What is it really like to be an African Entrepreneur? The day-to-day reality of running a business in Africa.
April 19, 2013
Yellow Journalism, African Style.. Part 2
July 16, 2010
Overcoming Corruption, Just this once... Maybe. Just Maybe.
The case reeked with corruption from day one. The judge in the original case even mentioned to us that “If I were a judge in a bigger city, you would need to pay $10,000 (equivalent) just to talk to me.” He added that if we heard that he had met privately with our opponents that we should know that he is open to meet with everyone (for those not used to corruption lingo that means “I am open to an offer from you if it is better than theirs.”) We were naïve and had not understood the message. In any case, he rendered judgment against us without any basis in law or fact. After the judgment, he suggested that we should find a suitable settlement amount. We chose to appeal.
To handle the appeal, we so distrusted the lawyers in that area of the country that we decided to retain a lawyer in Europe who was also a member of the local Bar Association. We were right to do so. While preparing the appeal, our lawyer discovered that our counsel in the lower court case had actually been the lawyer for the opposing side during the period the case had been hidden from us! This had never been disclosed by either the lawyer or the judge.
During the appeal, our European based lawyer just could not understand how the judge had rendered such an obviously incorrect judgment. To assist him, he had a local partner. But he did not have full confidence in his own partner. So at each hearing, he sent us the submissions and asked us to send a representative to the court…. Just in case.
For the final arguments, our European based lawyer flew in and very eloquently pleaded our case for over an hour. The opposing counsel never said a word. Strange. The case was sent for deliberation by the panel of three judges.
Then month after month, the decision was postponed. No reason, just postponed. This went on for 8 long months. We know that long delays in rendering decisions are usually a call for the highest bidder. We also know that our opponents were willing to be very generous with judges and were not overly bothered with pleading their case or submitting evidence. Our lawyer's intense pleadings had seemed quite out of place in en environment where law and facts are not usually part of the equation.
After some time, we stopped sending our own representative to the Court because it was a waste of time and travel expenses so we relied on our European counsel’s local partner. So when a hearing was scheduled yesterday to announce the decision, we did not send anyone.
For a reason that we will better understand one day, our European counsel’s local partner decided not to show up. We had no idea therefore, if a decision had been rendered, and if so, what it was. Worse, the local partner stated that he would be unavailable to check on the decision until next week. It is important to note that the local partner is based in the area where the court is located and he could have easily sent someone or called the court to get the information .Our European based lawyer also got worried. We were afraid that judgment had been rendered against us and that the local partner was colluding with the opposing side to give them time to execute the judgment. Paranoia.
So we decided to send someone to the court today. Unbelievably, the court clerk had decided not to come to work and our file was locked in her office. Reached by telephone, she said she was “tired.” Yes, judgment had been rendered yesterday, but she could not remember what it was (our case was the most important employment case in several years..but she did not pay attention as she was writing out the decision). She asked that we return on Monday.
In a normal environment, one would just go away and come back but it our own legal system, court clerks never miss work unless they are paid to do so by a party in court’ Usually, to allow them to either execute the judgment or to allow an application for a stay of execution. (I have learned a lot since 2006).
Thinking quickly on his feet, the person we sent to the Court explained to her colleagues that he would need to send for a bailiff to record that on a business day, he was unable to obtain information on a judgment from the Court of Appeals. He said that since he had been paid travel expenses, his bosses would never believe that no one could give him the information. Within 5 minutes, the Chief Registrar called the Court clerk and she showed up 30 minutes later.
Strangely (and happily of course), the judgment was in our favor. The judgment from the lower court was set aside. We don’t know what the games were about but we will surely discover eventually. One can become so paranoid that it really could be that the local lawyer was unavailable and the court clerk was too tired to come to work. I would like to say that our mind has become so twisted that we think everyone is corrupt and the whole legal system is set against us but somehow, something still seems fishy. Update coming…
March 25, 2010
Judicial Software
I have started to put together a team and we are in the early design stages. We are designing the application as a multi-stakeholder system with access for court clerks and other court staff, judges, judicial officials, lawyers and individual parties. Initially, we will limit the application to civil cases that fall under OHADA (an organization that harmonizes business law across 16 African nations) law and extend it later to other types of cases.
We expect to be done with the first phase of the project by the end of 2010.
If you know of any similar application currently being used in an African country, can you please post a comment?
