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Job cuts looming at African Alliance after BPOPF terminated contract

Publishing Date : 27 January, 2020


Following the boardroom wars between Botswana Public Officers Pension Fund (BPOPF) and Choppies Enterprise Limited- African Alliance became the biggest loser after BPOPF terminated the P5 billion investment fund under its management.

The termination of the contract happened under unclear circumstances, with initial reports indicating that BPOPF was not happy with the approach adopted by African Alliance in the Choppies boardroom politics involving Chairman Festus Mogae and Chief Executive Officer, Ramachandran Ottapathu. When speaking to WeekendPost this week, African Alliance CEO, Sean Rasebotsa revealed that BPOPF summoned them to understand their positions on election of Directors on to the Choppies board last year September.

“We were instructed on how to vote during Choppies Extraordinary General Meeting (AGM). They actually instructed us on how to vote and they are entitled to do that. It is normal because ordinarily when they give us the mandate, they give us the power to their attorney to act on their behalf,” he shared. He also said they were given the rights to exercise proxy voting on their behalf. Rasebotsa said African Alliance followed the instruction to the letter, dispelling allegations that the decision to terminate the contract had anything to do with the Choppies saga.  

The CEO of African Alliance said prior to terminations of their contract, BPOPF originally invested P3 million equities and P1 million fixed income in 2015 but in 2018 they gave them another allocation of Kgori Capital to be their asset managers for another P1 billion which made it P4 billion under their management. “In 2018 they invited us to tender and we responded to the tender,” said Rasebotsa. Rasebotsa indicated that BPOPF resolved in 2019 to award the tender to African Alliance.

“They were reviewing all the mandates and they were giving us additional funds,” He said the additional funds was supposed to surplus more than P5 billion of the investment which was subject to satisfactory conclusion of the investment management agreement. Rasebotsa said the fund management company will retrench more than 50 percent of its staff by the end of January, with 11 employees being laid off.

He expressed his disappointment saying they wished they knew what reasons were prior to termination of the contract, as they did not have any issues around performance and also service issue. Rasebotsa said it might be a situation whereby they were expected to possibly vote in line with their instruction for other clients but they couldn’t do as an independent asset manager.

“We had a smaller number of pension fund that we also have shares to, but we have different views around the BPOPF, but it was not even material to the voting because it was less than one percent,” Rasebotsa said. The contract was supposed to be reviewed at the end of the three years.