Seniranauto: Senegal and Iran's white elephant.

UNCLAS SECTION 01 OF 02 DAKAR 000716 SIPDIS SENSITIVE DEPT FOR AF/W, AF/RSA, DRL AND INR/AA PARIS FOR AFRICA WATCHER E.O. 12958: N/A TAGS: PGOV PREL PINS PINR EINV ECON KCOR SG SUBJECT: Seniranauto: Senegal and Iran's white elephant. ¶1. (SBU) SUMMARY: Seniranauto, a car assembly plant with an estimated 40 billion CFA (80 million USD) investment between Senegal and Iran's automaker Khodro, has been hit by a highly publicized scandal. Three years after its launching, the plant has no production but local media reports have put it at the center of a major financial scandal. End Summary A financial scandal -------------- ¶2. (SBU) Initiated in 2006, Seniranauto was envisaged by President Abdoulaye Wade as a project that would promote the kind of South-South cooperation he had wanted to showcase as the future way of doing business. Countries like Iran, China, India, and Brazil are lauded by Wade as ideal partners for both their flexibility and their no-questions-asked policies. However, the Seniranauto project has become a scandal rather than a success story. A Senegalese employee named Cheikh Tall Sow, who forged a degree as a Specialist in Automated Processes, managed to become a close confidant of the company's Iranian Director. He allegedly pocketed payments for fake bills, inflated invoices, and defrauded the company of several million CFA. He also abused the privileges extended by the GOS to the company, i.e. the waiving of custom duties for its imports. Sow allegedly imported computer equipment and many other goods duty free to resell them on the local market. The customs authority is still tallying the magnitude of the fraud. Collective whistle blowing -------------- ¶3. (SBU) According to press reports, the employees of the company themselves finally ended the fraud by kicking Sow out of his office and forbidding him to set foot on company property. The employees complained of not receiving their salaries for eight months and have expressed fear for their future. They do not understand why the Iranian Director, Abdourahmane Ghalambor, does not side with them in their attempt to neutralize Sow. Employees told a reporter that Ghalambor went as far as accompanying Sow to a local police station to complain against the company's staff. A sex scandal -------------- ¶4. (SBU) The investigative reporter who broke the scandal in a local daily shared with the Embassy some additional details of the scandal that he has not reported publically, and which would explain Ghalambor's odd behavior. Reportedly, Sow procured women for the Iranian director and he has photos of their activities in his computer. The reporter claimed that Ghalambor's secretary was one such "service-provider" supplied by Sow and that he had also introduced Iranian expatriates to his ring of prostitutes. The reporter strongly suspects that Sow blackmailed the Iranians to keep his personal financial dealings quiet. He is now in prison pending charges. A senior official at the Ministry of Justice in charge of criminal affairs told Embassy he would ask the Prosecutor General to report to him about the status of the case because he was not aware of it. Sow is a flimflam artist of some repute known for forging degrees and signatures but also for trying to marry the daughters of rich or influential people. It is rumored that he almost married the daughter of former Senegalese President Abdou Diouf while the latter was in office but that that scheme failed because he stole a ring from his then fiance. No production -------------- ¶5. (SBU) The company's Iranian management recently told the media that they will soon enter phase two involving the transfer of technical management to the Senegalese. However, the reality is that the plant has no production. An employee at the factory told Embassy that there are currently only 25 Samand type four-door sedans that came almost fully assembled from Iran meaning that workers only do minor adjustments on them before putting them up for sale. Recently, sixty similar vehicles were donated by Iran as part of the GOS's project to renew the country's ancient fleet of taxis. But these gasoline-engine vehicles are not economical and cannot compete with Japanese cars equipped with lower cost diesel engines. At a cost of approximately 14,000 USD, the Samand will, even if the plant is fully operational, find it difficult to win a large market share for taxis. COMMENT -------------- ¶6. (SBU) The Iranian DCM accused "foreign powers" of manipulating workers to sabotage this project between two "Islamic countries." The reporter who investigated the case told the Embassy that the Iranian diplomat singled out Israel and criticized the local press DAKAR 00000716 002 OF 002 for making positive reports about them. Senegal and Iran's cooperation has been celebrated by both sides but so far it has not developed beyond the flowery rhetoric surrounding it. Bernicat