February 20, 2010
Judicial Corruption and What Can be Done About It
This is even when it is abundantly clear that the judge was influenced in rendering a decision. If these magistrates were “massaging” the law in an effort to be fairer than the law is, this would be legislating from the bench which is still wrong but certainly more tolerable. But fairness has nothing to do with it.
Technically, judges are independent from the government and judges seem to take this independence quite literally. They are also independent from the law; independent from the facts; and independent from any semblance of ethics or propriety.
I asked an official in the ministry of justice why it was that despite the recent anti-corruption drive in the country, no judge had ever been charged with corruption. He explained that corruption was very difficult to prove since the judge could always justify his decision by stating is was judicial error. The most the government can do is to transfer them to a less desirable court or, in very rare cases, revoke them. Basically, incompetence is a judge’s best defense.
Because there is no fear of real sanctions, most judges are not afraid to render blatantly wrong decisions. The attraction of the bribe, which amounts in many cases to more than the judge can earn in an entire career, is much more potent than the fear of being transferred to some remote town where they will be handling disputes over goats.
In fact, the amount a judge was bribed in a case is often an open secret. My father died about a year and a half ago and as in most inheritance situations, siblings have been battling each other in court. One of them convinced a judge to order a marriage certificate to be drawn up for his mother, after getting the judge to order a birth certificate be issued to him. So after my Dad died, he mysteriously reemerged to have a 50 year old son and to get married. The marriage certificate clearly states:
On this day ….[3 months after my Dad died] Before us, appeared publicly….
The judge signed and certified the birth and marriage certificates. Some of my siblings who heard about this immediately petitioned the court to have the order nullified. Unfortunately for them, they ended up before the same judge who of course, stuck to his guns. This case created enough scandal that the judge was sanctioned pretty quickly. Although he was not transferred, he was sent cases of no significance. This meant that his bribe income dropped significantly. He complained to whoever would listen that he had jeopardized his career and had only received less than $3,000 for that court order and now realized it was not worth it.
In another case, a different sibling was able to get access to a bank account that held more than $2 million in it. In this case, he went judge shopping which is always a risk because the judge that doesn’t get the deal will spread the word. He first went to the only judge that had territorial jurisdiction over the matter. We don’t know all the details but the arrangement broke down and the sibling moved to another judge in another court. This judge, who was outside of the proper jurisdiction, requested about $20,000 to sign the court order. My sibling borrowed funds and came up with a $4,000 deposit, promising the rest when the order was signed. Days turned to weeks, and the order was still not signed. Eventually, the sibling realized that the judge had no intention of ever signing. He couldn’t very well ask for a refund.
He then found a judge, again who was completely outside the jurisdiction. Imagine a New York court having jurisdiction but you manage to get a Washington, DC judge to sign your order. This judge unfortunately was much more expensive but he came with a guarantee. He would get the President of the Court of Appeals of his jurisdiction in on the deal which would ensure that the decision would not be overturned. For that, he would require $80,000. After much negotiation, they agreed the judge would be paid when the funds were released from the bank. $80,000 to get $2 million seems like quite a deal.
Another sibling (the one with the birth and marriage certificate) filed criminal charges and tried to get his brother arrested. He paid about $16,000 for that arrest. The sibling who was arrested was later released pending the rest of the investigation. Since he had not been able to spend all of the $2 million before getting caught, there is still over $1 million blocked. Recently, he received a call from a government official offering to have the funds released and his case closed for a mere $40,000.
What I find truly remarkable is that I don’t see or speak to either of these siblings and received none of this information from them. I only know the details because they are just not a secret. These details are out in the public domain. I could go tell officials in the ministry of justice but I might just end up with the one who offered to fix everything for $40,000.
Besides, I will get the same response. Even though they know that corruption was involved, this is impossible to prove. Unlike in the US or Europe were you could talk about wire fraud and follow the money trail through various front companies and financial institutions, we live in a cash society. Unless any of them got a receipt for the money they gave these judges, the cash will be difficult to trace.
Not all judges are corrupt but the honest ones are becoming more and more frustrated. I have a friend who is a judge. He has never been involved in any of my cases but I often go talk to him because he always has good advice. I remember the first time I went to see him I was in tears because my case had been dragging on for so long it was going to bankrupt my company. His advice was to try to find a way to take the case outside of the country! Usually though, he is quite supportive and encourages me to persevere.
