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Is it CMB vs BPOPF or CMB vs Molefe?

MONEEDI SAMEOSI

Being a Principal Officer for a pension fund may sound like a very simple role of just running the day to day activities of a Fund, but the BPOPF/CMB saga has just proven that it takes a whole lot more than meets the eye. And the person to find out the hard way is none other than the Chief Executive and Principal Officer of the Public Fund, Boitumelo Molefe.

The CEO and Principal Officer of BPOPF has in the past months gotten herself into a brawl with CMB partners after she spearheaded the abrupt termination of the contract with the private equity firm without much reasonable cause. This was also against counsel by the CMB Partners that should the Pension Fund terminate contract they risk losing more than half the funds invested as the private equity shares invested in were at their infant stages and most of them had already been converted into liabilities.

Ms Molefe however did not heed the advice and proceeded with her termination process which resulted in the Fund losing about P400 million in the process and only being able to recover P50 million. When reality hit home she cried foul to the Regulator (NBFIRA) whom in turn allowed itself to be drawn into the contractual war between the parties and took CMB to court. The Regulator however, lost big with costs.

On the ruling of the case, the presiding Justice Motumise said NBFIRA failed to back its actions with evidence but rather acted irrationally, and that its moves were drastic with far reaching implications to CMB, its Directors and Shareholders. The Judge proceeded to state that as a responsible Regulator NBFIRA should account for its actions without including the inappropriateness of allowing a regulated entity (BPOPF) to exercise the Regulator’s powers against another regulated entity (CMB). The Judge advised the parties to go for arbitration as the only amicable thing to do. NBFIRA has since appealed this decision.

These events have thus far raised a lot of questions as to why the current Board of Trustees was unable to find solution to the matter and most experts in the field attribute the events to a misplaced sense of duty and interest; but mostly due to the lack of relevant expertise by the Board to deal with dispute matters. This has placed Boitumelo Molefe under scrutiny, with many stating that her actions may have caused the Fund severe losses.

As per the profile displayed on the BPOPF website the Principal Officer is said to have been the Group
Supply Chain Manager for Debswana and briefly acted as the Pension Fund Principal Officer for a period just before 2005. The profile states that she was pivotal in the implementation of a somewhat new investment strategy for the Debswana Pension Fund, she mainly acted as the administration overseer, liaising with Alexander Forbes (the then administrator) on payment of claims and similar actions.

It is expected that her experience from DPF is being utilised currently on the BPOPF. But currently there has also been several reports by Members of the BPOPF that their claims remain unpaid for periods of up to a year without much explanation; something which rarely happened when the Fund was under the administration of Alexander Forbes.

A comparison has also shown that under the administration of the former administrator (Alexander Forbes), the Fund used to pay up to P200 million or more in claims, monthly; a number which has significantly reduced to about P2 million or less since Ms Molefe took over. Close associates state that she seems to be more concerned and preoccupied with the Fund’s investments and neglecting the primary role of her position to ensure an efficient administration of the Fund.

Members Annual Benefit Statements have also been outstanding for almost a year already and there is no reasonable communication to the Members to clarify the delay. Currently not a single Member in the Fund knows how much their savings stand at which is a very bad disappointment. Experts in the field have stated that the Principal Officer should seek assistance from her Actuaries and declare an interest rate without having to wait on her current dispute with CMB as it is not definite when the dispute will be resolved. It is unfair for Members benefits to be held at ransom over the Board’s mistakes. If at all a positive outcome comes out of the dispute she can still augment the new returns into the Member’s benefits and recalculate their account balances.

Ms Molefe was appointed CEO and Principal Officer (PO) of BPOPF in 2015. Her role requires that a PO must never be influenced or encouraged to overstep his/her mandate as caretaker of the Fund. This is a privileged position and Principal Officer decisions can have influence and consequence all the way down the value chain, and over a long period of time. The ultimate objective is to make good returns for Members at a reasonable cost, not advancing personal or political objectives without care of the savers – which are the Members.

Unfortunately it has been evident that due to the disagreements between the Principal Officer and the previous Chairman of the Fund, Carter Morupisi, every action taken by Ms Molefe was intended to frustrate her counterpart resulting in a significant amount of Members’ Funds being lost.

Other Board Members have alluded to the fact that Ms Molefe has been acting as judge jury and executioner as to how and where the Fund assets should be invested despite the fact that she does not possess the expertise of investment management. She seems to have also side-lined her investment management department, claims are that she no longer takes counsel from them and has since hired a Strategy Manager, Mr Thabo Matthews, who seems to be her current right hand man. The ousting of Carter Morupisi as Chairperson has some experts in the field also alluding to the fact that he was probably the only person who could stand against Boitumelo’s vigorous management style hence the relentlessness by the PO to remove him.

