Capital Management Botswana (CMB) directors, Rapula Okaile and Tim Marsland want the Statutory Manager’s report on their company to be reviewed and set aside because it characterised by falsehoods, bad faith, unreasonableness.
Okaile and Marsland’s decision to approach the court to set aside Peter Collins’ report comes following a liquidation hearing this week at which their attorney suggests he was unfairly treated and mocked. He further narrates that the process was flawed and natural principles of justice were not observed.
Okaile and Marsland in their affidavit to court posit that Collins’ findings and conclusions are not supported by any facts indicative of any wrong doing on the part of CMB directors or the company. “They are also not supported by any business principles of how private equity functions or operates,” writes Okaile.
In addition Okaile stresses that by the time Peter Collins was appointed, Capital Management Botswana had no interest inn the Botswana Opportunities Partnership as it was disposed of in October 2017 and Capital Management Botswana was removed as Manager by the new owner prior to the appointment of Peter Collins. “In the context of the flawed understanding and misappreciation of principles of private equity, Peter Collins’ reports are unreasonable, irrational and have been prepared with ulterior motive and should therefore be reviewed and set aside.”
Okaile disputes the indebtedness of Capital Management Botswana and further states that claims that the company is insolvent are false and problematic. “He concludes that Capital Management Botswana is indebted to various persons and entities. He makes the findings without asking the company directors about the debts and inquiring from them whether such debts exist and if they do, why they have not been paid.”
Okaile further writes that besides debts which are denied or opposed on bona fide basis, Peter Collins recommends liquidation on the basis of a possible damages claim. “An unproven damages claim can never be a basis upon which a company can be liquidated.” According the CMB director based in Botswana, the fact that Peter Collins would want Capital; Management Botswana to be liquidated on account of possible damages claim is clear indication of bias, improper motive and desperate desire to want it liquidated at all costs. Okaile is of the view that the conduct of the Statutory Manager is unlawful and liable to be set aside and reviewed.
“The other basis upon which his reports particularly the one dated the 7thth of June 2018 should be set aside is that, he prepared it when he was not confirmed as Statutory Manager. “…he cannot have prepared the report before the court confirmed his appointment.” Okaile is adamant that Peter Collins’ reports were prepared illegally and should be set aside.
In disputing claims that they have siphoned P500 million from pensioners Okaile is adamant that they have proven that assets do exist that cover the alleged figure. He also points that Kawena, which is disputed is a big company operating from Mozambique and BOP has a 50% share in it.
WHAT CMB DIRECTORS DISPUTE
According to the former judge Collins in his statutory report, a P20 million loan under investigation appears to have originated from a verbal request by Cell City’s management to CMB’s Tim Marsland “for a short term facility to fund working capital in order to finance a one-off deal for purchase and sale of mobile handsets.”
According to a leaked CMB Statutory Management Report prepared by former High Court Judge, Peter Collins, the audited financial statements of Cell City after BOP investment shows a Cash flow statement reflects negative operating cash flow of P49, 559,259, negative investing cash flow of P4, 164,870 financed by net cash raised of P49, 978,510 from a share issue and a related party loan, primarily from BOP.
Net cash flow for the year was a negative P3, 270,898 according to Cell City’s financials. The statutory manager Collins was appointed by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) to CMB.According to the CMB Statutory Management Report, the balance sheet reflects total assets of P109, 976,679; equity of P48, 887, 605; and liabilities of P61, 089,074. The Profit and Loss account reflects revenues of P202, 433,257 and a pre-tax profit of P20, 140,268.
The Statutory Management Report has also curiously found that during the financial year of 2017 shares were issued to raise the issued share capital to P30 million but there was nowhere where a reflection of an increase in the number of shares in issue. What raised the statutory manager’s eye brows was a P20 million loan which was facilitated obscurely and not documented in the company’s financial records.
“I have nothing to add to section 19 of my Interim Report save that I neglected to state that the loan of P20 million was advanced by CMBF1 whereas the Financial Statements of the company reflects it as a loan from BOP, viz the equity investor. BOP at no stage gave authority for the introduction of this debt. Payment of it was made from general funds in the CMBFl bank account. The debtor/creditor relationship would nevertheless appear, at least ostensibly, to be between the company and BOP (rather than CMB).
That is the way the company understood it. Moreover, I do not think that it can fall from the mouth of CMB that it was extending its own resources to an unsecured commercial loan to a company in which its principal (BOP) holds 50 percent equity,” said the statutory manager Collins in his report seen by this publication. The statutory manager further revealed that the loan is unsecured with no set term for repayment and no agreed rate of interest.
It is also stated that this fact is confirmed in the audited financials dated 30 September 2017. However, the borrower has undertaken to pay (and has paid) interest at an effective rate of 5 percent p.a. since October 2016. P346, 393.42 in interest has been paid up to 31 December2017 said the statutory manager.
The deal which saw BOP buying 50 percent stake in Cell City was the centre of a meeting held by the BOP Investment Committee held at the plushy Sunny Side Hotel in Johannesburg, South Africa. Those in attendance at the meeting were Rasoava Rijamampianina who was chairing the meeting, Martin Makgatlhe, Tim Marsland and Rapula Okaile. It is revealed in documents passed to this publication that the minutes of the meeting reflect that the investment was “presented, discussed and approved.”