This last time, I spent two hours in his office trying to console him. He was discouraged, disgusted and even despondent over the state of the judiciary in the country. Judges he had always respected and admired were now involved in some of the most corrupt cases in the country. There was no incentive to be honest. No incentive to apply the law. In fact, judges who try to remain ethical are more and more ostracized by their colleagues.
This society is broken to its core. The lack of a fair judiciary impacts all segments of society. How do you enforce a patent for innovative technology you have developed? How do you enforce a contract? How do you obtain justice when victim of a physical crime?
For the last few years, I have been mulling about developing a software application for the judiciary. I know they won’t buy it but if I can build it and donate it, they won’t be able to refuse. This won’t stop corruption but it might help to bring more transparency to the system. For example, there would be systematic checks and balances in the system. Gone would be the judgments which are registered and executed before they are rendered (that has happened to me twice!). We could build a system that would be accessible to judicial authorities so that they could monitor cases from their desks instead of waiting for reports that might come too late. We could build in business intelligence that displays in charts and graphs how long cases are taking from beginning to end. The reporting could be by judge, by type of case, by jurisdiction, by lawyer, by party. This will not stop particular lawyers from always going to particular judges but at least this would more obvious.
Perhaps if God led a technology entrepreneur into the jowls of judicial corruption, He intended for me to do something about it. Perhaps God has nothing to do with it and I am still living in denial, hoping that the system can change, despite the evidence that it doesn’t want to. That’s the problem with entrepreneurs. Passion often overrides logic and leads to all sorts of justification for charging forward, blind to the reality around them. That is our greatest fault but it is also our greatest asset.
So I better start forging ahead with my judicial application…
January 19, 2007
Yellow Journalism: African Style
You know when you have really made it when you get trashed in our local equivalent of the National Enquirer. I got two full pages in last week's edition. I just found out today because no one I know really reads that paper (or admits to reading it). Someone finally called one of my colleagues to tell him.
I haven't seen it myself but my name in block letters was in the headline. The story goes into detail about how I swindled my business partner and how he sued me in various places and won. Of course, I have never had a business partner and the person mentioned as my business partner was in fact an employee who did indeed win a labor case under dubious circumstances as described in an earlier post: Do me a favor: Don't do me any favors.
I am torn as to how to react to the article. My business side laughs it off and won’t waste time worrying about it. My human side is distraught not necessarily that I am a victim of this latest attack, but that this is what has become of our struggle for freedom of the press.
Years ago, as a student, I was very active in the struggle for democracy and human rights for
Our newspapers have been filled with sensational stories dragging everyone from business people to political authorities, from singers and to sports stars. There is a common expression in the Country today: “He is a Top
This trend is not just bad journalism meant to sell newspapers; it is much more insidious than that. Most of the newspapers that engage in the “decimation” business don’t sell any advertising. It is clear that the revenue from the sales of the paper does not cover the cost of printing, so why would journalists risk jail time (defamation is a criminal offense here) to print stories that completely invented? MONEY, of course.
In my case, the newspaper published a teaser a couple days before they printed the whole article. “Coming Soon.. the underside of [me].” This was meant to attract me to the publisher so that I could offer him a larger sum than what had been offered by the person who brought him the article. Unfortunately for them, I did not bite.
This goes the other way too. A few years ago while I was visiting the country, I made the cover of two newspapers the same day with pictures and information culled from various sources. They were extremely kind to me. One article focused on my personal wealth and stated that I was the richest woman from that Country. I remember one sentence that read that “She does not talk to you unless it is in Billions.” I thought it was very funny at the time (I am very far from being the wealthiest anything). When I got back to the
You pay for negative stories against your competitors or opponents, pay for positive stories about you or your business, pay to keep your name from being dragged through the mud.
We end up reading the government official newspaper to get information. How sad. Is this what we fought for so hard? What will happen when the next journalist gets arrested for what is really a violation of his rights? Who will stand and fight for him?
January 12, 2007
It's the About the Application of the Law Stupid!
"...Creating an environment conducive to private sector development is another priority area. In this context, strengthening governance, including a sound and predictable legal and regulatory framework, and an efficient judiciary is important."It sounded almost as pertinent as the New Year speeches our President makes every year. Just as the Director of the IMF, our President really does seem to understand what is wrong with the country. The problem with him is the same as the problem with the Director of the IMF, they are either powerless to do anything about it other than making speeches that give people like me a half an hour's worth of hope that things will change, or they want to look the other way.