We can only hope that the alleged external influence on the PO is non-existent as service providers sometimes unduly influence POs and Chairpersons to make decisions that are not ideal for the Fund as they take advantage of the lack of experience by the Board. On resolving the BPOPF/CMB saga experts in the field state that “Any skilled fund manager would know that among other things, the significance of arbitration is that a dispute between parties normally gets resolved much sooner, with possibly a lot better results than through the courts, especially a sensitive issue that involves public funds.
 

Arbitration also gets a lot less expensive for both parties involved. There is absolutely no reason why the BPOPF should not humble themselves for the sake of its Members and seek better returns from CMB”. Unfortunately, ties may have been severed irrevocably between the parties to allow for peaceful arbitration and result.

In the 13 years before 2014, the BPOPF was one the most stable, well run institutions which saw stellar growth of its fund assets from a mere P1 billion to over P40 billion in that period. During this period pensioners saw on average, annual returns of about 15% or more and everyone was happy and had confidence in the management of the pension fund.

For the better part of those 13 years, the Public Fund was under the management of Mr Ephraim Letebele who served as the Chief Executive Officer and Chairman of the Board of Trustees. In 2012 Mr Letebele as CEO and Chairperson of the Fund was invited to present at The Africa investor (Ai) CEO Investment Summit, where the BPOPF was recognised as one of the pioneers promoting responsible pension fund investment across Africa.

The Ai CEO Institutional Investment Summit is a unique CEO investor-issuer, invitation-only capital market leaders’ platform, for global institutional investors and sovereign wealth and pension fund investors; to originate and intermediate capital market transactions in Africa. The former CEO was shortly afterwards unceremoniously dismissed from the position and later sued and won against his former employer. The Fund however has since been struggling to find a well-rounded and capable CEO to manage it and the people to suffer the most as a result are its Members.

There has also been allegations of political interference at the centre of the appointment of CEOs of the Fund which has greatly compromised integrity of the institution. The position of Principal Officer for an enormous Fund like the BPOPF can be skilfully demanding and requires a well-rounded individual with ample knowledge and hands-on experience on pension fund administration, legislation, investment management and most importantly financial risk management and decision making; attributes that seems to be lacking on the analysis of the current status of the Fund including the disputes therein. Ms Molefe may have been handed a hard bone to chew on and things are not looking good for the Principal Officer.

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Opinions

Internal party-democracy under pressure

21st June 2022

British novelist, W. Somerset Maugham once opined: “If a nation values anything more than freedom, it will lose its freedom; and the irony of it is that if it is comfort or money that it values more, it will lose that too.”

The truism in these words cannot be underestimated, especially when contextualizing against the political developments in Botswana. We have become a nation that does not value democracy, yet nothing represent freedom more than democracy. In fact, we desire, and value winning power or clinging to power more than anything else, even if it harms the democratic credentials of our political institutions. This is happening across political parties — ruling and opposition.

As far as democracy is concerned, we are regressing. We are becoming worse-off than we were in the past. If not arrested, Botswana will lose its status as among few democratic nations in the Africa. Ironically, Botswana was the first country in Africa to embrace democracy, and has held elections every five years without fail since independence.

We were once viewed as the shining example of Africa. Those accolades are not worth it any more. Young democracies such as South Africa, with strong institutions, deserves to be exalted. Botswana has lost faith in democracy, and we will pay a price for it. It is a slippery slope to dictatorship, which will bring among other excess, assault on civil liberties and human rights violations.

Former President, Festus Mogae once stated that Botswana’s democracy will only become authentic, when a different party, other than the Botswana Democratic Party (BDP) wins elections, and when the President of such party is not from Serowe.

Although many may not publicly care to admit, Mogae’s assertion is true. BDP has over the years projected itself as a dyed-in-the-wool proponent of democracy, but the moment its stay in power became threatened and uncertain, it started behaving in a manner that is at variance with democratic values.  This has been happening over the years now, and the situation is getting worse by the day.

Recently, the BDP party leadership has been preaching compromise and consensus candidates for 2024 general elections. Essentially, the leadership has lost faith in the Bulela Ditswe dispensation, which has been used to selected party candidates for council and parliament since 2003. The leadership is discouraging democracy because they believe primary elections threaten party unity. It is a strange assertion indeed.

Bulela Ditswe was an enrichment of internal party democracy in the sense that it replaced the previous method of selection of candidates known as Committee of 18, in which a branch committee made of 18 people endorsed the representatives. While it is true that political contest can divide, the ruling party should be investing in political education and strengthening in its primary elections processes. Democracy does not come cheap or easy, but it is valuable.

Any unity that we desire so much at the expense of democracy is not true unity. Like W. Somerset Maugham said, democracy would be lost in the process, and ultimately, even the unity that was desired would eventually be lost too. Any solution that sacrifice democracy would not bring any results in the long run, except misery.

