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Isabel dos Santos went to court to try to stop the nationalization of Efacec. The company owned by the businesswoman advanced to the Supreme Administrative Court to try to recover the 71% it had in the Portuguese company.
“The Winterfell company, in the field of exercising its rights, informs that as a result of the publication in the Diário da República of July 2, 2020 of Decree Law No. 33-A / 2020, within the competent legal term and in the quality on expropriation, filed on September 25 before the Supreme Administrative Court an action challenging the administrative act and the government’s decision to nationalize its shares in EFACEC, ”according to a statement from the press office of the Angolan businesswoman.
Among her arguments presented to the court, the businesswoman affirms that “only Winterfell’s shares (71.73% of the capital stock) were nationalized and not those of the rest of the shareholders. In other words, Efacec was not really nationalized, contrary to what was publicly announced ”.
Then, the “act of nationalization assumed a merely temporary character, since in this case the nationalized shares (71.73% of the capital stock) will be immediately resold to individuals. Comparatively, the rest (28.27%) remains owned by the rest of the current shareholders, without changes ”.
Winterfell also denounces the “absence of a prior hearing” before the nationalization and “contrary to the remaining shareholders who were heard by the Government, which constitutes discrimination and violation of the principle of equality of the right of establishment and of the right to move capital ( 49 and 65 TEU) “.
The Angolan businesswoman became the majority shareholder of Efacec in October 2015 when she paid 200 million euros, through the company Winterfell Industries, to start controlling the company. The previous shareholders, the José de Mello and Têxtil Manuel Gonçalves (TMG) groups, became minority shareholders.
Winterfell stressed that the “challenge action does not harm or disturb the normal functioning of Efacec, which will be able to operate normally and will remain completely outside of this action, and will continue until the final judgment of the judgment, in the hands of the State.”
In 2018, the company generated revenues of 433 million euros (432 million in 2017, with orders of the order of 533 million (compared to 497 the previous year), and an investment of 21 million. Profit before interest, taxes, Amortization and amortization (EBITDA) reached 41.2 million, a notable growth compared to the nine million registered in 2017.
Among the 10 arguments invoked by the businesswoman before the court, there is also “Lack of reasoning for the nationalization act, since there was no materialization of facts that demonstrated the verification of the public interest in the nationalization.”
And he continues: “Evocation of false assumptions, since Winterfell was not notified of the foreclosure decree on his shares or on his bank accounts.”
Isabel dos Santos also criticizes the “absence of a prior hearing by the holders of the pledge rights on the nationalized shares, which in fact the nationalizing law does not identify, and which has a patrimonial impact on Winterfell, seriously affecting the duration of the bank loan contracts ”.
At the same time, the businesswoman criticizes the “violation of the legal nationalization regime that provides for the transfer of nationalized shareholdings to the state level, when, however, their immediate sale in the market was immediately announced, the State lending itself to the role” . surrogacy in the economy and private property rights ”.
Another of the arguments invoked before the Supreme Administrative Court is the “lack of legislation that allows the Government to intervene in the management of private companies and in the respective shareholding structure, proceeding to ablative acts of property rights over the shares and their immediate transmission to other private entities ”.
The businesswoman considers that the “nationalization did not occur for exceptional and especially well-founded causes, nor did it occur to safeguard the public interest,” and that the “nationalizing act also violates the legal appropriation regime, since reprivatization is aimed at confiscating the actions of an individual and not for the essential purposes that are: modernize economic units and increase their competitiveness, as well as contribute to sectoral or business restructuring strategies; promote the reduction of the weight of the State in the economy; promote the reduction of the weight of the public debt in the economy ”.
Isabel dos Santos also points out that “the Memorandum of Understanding already signed between Winterfell and the financing banks, under the close supervision of the Government of Portugal, was completely ignored, and the process of selling Winterfell’s stake in Efacec, which was already underway, and in its final stage, having received at least 9 firm proposals from interested entities on June 29, 2020 ”.
“Winterfell hopes and hopes that the Supreme Administrative Court and others can come to appreciate this challenge and its merits, in the name of fair justice,” concluded the company held by the businesswoman.
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