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New broom Glaum facing BCL heap of muck

A less known but old company from the South African city of Cape Town, Sanek Trust Recovery Services, this week assumed the heavy task of managing the insolvent mine of BCL and provisional liquidation of  Tati and BCLI.

BCL creditors and the nation waited in anticipation for the man who is going to replace Nigel Dixon-Warren who was fired abruptly, and Trevor Glaum is now at helm. Leading a company established in 1970, Glaum has a bigger challenge of liquidating a 63 year old mine whose abrupt liquidation was a matter of controversy since BCL was placed under liquidation which stalled for three years.

No much information of how Glaum or his company Sanek landed the role of BCL liquidation but on Wednesday this week outgoing liquidator Nigel Dixon-Warren wrote a communication that was spread to creditors and other stakeholders announcing that he is stepping down. Furthermore Dixon-Warren announced the takeover by Glaum of Sanek. Dixon-Warren announced that Sanek’s Glaum will be the sole liquidator of the controversial BCL liquidation starting from Wednesday this week following his (Dixon-Warren)’s resignation on Tuesday of the same week.

Glaum will also be a jointly co-provisional liquidator of BCL Investments or BCLI with Stephen Gore of Sanek. BCLI is an investment arm owned by BCL Limited. BCL limited also owns the BCL mine.Dixon-Warren also reminded that on the 26 July 2019 the Court of Appeal issued a provisional order that the estates of BCL and BCLI should be inter alia wound up as one company, in terms of section 468 of the Companies Act.

The matter has been referred back to the High Court to determine the time periods before which the order will become final. Glaum together with Sivalutchmee  Moodliar, his colleague at Sanek, are co-provisional liquidators of Tati mine which is owned by BCL Limited with a stake of  85 percent.

Political interference

When handing over BCL to Dixon-Warren in October 2016 the then vice president Mokgweetsi Masisi who is now the state leader pleaded that the man be given a chance without any interference.  However Dixon-Warren found himself caught in a political storm as his liquidation fees caught the attention of legislators who felt he was getting too much or was out to rip government off. Dixon-Warren’s call for resignation came as a backlash coming from across the entire political divide agreeing that his head be chopped.

A political pressure started by an MP coming from an area with people who are affected by the closure of the mine who asked how much the Dixon-Warren was earning for BCL liquidation, and then it reached a minerals minister who also felt the liquidator was a liability. The BCL closure and its liquidation has become a huge political project and Glaum’s character will be tested beyond measure as politics became the demise of his predecessor.

Financial position of BCL

In the Tenth Status Report to the creditors the outgoing BCL liquidator Dixon-Warren said the financial position of BCL since 26 October 2016 was at P108 923 527. This is the money reflected 19 days after BCL was closed.  “On 28 February 2019 the level of funding in the estate went down rapidly to P78.5 million and the rate continues to diminish. Government of Botswana is the lead creditor in this liquidation with and its claims against BCL account for a total of P1.35 billion or 94 percent of the proven claims,” Dixon-Warren.

Minister of Mineral Resources, Green Technology and Energy Security Eric Molale recently told Parliament that government has already spent  P600 million on liquidation since the process began in 2016.Glaum will see himself out of the total recurrent budget estimates for the financial year 2019/2020 which is P733 061 670 and represents an increase of P327 127 210 or 81 percent from this year’s allocation of P405 934 460 because the significant increase is mainly due to BCL funding for rehabilitation.

This means the mine will continue to gobble a lot from government fiscal budget in this coming financial year. In his report to creditors Dixon-Warren said for the Phase 1 of the project of rehabilitation around P50 million and P100 million is needed, hinting that more money from the government until winding off.

Legal battles waiting for Glaum

Glaum got into an office which is not without a headache or stress. The hot seat of being a BCL liquidator also comes with burning litigations being thrown from all places as the mine was closed down abruptly while overlooking at many underlying legal issues. Standing tall before Glaum is the fight for the sale of Nkomati and Tati mines with Russian mining giant Norilsk.

Another impending legal tussle waiting for Glaum and Sanek is the one with a Zimbabwean mining company RioZim. The outgoing liquidator Dixon-Warren reported to the creditors recently  that he already has commenced recovery proceedings against RioZim in Zimbabwe for P340 million owed to BCL. In this court application BCL alleges that it is owed P340 million for some minerals sold to its Zimbabwean counterpart RioZim. In this application BCL seeks to attach RioZim refinery or have it put under the hammer.

“The replacement liquidator will need to apply to the High Court of Zimbabwe to be recognized as a foreign liquidator in order to continue with this litigation. Thereafter, the replacement liquidator will need to file security with the Zimbabwean Master in order to be allowed to proceed with the litigation,” Dixon-Warren who is handing over to Glaum advised creditors in his last liquidation report.