A few years ago, our President, in his New Year's speech announced the passage of a law eliminating taxes and duties on all information technology products. I was still living in the States then. About a month after his declaration, I landed in this country with computers, printers and other equipment for our local subsidiary. The customs officers were quick to tell me that we had to pay an inordinate amount of customs duty. We reminded them that the Head of State had announced that there was no more customs duty. They said that they had heard the speech as well and the law had been passed but that the “texts of application” of the law had not yet been drafted so we still had to pay. Of course, they offered a "discount" to keep it off the books. I thought that the receipt would be a weapon to use in the struggle to improve the business environment so we paid up.
A month later, the “texts of application” were published. Before anyone had a chance to take advantage of the new law, they repealed it. Taxes and duties were back on. No speech, no announcement, just those nasty “texts of application” that cancelled the law. Imagine the consequences for a company that placed a large technology order from overseas that had not yet received its merchandise? Not a nice surprise, especially not when the taxes and duties are about 50% of the value of the technology.
Back to the recent IMF visit. Of course, high on the list of the discussions was the fight against corruption. As in the President’s New Year’s speech and in many other political speeches, the government reiterated its commitment against corruption. But that little problem of the “texts of application” of the law creeps up again. In their Letter of Intent following the visit of the IMF, the country stated:
In April 2006, the government enacted a law defining the modalities for application of [the law], which refers to the disclosure of assets by senior government officials. Nevertheless, the commission that was to have been set up under this law to receive the asset declarations has not yet been established because the legal texts governing the application of the law have not yet been prepared. Similarly, the National Commission to Fight Corruption, created in March 2006, is not yet operational as its members have not yet been named, given the considerable time needed to ascertain the integrity of potential members.Given that corruption is the government’s top priority, you start to understand why nothing changes here. And every time the World Bank, the IMF or US Government officials come in, our government will proudly display the laws on the books to fight corruption, to improve the environment for the private sector, to fight poverty, improve education, etc. And the World Bank and friends will have their conscience relieved that their admonitions were effective and that finally the Country is "behaving." The laws are well written and sound great. The problem is not just that they are not applied but that there is no consequence for not applying them. The judges can see the laws and chose to ignore them with no consequence, same with the police, the custom agents and all other public servants. Until the Country has to account for the non-application of its laws, it will not establish mechanisms to enforce them.
December 27, 2006
Illegal Arrest
This morning, we sent a bailiff to the jail to report on the plumber's presence there. There is no written record of the plumber being held. There is no police report. There is not a single document to attest that he was arrested, why he was arrested or that he is actually being held.
Upon seeing the bailiff and one of our employees who went to the jail, the gendarmes tried to explain that he they arrested him for being drunk and that they would release him as soon as he is sober. Hen? You arrest someone in his house, half dressed because you say he was inebriated? No complaint filed, no report?
We are doing what we can to have the plumber released and we will likely succeed. Unfortunately, this is a story we hear all too often. Police officers will arrest anyone with just a few dollars. There is a new criminal code that goes into effect in a few days that is supposed to prevent such arbitrary arrests. But like everything else in this country, the problem is not the law, it is the application of the laws. The current laws do not allow people to be arrested for no motive, yet our plumber has already spent one night in jail.
In a recent Transparency International report on corruption in this country, the police was held as the most corrupt institution, followed closely by the judiciary. If the two institutions that are there to uphold the law are the ones most responsible for breaking it, what good is the law? I have never heard that any police officer has ever been arrested for corruption. A couple judges were disciplined for being corrupt. They were placed on early retirement and for the most egregious case, without pension. Basically, total impunity.
Until police officers and judges are made to pay for their crimes, they will continue to disregard the law.
Our plumber is lucky. We are around to help him. What about the others who have no voice and no possibility to speak out?
This place is nuts... Or is it me?
December 22, 2006
Do me a favor: Don't do me any favors
Beyond the obvious jurisdictional issues of a former "employee" who is based in Canada and had a contract with our parent company in the US; beyond the fact that we heard about the lawsuit by happenstance six months after it had been filed, that it was not filed in the city we are in; beyond the fact that this former employee was not eligible for any commission, the judge awarded him commission because "it was as a result of [employee]'s sister who worked for the [client]" that we got the contract.
