The SIPL/SGBS affair is a case study of the abusive post-colonial control of France over its former colonies that still goes on as we published this post. Afrikonomics investigated.
Since the era of colonization began, Europe has treated its African counterpart as a subordinate. As the end of World War 2 weakened the European empire and led to a wave of independence in the African continent, European governments did everything to keep the black continent on a leash. In France, the secret networks that operated a major influence on its former colonies were commonly known as Françafrique. Composed of politicians, spies and businessmen, the Françafrique has a machiavellian approach to maintaining its economic interests in the African region.
To control a country, the name of the game is money. Before most of the French colonies claimed their independence, former French president Charles de Gaulle offered them to be part of the French community and share the same currency, the Franc CFA, which is controlled by the French central bank. French banks naturally settled in those countries as they could provide the convertibility necessary for economic stability and progress. Those who refused to join the French community went through some tough times and never really managed to reach a financial stability.
This leads us to the story of the Société Industrielle des Produits Laitiers (SIPL). This Senegalese company created in the seventies had the ambition to set up an autonomous milk production unit in its region. The SIPL seriously jeopardized Nestlé’s interests in that region, and the Société Générale became the Françafrican instrument to kill the SIPL. Alerted by the existence of a 25-year trial between the SIPL and the Société Générale, Afrikonomics led its own investigation on that matter, and the findings below are shabby to say the least.
For Société Générale, Africa is money without ethics
La Société Générale is one of the most controversial banks in the history of modern banking, alongside Goldman Sachs, BCCI, Banco Ambrosiano, and Clearstream. The Kerviel affair – where the bank had obviously scape-goated one of its trader following a $5-billion loss amid the subprime crisis – unveiled one of the biggest banking fraud of the decade. In the Panama Papers, Société Générale was caught red-handed managing +950 offshore companies for its clients.
In Africa, the Société Générale does not hesitate to flirt with abusive regimes to serve the interests of the Françafrique. In the affair of the “Biens mal-acquis” (“ill-gotten goods”), 5 African presidents were accused of funnelling huge amounts of money out of their countries to purchase luxury real estate and collectible cars in France. It has been revealed that Société Générale helped the Obiang clan (family of the Equatorial Guinea’s president) evade at least €200 million, which was in part used to purchase the most luxurious 6-story mansion on avenue Foch, along with Renoir paintings, and even gold records that belonged to Michael Jackson. An impressive list of collectible cars – Bugatti-Veyrons, Ferraris, Maseratis, a Rolls Royce limousine – is also part of the decadent spendings of the Obiang family. Former employees of the Société Générale testified and acknowledged that “a system” was in place within the french bank to allow the president’s family to move around large sums of money without verifying its origins.
In 2011, the ONG Global Witness revealed that many banks, including the Société Générale, were managing the state oil funds for the Libyan leader Gaddafi. Entrusting banks with state funds means that those entities are not required to disclose the state funds they manage (a way to hide and evade money). According to Global Witness, the Société Générale was handling at least $1 billion in state funds. In 2016, the Libyan Investment Authority (LIA) sued Société Générale for $2,1 billion, accusing the French bank of giving placement advices that led to billions in losses for LIA, and major profits for the French bank.
This is just the tip of the iceberg. The Société Générale has offices all over north and west Africa. In many countries, it holds a dominant position in the banking industry. It moves heafty sums of money around, contributes to major development projects, and is a key component to Africa’s high-rise corruption. But it always answers to the motherland’s orders, as it is a mere tool for France’s economic control of Africa.
Nestlé, weakening Africa since 1916
This year, Nestlé celebrates 100 years of operations in Africa. The Swiss company set camp in South Africa in 1916, and opened its first factory in 1927. In 2015, Nestlé was managing 26 factories with a workforce of 16 000 employees in Africa. In the last 5 years, it invested $880 million in the black continent, a region that represented 3.6% of the company’s global sales in 2014.
Quoting John Miller, senior vice-president of Nestlé overseeing the subsaharian region, « Instead of talking about the weight of Africa in our revenues, we’d rather talk about Nestlé’s contribution to the development of the continent. »
Nestlé doesn’t want to talk about its revenues in Africa because the multinational just scaled back on its African operations due to an inaccurate assessment of the african market. So let’s not talk about Nestlé’s revenues in Africa, and let’s rather talk about Nestlé’s contribution to the development of the continent.