However, according to the statutory manager, it is not clear whether a specific detailed investment case was presented. In the Statutory Management Report which followed the ongoing CMB liquidation, Collins says the relationship between CMB and BPOPF in respect of the BOP is in dispute and is pending litigation and arbitration.
CMB challenges Liquidation handler
Okaile and Marsland have since written a letter to the Registrar and Master of the High Court raising concerns and complaints at the manner in which the Ms Chipo Gaobatwe handled the inquiry. They state that she handled the inquiry in a very biased and unfair way. According to their affidavit, “She was impatient, temperamental and hostile to clients’ attorney, Mr Gabriel Kanjabanga.” They state that she was blantandly biased towards Mr Peter Collins who is the liquidator’s legal advisor.
According to Okaile and Marsland, Kanjabanga was constantly interjected and interrupted when trying to make submissions. “Clients attoney was constantly threatened with contempt and thus was prevented from fully and effectively representing the clients to the best of his ability.” They want the Master to intervene “in the most legally possible way”.
CMB Directors threaten Desai
Okaile and Marsland have also written a letter to Rizwani Desai of Desai Law Practice accsuing him of using information they consulted him on against them in court. They have informed him that they will be reporting him to the Law Society of Botswana because he breached his professional ethics.
While there is no hard-and-fast rule in politics, former Molepolole North Member of Parliament, Mohamed Khan says populism acts in the body politic have forced him to quit active partisan politics. He brands this ancient ascription of politics as fake and says it lowers the moral compass of the society.
Khan who finally tasted political victory in the 2014 elections after numerous failed attempts, has decided to leave the ‘dirty game’, and on his way out he characteristically lashed at the current political leaders; including his own party president, Advocate Duma Boko. “I arrived at this decision because I have noticed that there are no genuine politics and politicians. The current leaders, Boko and President Dr Mokgweetsi Masisi are fake politicians who are just practicing populist politics to feed their egos,” he said.
Former Botswana Democratic Party (BDP) parliamentary hopeful, Lawrence Ookeditse has rejected the idea of taking up a crucial role in the Botswana Patriotic Front (BPF) Central Committee following his arrival in the party this week. According to sources close to development, BPF power brokers are coaxing Ookeditse to take up the secretary general position, left vacant by death of Roseline Panzirah-Matshome in November 2020.
Ookeditse’s arrival at BPF is projected to cause conflicts, as some believe they are being overlooked, in favour of a new arrival. The former ruling party strategist has however ruled out the possibility of serving in the party central committee as secretary general, and committed that he will turn down the overture if availed to him by party leadership.
Ookeditse, nevertheless, has indicated that if offered another opportunity to serve in a different capacity, he will gladly accept. “I still need to learn the party, how it functions and all its structures; I must be guided, but given any responsibility I will serve the party as long as it is not the SG position.”
“I joined the BPF with a clear conscious, to further advance my voice and the interests of the constituents of Nata/Gweta which I believe the BDP is no longer capable to execute.” Ookeditse speaks of abject poverty in his constituency and prevalent unemployment among the youth, issues he hopes his new home will prioritise.
He dismissed further allegations that he resigned from the BDP because he was not rewarded for his efforts towards the 2019 general elections. After losing in the BDP primaries in 2018, Ookeditse said, he was offered a job in government but declined to take the post due to his political ambitions. Ookeditse stated that he rejected the offer because, working for government clashed with his political journey.
He insists there are many activists who are more deserving than him; he could have chosen to take up the opportunity that was before him but his conscious for the entire populace’s wellbeing held him back. Ookeditse said there many people in the party who also contributed towards party success, asserting that he only left the BDP because he was concerned about the greater good of the majority not individualism purposes.
According to observers, Ookeditse has been enticed by the prospects of contesting Nata/Gweta constituency in the 2024 general election, following the party’s impressive performance in the last general elections. Nata/Gweta which is a traditional BDP stronghold saw its numbers shrinking to a margin of 1568. BDP represented by Polson Majaga garnered 4754, while BPF which had fielded Joe Linga received 3186 with UDC coming a distant with 1442 votes.
There are reports that Linga will pave way for Ookeditse to contest the constituency in 2024 and the latter is upbeat about the prospects of being elected to parliament. Despite Ookeditse dismissing reports that he is eying the secretary general position, insiders argue that the position will be availed to him nevertheless.
Alternative favourite for the position is Vuyo Notha who is the party Deputy Secretary General. Notha has since assumed duties of the secretariat office on the interim basis. BPF politburo is expected to meet on 25th of January 2020, where the vacancy will be filled.
Botswana Democratic Party (BDP) big wigs have decided to cancel a retreat with the party legislators this weekend owing to increasing numbers of Covid-19 cases. The meeting was billed for this weekend at a place that was to be confirmed, however a communique from the party this past Tuesday reversed the highly anticipated meeting.
“We received a communication this week that the meeting will not go as planned because of rapid spread of Covid-19,” one member of the party Central Committee confirmed to this publication. The gathering was to follow the first of its kind held late last year at party Treasurer Satar Dada’s place.