In the judgment, the judge explains that if employee's sister had not given him inside information, we would not have had the contract and therefore, we need to pay him a commission.
I won't get into the fact that the commission was based on amounts that we never even received, or that it was an international tender that took us six months to respond to with a team of 8 full time employees working on the tender alone, or that the sister was a secretary who did not really provide information that was not widely available.
Back to the issue at hand. In the judge's mind, and in the minds of many people, if someone does you a "favor," it automatically generates a financial obligation towards that person that is a percentage of the benefits you might have received from that "favor."
A couple years ago, after we had won the first procedures in a big lawsuit, we started to be visited by all sorts of folks who claimed that it was thanks to them that we had won. We had never even met most of these people. And they all wanted money. One of them claimed to be the President's nephew. He said that he called someone at the Presidency and that official had called the judge. He said that the official had sent him to collect his due and that if we did not comply, we would be forever blacklisted. I told the nephew to tell that official that he should call back the judge and instruct him to do the opposite of what he had done, we would not pay.
Another young person introduced by a friend of mine did make a few calls for us. He said that he thought that what was happening to us was unfair and that he really wanted to help. Well, of course, story is now that we are ingrates because we never gave him any money after everything he had done for us.
About 5 years ago, while on a business trip here, I was asked to appear on a national television program. It was an hour long interview and it went well. A couple months ago, I met the father of the employee who had arranged the interview. He went on and on about how he (the father) had arranged the interview and how he had not even asked for any money. The suggestion was that we really owed him money but he was not forcing us to pay him.
And the amounts are not small. Once someone told us that he realized that we did not have much money but that $60,000 would be enough. Another offered his assistance if we gave him $400,000. One of our neighbors is a Certified Public Accountant. We needed someone to certify the arithmetic on an excel spreadsheet for the court. We offered to pay him at the time. He said no, it was nothing and in a few minutes, he certified the calculation. When we won the lawsuit, we received a bill for the equivalent of $175,000 for services rendered but as he stated, it was "negotiable."
There are many more similar stories. As a result, not only do we never ask for favors but even when offered, we refuse. It seems like such a sad way to operate but it is self preservation.
This place is nuts. Or is it me?
November 6, 2006
An American subsidiary has no rights -- How corruption leads to absurdity
A couple of years ago, the subsidiary had to take a large client, one of Africa's largest companies, to court after they would not pay their bills. After a year, many many court hearings, and lots of adventures I will eventually post about, we finally won a multi-million dollar judgment. Yea, we thought, finally! Our celebration was short lived. This client had better understood the legal environment than we had. Getting a judgment is one thing, enforcing it is a whole other.
The defendant filed multiple procedures to prevent us from collecting on the judgment. Their argument? Our company is a registered subsidiary of an American company and therefore we lack the judicial identity permitting us to appear in this country's courts.
What?! You can sign a contract with this subsidiary; use the product you bought from this subsidiary; you partially pay this subsidiary; this subsidiary can obtain a judgment; but when it comes to enforcing the judgment, this subsidiary has no rights. As absurd as the argument was, it took the lower court 6 hearings to render a decision (in our favor, thus against the "no rights" argument). The defendant took the case to the Court of Appeals which took 5 months to finally agree with the defendant. Yes, as a registered subsidiary of an American company, we have no rights.
Obviously, this is a huge loss for us but the repercussions of such an absurd decision are much farther reaching than our case. Indeed, all investors, local or foreign, must feel confident that their investment is protected. And, in case they have recourse to the courts, these will be impartial. If an investor from the all powerful USA cannot count on the judicial system in this African country, then who can?
There is evidence that the decision was reached after large sums were paid to certain judges by the defendant. We actually obtained proof of some of the transactions and submitted the evidence to authorities who did absolutely nothing.
We knew going in that in case of subjectivity, we would most certainly lose to this very wealthy and powerful defendant. This is why we sued only for contract based invoices, no damages. We thought that since the case had received so much attention, the judges would not risk taking decisions which were blatantly unfair. We were wrong. When faced with enough cash, the judges showed no shame.
How many investors will shy away because of this decision? How many jobs will be lost? The consequences of corruption don't end with immorality. There are economic consequences as well.

