Mozambique: Almost 1,000 complaints filed by bank customers in first half
LAM Mozambique Airlines sale of shares: It makes no sense for the CFM to buy a company it founded – lawyer
4:00 CAT | 10 Feb 2025
Image: Carta
The company Linhas Aéreas de Moçambique (LAM) was created by the Portuguese colonial government on 26 August, 1936, under the name of Direcção de Exploração de Transportes Aéreos (DETA), being an operating division of the Services of the Ports and Railways of Mozambique (CFM).
DETA was separated from CFM after Mozambique’s independence and LAM, a state-owned company under the supervision of the Ministry of Transport and Communications, was created on 14 May, 1980.
“Transferring LAM’s problems to other relatively stable companies may have been a suicidal decision that could mean that, instead of allocating their profits to the public treasury, HCB, CFM and EMOSE would channel them to LAM, to avoid its collapse, just as the state has currently done with the Xinavane and Mafambisse sugar mills, where, because it has shares, it is obliged to prevent the two sugar mills from going under,” argues the lawyer.
In addition to criticising the sale of LAM to the founding company and thus transferring the airline’s problems to other companies, Cumbane believes that US$130 million is not enough to buy eight aircraft in good condition.
“What type of aircraft will be acquired if, with USD$130 million, it is expected to acquire eight aircraft? Will they be eight new or old aircraft, the kind that, in the first week, will have to open a line for the acquisition of spare parts and a line for the first repairs?” asks the lawyer.
In Cumbane’s opinion, with the US$130 million expected to be raised in the operation, at best, it would only be possible to acquire three new aircraft of the Embraer E190 type or two Boeing 737-700 or 737-800.
“Otherwise, LAM will have to go to the market to buy or collect flying scrap from other airlines, like the used aircraft that we import every day from Japan or Singapore, some of which, just to be removed from the ships, need to be towed or pushed, needing a bit of everything to be able to get on the road,” warns the source.
The lawyer also believes that Daniel Chapo’s government did not have enough time to study the sale of LAM, as this is no ordinary case. In Cumbane’s opinion, if Mozambique is truly a normal state, where institutions function, the operation to approve the sale of 91% of LAM to EMOSE, HCB and CFM should be subject to prior inspection by the Administrative Tribunal and a forensic audit by the Attorney General’s Office.
“The country could be on the verge of yet another astronomical financial fraud. The suspicion grows if one takes into account the seven-day deadline that LAM gave interested parties to submit proposals for the acquisition of the aircraft that the company needs. Seven days for a tender to acquire aircraft? It seems like a very tight deadline for this type of deal,” argues the source, although he acknowledges that he is not an aviation expert.
Finally, the lawyer believes that, in order to acquire the aircraft desired by LAM, the new government of Daniel Chapo should be very cautious because the President of the Republic may be being pushed to delve into a problem meticulously set up by criminal syndicates targeted at LAM.
In this context, for lawyer Damião Cumbane, in the best case scenario, LAM should be returned to the CFM, as its company, at no cost, just as the Mozambican state did when it returned to the Catholic Church and other religious denominations the assets it had appropriated as part of the nationalizations.
“It would be up to CFM to know where and who it could count on to revitalise LAM, whether it would be HCB [Cahora Bassa Hydroelectric Plant], EMOSE [Mozambican Insurance Company] or any other interested institutions or companies, national or foreign, that, if they wished, could buy LAM shares from CFM, the owners and founders of LAM,” argues the lawyer.
Otherwise, Cumbane claims that LAM shares could be put on the market at the best prices and prevent CFM, EMOSE and HCB from being left with a problematic company. In fact, he recalled that LAM is not the only airline in crisis on the African continent.
READ: Mozambique: Sale of 91% of LAM ‘positive sign’ – business confederation
Source: Carta de Moçambique
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