Botswana Public Officers Pension Fund (BPOPF) has called for punitive actions to be taken against Capital Management Botswana (CMB) Chief Executive Officer (CEO) Rapula Okaile.  

BPOPF is the appellant in a case where it, together with Non-Bank Financial Institution Regulatory Authority (NBFIRA) are appealing High Court Judge Justice Omphemetse Motumise’s ruling, handed down on 24 April 2018, in which he dismissed NBFIRA’s application to confirm the appointment of Peter Collins as Manager of CMB and did not confirm such appointment.

BPOPF in the case is the first appellant with Non-Bank Financial Institution Regulatory Authority (NBFIRA) being the second while on the other hand CMB is the first respondent, Bona Life the second and with the third being Okaile and Peter Collins is the fourth respondent. According to BPOPF as represented by Senior Counsels Advocates Panayiotis Stais and Stephen Vivian from South Africa, Okaile has been annoying and building up to self-aid in the case.

Stais stated in the appeal case court papers seen by WeekendPost that “BPOPF sought a punitive cost against Oakile. We submit that his conduct in this matter was vexatious and mounted to self-help.” The SA Advocate continued: “accordingly we submit that the appeal should be upheld with costs on the attorney and client scale, including the costs of two Counsels. The orders set in the notice of appeal.”

As such it is submitted in the appeal that the approach adopted by the court a quo in declining to confirm the appointment of Peter Collins, is central to the determination of the appeals outcome. In the highest court in the land, Justice Ian Kirby together with Singh Walia and Jacobus Brand are presiding over the appeal case.

Was BPOPF authorized to bring the counter-application?

Court papers indicate that both appellants (BPOPF and NBFIRA) appealed against the judgements for different reasons. In the counter application at the High Court, BPOPF sought an order placing CMB under statutory management. The order was sought in terms of section 46(1) of the Securities Act. “The court a quo dismissed the counter application on the basis that BPOPF did not have the written consent from NBFIRA that it required in terms of section 46(2) of the Securities Act.”  

Justice Motumise also held that the letters from NBFIRA did not effectively ratify the conduct of BPOPF.  Meanwhile Motumise also “granted the relief sought in a review application by CMB” and also “dismissed the conditional counter-application launched by Bona Life.”

The relationship between BPOPF and CMB

The appeal court papers also indicate that BOP is an en commandite partnership established in terms of the partnership agreement in November 2014. As at establishment CMB was the General partner of BOP, with a 1% partnership interest, and BPOPF was the only limited partner, with a 99% partnership interest. Moreover CMB was appointed by BOP as its fund manager.

Accordingly, “CMB was the face of BOP. CMB managed and controlled BOP. CMB carried on business on behalf of BOP. BPOPF was obliged to commit capital to BOP and honour capital calls made by CMB for further funds. A total of 477 million has been drawn down,” papers indicate.  

In the second half of 2017, the papers state that a dispute arose between CMB and BPOPF. In September 2017, BPOPF issued a call for further funds and BPOPF refused to honour the call because it contended that the call was invalid. “BPOPF issued a notice on 1 December 2017 in terms which it terminated CMB as General Partner (which resulted in CMB automatic termination as fund manager) for cause. It replaced CMB with another entity, Viltry (Pty) Ltd.”   

CMB then responded on 11 December 2017 by informing BPOPF that it had already removed BPOPF as limited partner on 28 November 2017 and disposed of BPOPF’s interest in BOP for 50 million. Court papers states: “BPOPF disputes this removal. It says that the call for funding was in breach of the partnership agreement.” It is understood that BPOPF explained to the court that it had set out the underlying basis for its complaint to NBFIRA in its 26 January 2018 letter.

“As the regulator of licensed entities such as CMB, part of NBFIRA’s role is to deal with complaints raised by regulated entities and affected parties,” papers highlight. They stated that “CMB has steadfastly refused to answer the logical question – to whom was the interest of BPOPF disposed and why did CMB only pay P50 million to BPOPF for this interest? Even if CMB was entitled to dispose of BPOPF’s interest in BOP (which is disputed), CMB was required to dispose of the partnership interest for a fair price to BPOPF.”

CMB, they further state that it was never subjected BOP to an independent valuation (as it was required and requested to do) and did not even attempt to explain the difference between its own valuation of BWP 447 million and the alleged on-sale for BWP 50 million and “accordingly there is currently an impasse.”

CMB contends that it has disposed of BPOPF’s partnership interest because of BPOPF’s failure to honour the invalid draw down notice. BPOPF disputes CMB’s right to do so and has removed CMB as General Partner and CMB disputes this and insists on its alleged right to continue acting as the General Partner.

CoA should uphold Motumise ruling, he did not err – Okaile

Meanwhile Michael Collins who is representing CMB and Okaile has requested the CoA to appeal Motumise’s decision insisting that he did not err. He submitted that “the court a quo did not err at all” and that “CMB is entitled to an order dismissing both NBFIRA and BPOPF appeals with costs.”
Judgement will be delivered next week.