Nestlé has a black history (no pun intended) in Africa. The most crying example is the Nestlé boycott : In 1973, a manifesto, The Baby Killer, was published. It reported that in Africa, Nestlé promoted its infant milk as a substitute to breast milk, amid numerous infant deaths linked to the consumption of Nestlé’s poorly-nutritive milk. After a fierce lawsuit won by Nestlé, a national boycott was launched in 1977 in response to Nestlé’s lack of ethics in the third world. To this day, and despite Nestlé’s efforts to end it, the boycott is still going strong.
Despite the boycott, Nestlé kept engaging in unethical practices. In 2010, Pius Bissek, owner of Camerounese milk-producing company Codilait won a lawsuit against Nestlé. The feud ? In the nineties, Bissek was startled by Nestlé’s new dairy product, Gloria, and its ability to go low in prices. After scrutinizing Gloria’s composition in a lab, he made a horrific discovery : The “milk” only contained palm oil, coco oil, and soy. Not a single drop of milk. So Bissek sued the Swiss giant for unfair competition and won. This led other families to sue the Swiss food company after realizing that their dead infants had been fed with Nestlé’s dairy products.
Another story is worth narrating : In 1975, French president Valérie Giscard d’Estaing paid an official visit to the Democratic Republic of the Congo (formerly Zaïre). Among other things, he offered the Congolese authorities to help with the construction of a milk factory to contribute to Congo’s industrial development. Worried that this factory would lower its imports in the country, Nestlé managed to be put in charge of the construction of the milk factory. While the factory was built, the machines never produced a drop of milk. Nestlé intentionally sabotaged the project to keep its tight control over the region.
Nestlé has consistently proven that it considers Africa as a sub-region of the world that needs to be weakened to be controlled.
SIPL/SGBS affair : When Société Générale and Nestlé partner up for the greater bad
In Africa, when Société Générale meets Nestlé, the result is plain looting of the continent. Few victims have reported the wrongdoings of the pair in Africa, but Amadou Moctar Sow, owner of the Société Industrielle des Produits Laitiers (Industrial Company of Dairy Products), did. Don’t look for the name of his company on Google, the SIPL was forced to shut down its operations in 1993 after the Société Générale de Banques du Sénégal (Senegalese subsidiary of Société Générale) ripped off all its real estate assets.
It all started in the seventies : Amadou Moctar Sow, young Senegalese entrepreneur, created the SIPL to produce milky products in Western Africa. Nestlé, who cannot tolerate any initiative that leads to less profits in the black continent, reacted swiftly and opened its own dairy factory in Senegal 2 years after the SIPL did. For a decade, Nestlé led a price war against the SIPL to reduce its market shares and sink the company.
When Nestlé realized that the SIPL was resisting and prospering, the Swiss company switched its strategy. In the early 1990s, Nestlé changed bank and went with the Société Générale de Banques du Sénégal (SGBS), the same bank that handled the SIPL’s money and assets. A few months later, the SGBS warned the SIPL that it had to reimburse its credit to the French bank, or else its real estate assets would be seized. Surprised, the SIPL asked for more time to investigate on that matter. Oddly impatient, the SGBS did not wait, seized the SIPL’s real estate assets and sold them in a jiff. Hence the SIPL was stripped off its factory, unable to produce and sell its dairy products.
Amadou Moctar Sow did not give up : After investigating on the SGBS’ request to reimburse the SIPL’s credit, it turned out that the SIPL had already reimbursed its debts to the SGBS, and was not a creditor of the bank at the time its assets were seized. The SGBS used counterfeited documents to build its case against the SIPL and seize its offices and factory. 2 years after the SGBS seized and sold the SIPL’s assets, Amadou Moctar Sow’s ripped company went RIP’d.
Coincidence ? Considering the ethics of Nestlé and the Société Générale in Africa, the conspiracy theory against the SIPL is prima facie.
In 2015, the court recognized that the SGBS acted abusively and did not have the right to seize the SIPL’s assets, sentencing the French bank to reimburse the SIPL, and to pay him substantial amends for the damages. Of course, the SGBS appealed the court’s decision. The full payment to the SIPL is still pending.
The SIPL/SGBS affair is a case study of how European companies such as Nestlé and the Société Générale loot Africa of its assets, with a total disrespect for the sovereignty of the continent’s countries. On one hand, French companies finance development projects in Africa, but on the other hand, they cannot bear to see Africa gaining economic independence, because if Africa were financially autonomous, France would lose its world leadership.