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Pula Steel was a fraud - Keorapetse

Publishing Date : 21 February, 2018


Member of Parliament (MP) for Selebi Phikwe West, Dithapelo Keorapetse says that Pula Steel Casting and Manufacturing Plant was created exclusively for looting funds. The Botswana Congress Party (BCP) MP says that the creators of the company instead of “demanding money at gun point,” they formed Pula Steel as a better option to steal money.

Addressing his constituents on Wednesday afternoon in Selebi Phikwe, Keorapetse revealed that he has long reported Pula Steel to the Directorate of Corruption and Economic Crime (DCEC) with a number of cases to be investigated. The MP says he has always questioned the wisdom for coming up with Pula Steel when the biggest steel manufacturing companies in the world were crying foul about the market. Where was Pula Steel going to find an exclusive market for its product?” he asked rhetorically.

What raised eye brows, Keorapetse says when Pula Steel was established and registered in Botswana, a company called People Map was also formed and registered in India, allegedly owned by a relative of the Directors of Pula Steel to organise and export steel manufacturing expert labour from India to Selebi Phikwe. Another company was established and registered in India, also allegedly owned by relative of the said Indian Director of Pula Steel. Keorapetse says that his investigations found out that the company was supplying Pula Steel with equipment and other materials. Surprisingly still, another company was formed in South Africa to sell steel produced from Pula Steel, Keorapetse has said.

The youthful opposition MP says the fact that all these companies were formed at the same time and all linked to Pula Steel painted a clear picture of a money laundering scheme. Last year before the closure of both BCL Mine and Pula Steel, it was reported in Parliament that the Directorate on Corruption and Economic Crime was investigating a number of transactions at the BCL.

The then assistant Minister of Presidential Affairs and Public Administration, Phillip Dikgang Makgalemele had informed parliament that 18 cases were classified for investigation, nine were closed due to lack of evidence while eight were still under investigation. Details of the said corruption reports were not shared. Pula Steel was borne of a diversification strategy by BCL code named Polaris II which sought to diversify the operations of BCL from just mining and smelting.

Pula Steel which is a subsidiary of BCL Limited which has now been placed under final liquidation following its closure last year October is currently under judicial management. The steel manufacturing company was placed under judicial management by the High Court to suspend all order orders by creditors to attach the company’s property for auction.

Pula Steel’s Judicial Manager, Vijay Kalyanaraman of Grand Thornton who was appointed by the High Court said at that time that Pula Steel is not yet insolvent despite liabilities but it would need cash injection by shareholders for production to continue. Recent reports indicate that the Judicial Manager has applied for Pula Steel to be replaced under liquidation as shareholders have failed to inject the necessary cash to allow for recommencement of production.

On BCL Liquidation 

Keopratese has accused government of not being honest with regards to the main reason BCL was liquidated. He says that while Government closed BCL, the three billion debt to Norilsk Nickel was cited as the main reason yet in the court papers file by Government opposing Norilsk law suit, Government says they do not owe Norilsk that much. He says another burning issue was that Government was tired of bailing out BCL time and again.

Keorapetse explained that his investigation revealed that the last time Government had put money into BCL was 14 years ago and therefore the reason that BCL was bleeding Government’s coffers were not true. He said that there was a point BCL needed money for the smelter shutdown in 2014 but Government instead took one billion pula from BCL and put it into Government’s Consolidated Fund.

The MP who is also a scholar of Political Science says the one billion pula facility that Barclays Bank lent to BCL and guaranteed by the Botswana Government was an illegal transaction. He says according to the law that governs such transactions, it is not legally permissible for Government, an entity or individuals to have others guarantee a loan acquisition on behalf of others.

“How did Barclays lend BCL money when it has been declared insolvent, Government cannot guarantee a loan acquisition for an insolvent company? The law does not permit,” said Keoprapetse. He argues the only reason the bank would bail out BCL would be their own belief that the company would be able to sustain itself and pay-out the debt and therefore lending them money would not be a risk.

He promised to meet with the Mining minister to request for a free accommodation for former mine workers until Government has paid them retrenchment packages. Keorapetse also promised to table a motion that would seek to include the welfare of the workers in an event any company is placed under liquidation. He argues that liquidation is only concerned with creditors and the workers are left out in the lurch in the process and their welfare overlooked. Keorapetse also requested the Mine Workers Union to work with him in identifying draconian labour laws that tramples on the rights of the workers so that he can come up with motions that could help change things for the better.



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