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Viewing cable 09DAKAR716, Seniranauto: Senegal and Iran's white elephant.

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Reference ID Created Released Classification Origin
09DAKAR716 2009-06-11 08:57 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Dakar
VZCZCXRO6150
PP RUEHBC RUEHDBU RUEHDE RUEHGI RUEHIHL RUEHKUK RUEHLH RUEHPW RUEHRN
RUEHTRO
DE RUEHDK #0716/01 1620857
ZNR UUUUU ZZH
P 110857Z JUN 09
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 2539
INFO RUEHIC/ORGANIZATION OF THE ISLAMIC CONFERENCE
RUEATRS/DEPT OF TREASURY WASHDC
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