Glaum will also have to put on his legal amour and lock horns with construction and building materials giant PPC which is said to have failed to adequately rehabilitate the waste rock dump over which it was granted a lease by BCL. This litigation is on-going.  According to documents, the quantum of this claim has yet to be finally determined but will amount to several million Pula, according to Dixon-Warren.

BCL should also sue Air Liquide for failing to deliver equipment pre-liquidation to a subsidiary of Tati and as a consequence of this failure substantial storage costs have been incurred by the BCL Group, the BCL is claiming P20 million for any incurred damages or liabilities. Outgoing BCL liquidator said these goods which Air Liquide failed to deliver are stored in Belgium, South Korea and France.Air Liquide deals supplies industrial and specialty gases to the steel, automotive & fabrication, food & beverage, mining, petrochemical, pharmaceutical and glass industries.

Glaum leads BCL as it will go on head-on with Barclays Botswana for what the previous liquidator in the last creditors report being the Twelfth Status Report said the bank for three years failed to return a sum of P1.4 million which was incorrectly paid to the BCL pre-liquidation account. Glaum may also decide to go to court as Dixon-Warren suggested in the creditors report the bank has ignored several attempts by BCL to have the money recovered or the account in question closed.

Sale of the mine

Selling BCL mine has been a daunting task for Dixon-Warren who said many fear investing on an old mine which will come with a lot of uncertainties. Glaum inherits that problem of the mine which remains unable to get a buyer. Many investors are reported to be at qualms with the P2.8 billion which should be set aside for Environmental Rehabilitation Liability even in the event of a closing plan when the mine goes for closure. The sum of P2.8 billion was seen as an environmental rehabilitation and reclamation obligation by a report carried out by Dixon-Warren in 2015 and this amount remains an obligation few buyers would be willing to accept given the present value on site at BCL.

However there are reports that there has been interest shown from around the world. In an interview this year, Dixon-Warren did not want to divulge names of who he met as interested in buying the mine. Dixon-Warren said he has dealt with a number of international companies who have the skills, expertise and finance for BCL, but “none of them has made any offer after undertaking initial assessments of information. It doesn’t take much to assume who those big companies might be.”

Glaum and Sanek

As Glaum and Sanek take over the ruins that is left of the legendary BCL it is not clear whether the company has what it takes to handle the mine. Sanek is an acronym for Suid Afrikaanse Nasionale Ekseketeurskamer. In its website Sanek touts itself for being able to manage liquidation of a large property, Glen Anil, which was listed on the Johannesburg Stock Exchange (as it then was) found itself in financial difficulty and was wound up.

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Free at last: Ian Kirby Speaks Out

6th December 2021
Justice Ian Kirby

The outgoing President of the Court of Appeal, Justice Ian Kirby, shares his thoughts with us as he leaves the Bench at the end of this year.

WeekendPost: Why did you move between the Attorney General and the Bench?

Ian Kirby: I was a member of the Attorney General’s Chambers three times- first in 1969 as Assistant State Counsel, then in 1990 as Deputy Attorney General (Civil), and finally in 2004 as Attorney General. I was invited in 2000 by the late Chief Justice Julian Nganunu to join the Bench. I was persuaded by former President Festus Mogae to be his Attorney General in 2004 as, he said, it was my duty to do so to serve the nation. I returned to the Judiciary as soon as I could – in May 2006, when there was a vacancy on the High Court Bench.

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Civil society could rescue Botswana’s flawed democracy’ 

6th December 2021
Parliament

Botswana’s civil society is one of the non-state actors that could save the country’s democracy from sliding into regression, a Germany based think tank has revealed.  This is according to a discussion paper by researchers at the German Development Institute who analysed the effects of e-government usage on political attitudes In Botswana.

In the paper titled “E-government and democracy in Botswana: Observational and experimental evidence on the effects of e-government usage on political attitudes,” the researchers offer a strongly worded commentary on Botswana’s ‘flawed democracy.’  The authors noted that with Botswana’s Parliament structurally – and in practice – feeble, the potential for checks and balances on executive power rests with the judiciary.

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Bangwato at loggerheads over Moshupa trip

6th December 2021

Bangwato in Serowe — where Bamagwato Paramount Chief and former President Lt. Gen Ian Khama originates – disagree on whether they must send a delegation to dialogue with President Mokgweetsi Masisi’s family in Moshupa. Just last week, a meeting was called by the Regent of Bamagwato, Kgosi Sediegeng Kgamane, at Serowe Kgotla to, among others, update the tribe on the whereabouts of their Kgosi (Khama). 

Further, his state of health was also discussed, with Kgamane telling the attendees that all is well with Khama. The main reason for the meeting was to deliberate on the escalating tension between Khama and Masisi — a three-year bloodletting going unabated.

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