http://news.bbc.co.uk/2/hi/business/6365433.stm This is really sad. Sad that a few profiteering people deprive the poorest nations out of so much money - money that could be used to help its citzens. Zambia should just 'ignore' the ruling, if possible. Zambia loses 'vulture fund' case Child in Zambia Zambia's infrastructure plans could be threatened See Newsnight's Vulture Funds report A High Court judge has ruled that Zambia must pay a substantial sum to a so-called "vulture fund". British Virgin Islands-based Donegal International paid less than $4m for a debt the African nation owed, but sued Zambia for a $42m repayment. It said its bill was the result of interest and costs, but the judge will decide how much Zambia should pay. The ruling has angered anti-debt campaigners, who say it will undermine Zambia's plans for poverty reduction. Concerns Vulture funds - as defined by the International Monetary Fund and UK Chancellor Gordon Brown among others - are companies which buy up the debt of poor nations cheaply when it is about to be written off, then sue for the full value of the debt plus interest. There are concerns that such funds are wiping out the benefits which international debt relief was supposed to bring to poor countries. A Zambian presidential adviser and consultant to Oxfam, Martin Kalunga-Banda, said $42m was equal to all the debt relief it received last year. "It means 30,000 children who would have benefited from going to school free will not be able to do so," he told the BBC. "It also means the treatment, the Medicare, the medicines that would have been available to in excess of 100,000 people in the country will not be available." Martin Kalunga-Banda The Zambians at that time did not even have the capacity to know this was happening Martin Kalunga-Banda Mr Kalunga-Banda added that while the repayment might be legal, it arose from debts accrued when the country was under "an undemocratic system". "The consequences of the debt are impacting on the people of Zambia," he said. "The Zambians at that time did not even have even the capacity to know this was happening and that is probably what brings in this issue of unfairness." 'No comment' In 1979, the Romanian government lent Zambia money to buy Romanian tractors. Zambia was unable to keep up the payments and in 1999, Romania and Zambia negotiated to liquidate the debt for $3m. But before the deal could be finalised, Donegal International, which is part owned by US-based Debt Advisory International (DAI) stepped in and bought the debt from Romania for less than $4m. DAI founder Michael Sheehan was confronted by the BBC's Newsnight programme before the court ruling, but said only: "No comment. I'm in litigation. It's not my debt." Profiteering doesn't get any more cynical than this Caroline Pearce Jubilee Debt Campaign In 2002, Gordon Brown told the United Nations that the vulture funds were perverse and immoral. "We particularly condemn the perversity where vulture funds purchase debt at a reduced price and make a profit from suing the debtor country to recover the full amount owed - a morally outrageous outcome." Jubilee Debt campaigner Caroline Pearce said that vulture funds "made a mockery" of the work done by governments to write off the debts of the poorest - a key theme of 2005's Live8 concert. "Profiteering doesn't get any more cynical than this," Ms Pearce said. "Zambia has been planning to spend the money released from debt cancellation on much-needed nurses, teachers and infrastructure. "This is what debt cancellation is intended for, not to line the pockets of businessmen based in rich countries."