In a legal battle playing itself out across three continents, a disgruntled foreign investor has obtained an order to freeze the assets of Swaziland’s King Mswati III, including a private jet and its engines, in South Africa and England.

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In a mining deal gone sour, the unhappy investor has also subsequently approached the court in the British Virgin Islands to recover $1.5 million from the king.

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The bone of contention, alleges the investor, is that Mswati subjected him and his companies to illegitimate pressure amounting to economic duress through a number of unjustified and unfair payments, to which |he had no choice but to comply.

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He claims Mswati threatened to shut down his mine if he failed to make the payments, and that in the process the monarch was unjustly enriched.

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“It would be unjust for King Mswati to retain the benefit of those monies without making restitution,” the foreign investor said in court papers which African Independent has seen.

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However, the king’s office has described the protracted legal action as nothing but an attempt to scandalise the monarch and the country.

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Following the disagreement, the mine collapsed, resulting in the loss of over 700 jobs and leaving various creditors unpaid.

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A controversial decision to ban all court action against Mswati – in his private or public capacity – was issued by his then catspaw, the sacked Chief Justice Michael Ramodibedi.

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Observers say this opened the route for aggrieved parties to turn to international courts, where Mswati’s blanket immunity does not hold, for legal recourse and restitution.

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The $1.5m the investor claims in papers before the Eastern Caribbean Supreme Court in the British Virgin Islands, is in respect of advances made to the king from the mining company in Swaziland, to buy artwork in |New York.

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Singaporean businessman Shanmuga Rethenam, known in Swazi circles as “Mr Shan”, stated in his affidavit he was the sole director and shareholder of SG Air Leasing Limited (SG Air) and SG Commodities Trading Limited (SG Commodities) both incorporated in the British Virgin Islands.

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Mswati is cited as the sole director and shareholder of Inchatsavane Company (Proprietary) Limited, incorporated in Swaziland in 2010, and also in his personal capacity as head and sole beneficiary of the company.

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African Independent is in possession of |an elaborate file of affidavits and documents relating to the matters, including the court order to freeze Mswati’s assets and applications to personally sue him for amounts owed to Rethenam and his companies.

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In 2011 Rethenam received a seven-year mining lease for one of his companies, SG Iron, which had been known as Salgaocar Swaziland, to mine iron ore dumps which were left from a previous mining operation 40 years ago. The breakdown of the mining deal was as follows:

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  • 25 percent of shares issued to Mswati, purportedly in trust for the Swazi nation.
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  • 25 percent of shares issued to the Swaziland government for no payment.
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  • 50 percent of shares issued to Salgaocar.
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Rethenam said his companies provided more than $50m in respect of all the capital, and all the expertise to operate the mine.

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He stated in his statement of claim that Inchatsavane’s sole asset is a McDonnell Douglas Model DC – 9-87 aircraft bearing serial number 53041, installed with two Pratt and Whitney JT8D-217 C turbine engines bearing serial numbers 728022 and 726999, respectively. “The aircraft is currently registered in Swaziland with registration number 3 DC-SWZ and is used as King Mswati III’s private jet (as distinct from being a state-owned aircraft).”

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Rethenam said on May 12, 2010 the aircraft was taken to Canada for interior modifications by Goderich Aircraft Inc (GAI). Mswati felt the aircraft was not suitable as it had only one toilet.

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The matter was first heard in a Canadian court where Rethenam had initially sought an order for the aircraft to be held until he was paid $6.4m he allegedly paid for the modifications. He had also asked that the engines and a $3.5m paid by Mswati as guarantee for the jet’s release to be frozen.

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When the process in Canada failed, he approached the courts in the British Virgin Islands where he obtained the court order to freeze monies paid as guarantee, the aircraft and engines which he believes have been moved to South Africa or the UK – and risk being transferred to a third party over whom the court may not have power or jurisdiction.

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In his particulars of claim Rethenam lists the following amounts:

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  • Payments to GAI of $3,3m.
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  • Payments to other recipients of $1 145 959.82.
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  • Particulars of further payments to other recipients of $225 489 to be supplied in evidence.
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He explained that these payments were monies paid by SG Air for the use of Inchatsavane.

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Rethenam said in court papers that while the aircraft was being refurbished in Canada, he made several arrangements to hire other aircraft for use by the king. “Between about April and May, 2011 SGA leased a CRJ-200 VIP jet from Emerald Jets SAL and made it available for Mswati’s use. Between May and October, 2011 SG Air leased a Legacy 600 Jet from Prestige Jet Rental LLC and made it available for HMK’s use. SG Air paid about |$415 000 to Emerald, about $45 000 in legal fees in connection with the provision of the CRJ 200 VIP jet to Mswati and about $1 425 000 to Prestige in connection with the provision of the Legacy Jet to Mswati,” Rethenam said.

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Details of the $1.5m lawsuit against Mswati could provide a rare window regarding Mswati’s dealings with foreign investors. It has been alleged that some time in April he requested, through one of his emissaries, that SG Iron pay him an advance dividend of $10m.

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It is reflected in The Swazi Media Commentary that the company directors were given no choice and so on April 16, 2012 resolved to agree to Mswati’s request and make the payment of $10m. Mswati’s alleged desire to avoid repaying this loan is said to have led to the subsequent collapse of operations at the Ngwenya mine.

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Meanwhile, in the court papers in possession of African Independent, Rethenam wrote: “In or about late October or early November 2013, SA Commodities and King Mswati III entered into an oral agreement.

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“The terms of agreement included that the company would lend King Mswati III US$1.5m and that he would repay the capital sum using monies anticipated by him from the mine as dividends.

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“The terms included that the mine would pay King Mswati US$0.50 per metric ton of iron ore from the Ngwenya Mine exported from Swaziland.”

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The Swazi Observer quoted the king’s office describing Rethenam’s legal action as a ploy to frustrate the kingdom and its authorities, not necessarily because he was certain of victory, “but because he has monies to waste and cause the country to continue in unnecessary legal expenses”. – Africa Independent

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