia, in 1951 to a British businessman father and a Belgian mother. His real name, not much-used, is Philippe-Henri.
He moved to england in 1966 and attended fee-paying cranbrook School in kent, before studying land economy at cambridge University.
there, he met his future wife Frances, who achieved fame in her own right as an author and broadcaster. For a time, they were the golden couple of the game, though their volatile partnership ended in 2007 after more than 30 years of marriage.
the gilded days of celebrity are long gone, but edmonds’ business affairs are more than just fascinating footnote for cricket aficionados: the Global Witness report raises serious issues in the very heart of the Square Mile.
that’s because, although they operate thousands of miles away, edmonds’ and Groves’ companies are listed in the city, on the London Stock exchange’s lightly-regulated Alternative investment Market.
the pair fiercely deny allegations of wrongdoing and say the claims against them come from former business associates who have an axe to grind.
But some are being taken seriously enough that the president of Liberia, ellen Sirleaf, has ordered an investigation into accusations of bribery against one of their companies, Sable Mining.
it is said to have made corrupt payments to senior officials to win mining rights. Liberian officials deny pocketing any such payments.
SABLE is a British Virgin islands-registered firm, co-founded by edmonds, that floated on the AIM market in 2008.
A grand jury in Liberia in June indicted Groves in connection with the alleged bribery scandal.
His lawyers have asked the court to dismiss the indictment, which his spokesman said was politically motivated.
invoices seen by the Mail appear to show that the company was cultivating some well-placed friends.
in 2011, Heine van Niekerk, a senior mining executive working for Sable, took Fombah Sirleaf, the stepson of the Liberian president and the country’s chief of intelligence, on a hunting trip to South Africa, all-expenses paid.
expenses documents show the company paid for Fombah Sirleaf’s gear and for stuffing the four animals they shot, which included a gnu. there is no suggestion Fombah Sirleaf provided the company any favours.
Jim cochrane, the chairman of Sable, said any inappropriate actions by Sable in that country were carried out without the knowledge of the board.
He admitted there had been a lack of accounting controls – revealed by an audit in early 2011 – that had ‘exposed Sable to abuse by unreliable individuals’.
Ultimately, of course, company boards are responsible for making sure proper controls are in place and ensuring proper conduct by executives.
Global Witness also reports the testimony of a man said to be a former South African mercenary, who alleged he had been hired to ‘destroy’ van Niekerk.
instead, the mercenary claims he switched sides and warned his target instead.
‘Groves told us that he wanted to destroy Heine van Niekerk, as he had destroyed others,’ he said in an affidavit.
it is a tangled tale in which it is hard to discern the truth – but one thing is certain.
Shares in Sable, which five years ago were trading at around 20p, are now worth just 0.22p, equivalent to a fall of 98pc.
Another of edmonds and Groves’ ill-fated ventures that appears in the Global Witness report is African Medical investments (AMI).
the isle of Man-registered business floated in the city in June 2008, raising £5.1m from investors. the plan was to set up a network of private health clinics aimed at Africa’s emerging middle class.
three months after the London share listing, AMI bought a company called VIP Healthcare for £5m from a Zimbabwean medic called Dr Vivek Solanki, 53.
Dr Solanki told the Mail that he, along with edmonds and Groves, was involved in an ‘inside job’ on a deal to buy a plot of land in mid2009 in Maputo, the capital of Mozambique.
AMI bought the plot for $5.5m (£3.6m) to develop an exclusive clinic. But only a few months earlier the land had changed hands for just $2.2m (£1.4m). Whoever sold it, therefore, made a profit, at least on paper, of more than $3m (£2m).
the lucky seller turned out to be a company called EMP Services.
it was owned by a Bvi-registered company, Penrith Management trading that was linked to Dr Solanki and to trusts whose beneficiaries include relatives of edmonds and Groves.
‘i put in $200,000 into the original deal to buy the land,’ Solanki told me. ‘it was an inside job, i admit it. i was duped into it. i am a doctor, not a financier, but i realise that is not an excuse.’
edmonds and Groves said the trusts were for the benefit of family members that were not close enough relatives that they needed to be declared under AIM rules, which only cover the children and spouses of directors.
they also said the family trusts made no profit on the deal, because they only received cash equal to the amount they spent buying the land.
the balance was paid in shares, on which they have not realised any gains.
Of course, if the hospital project had proceeded as hoped, the trusts might have profited handsomely from a rise in the share price.
As it was, Dr Solanki left the company, having been suspended in July 2010 pending an investigation into alleged financial irregularities.
He says he quit the company after receiving a threatening phone call. ‘the person told me: ‘the last time this happened the guy ended up in a box in the congo.’
He also says there were veiled threats his family could be ‘raped by Angolans’.
Shareholders back in the Uk might well be frustrated and angry to hear these unedifying accusations flung around from all sides.
Wherever the truth lies, one hard fact is that African Medical investments ran up multimillion-pound losses until, in February 2014, its listing on AIM was quietly cancelled.
Setting up businesses in Africa is risky and difficult. Nonetheless, edmonds and Groves claim they can point to successes – such as CAMEC, founded in 2001 with £600,000 of capital.
it was sold to kazakh mining group ENRC in 2009 for $1bn (currently around £670m). ENRC itself left the Uk stock market in 2013 after an investigation by the Serious Fraud Office and a series of boardroom disputes.
edmonds says he put £2.5m of his proceeds from CAMEC into his charitable trust, whose projects include funding a school in Zambia. the pair also cite as a success their platinum venture Afplats. it was listed on AIM in 2002 raising £525,000 and sold to impala Platinum five years later for $580m.
the duo are, however, better remembered for White Nile, an oil exploration company floated in 2005, whose shares soared to 138p before crashing to just 3p.
in late 2008 White Nile switched from the oil business to agriculture and renamed itself Agriterra.
Shares in Agriterra have fallen from a high of 5.4p in 2012 to 0.23p. edmonds, citing a health scare, stepped down as chairman of Sable in 2014 and gave up his role as chairman of Agriterra in April this year.
He and Groves correctly point out that building businesses in Africa is ‘only for the very brave’.
they have contended with factors such as the fall in the price of iron ore, the ebola outbreak and political instability.
One question for British investors, however, is whether standards on the AIM market are rigorous enough for firms operating in distant parts of the world.
Global Witness says not: ‘it is run like an old boys’ club.’
the London Stock exchange argues AIM is a highly successful growth market that has helped thousands of small and medium companies raise capital and create jobs. it says it has the power to investigate, sanction and suspend companies that break the rules.
Operating in Africa is a world away from the polished mahogany boardroom tables of the city: Mozambique and Maputo are not Mayfair.
Nevertheless, investors are entitled to expect the rules of the Square Mile, not the law of the jungle.