We have seen that also in opposition ranks. The Umbrella for Democratic Change (UDC) recently indicated that its incumbent Members of Parliament (MPs) should not be challenged for their seats. While BDP is sacrificing democracy to stay in power, UDC is sacrificing democracy to win power. It is a scary reality given the fact that both parties – ruling and opposition — have embraced this position and believe democracy is the hindrance to their political ambitions.

These current reality points to one thing; our political parties have lost faith in democracy. They desire power more than, the purpose of power itself. It is also a crisis of leadership across the political divide, where we have seen dissenting views being met with persecution. We have seen perverting of political process endorsed by those in echelons of power to manipulate political outcomes in their favour.

Democracy should not be optional, it should be mandatory. Any leader proposing curtailing of democracy should be viewed with suspicion, and his adventures should be rejected before it is too late. Members of political parties, as subscribers of democracy, should collectively rise to the occasion to save their democracy from self-interest that is becoming prevalent among Botswana political parties.

The so-called compromise candidates, only benefits the leadership because it creates comforts for them. But for members, and for the nation, it is causing damage by reversing the gains that have been made over the years. We should reject leaders who only preach democracy in word, but are hesitant to practice it.

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Opinions

The Big Deal About Piracy

21st June 2022
piracy

Piracy of all kinds continues to have a massive impact on the global creative industry and the economies of the countries where it thrives.

One of the biggest misconceptions around piracy is that an individual consumer’s piracy activities, especially in a market the size of Botswana’s, is only a drop in the pool of potential losses to the different sectors of the economy piracy affects.

When someone sitting in Gaborone, Botswana logs onto an illegal site to download King Richard online, they don’t imagine that their one download will do anything to the production house’s pocket or make a dent in the actors’ net worth. At best, the sensitivity towards this illegal pirating activity likely only exists when contemplating going about pirating a local musician’s music or a short film produced locally.

The ripple effects of piracy at whatever scale reach far beyond what the average consumer could ever imagine. Figures released by software security and media technology company, Irdeto, show that users in five major African territories made approximately 17,4 million total visits to the top 10 identified piracy sites on the internet.

The economic impact of this on the creative industry alone soars to between 40 and 97.1 billion dollars, according a 2022 Dataprot study. In addition, they estimate that “illegally streamed copyrighted content consumes 24% of global bandwidth”.

As Botswana’s creative industry remains relatively slight on the scale of comparison to industries such as Nollywood and Nilewood where the creative industry contributes a huge proportion to West and East Africa’s respective GDPs, that does not imply that piracy activities in Botswana do not have a similar impact on our economy and the ability of our creative industry to grow.

When individuals make decisions to illegally consume content via internet streaming sites they believe they are saving money for themselves in the name of enjoying content they desire to consume. Although this is a personal choice that remains the prerogative of the consumer, looking beyond the fact that streaming on illegal content sites is piracy, the ripple effect of this decision also has an endless trail of impact where funds which could be used to grow the local creative industry through increased consumption, and revenue which would otherwise be fed back into Botswana’s economy are being diverted.

“Why can’t our local creative industry grow?” “Why don’t we see more home-grown films and shows in Botswana?” are questions constantly posed by those who consume television content in Botswana. The answer to this lies largely in the fact that Botswana’s local content needs an audience in order for it to grow. It needs support from government and entities which are in a position to fund and help the industry scale greater heights.

Any organisational body willing to support and grow the local creative industry needs to exist and operate in an economy which can support its mandates. Content piracy is a cycle that can only be alleviated when consumers make wiser decisions around what they consume and how.

This goes beyond eradicating piracy activities in so far as television content is concerned. This extends to the importation and trade in counterfeit goods, resale of goods and services not intended for resale across the border, outside its jurisdiction, and more. All of these activities stunt the growth of an economy and make it nearly impossible for industries and sectors to propel themselves to places where they can positively impact society and reinvest into the country’s economy.

So what can be done to turn the tide here in Botswana in order to see our local production houses gain the momentum required to produce more, license more and expand their horizons? While those who enforce the law continue to work towards minimizing piracy activities, it’s imperative that as consumers we work to make their efforts easier by being mindful of how our individual actions play a role in preventing the success of our local creative networks and our economy’s growth.

Whether you are pirating a Hollywood Blockbuster, illegally streaming a popular Motswana artist’s music, or smuggling in an illegal decoder to view content restricted to South Africa only, your actions have an impact on how we as a nation will make our mark on the global landscape with local creative productions. Thembi Legwaila is Corporate Affairs Manager, MultiChoice Botswana

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Opinions

Our Strength is our Unity

18th March 2022
Craig-Cloud

Putin Chose War.  We Remain United with Ukraine.

U.S. Ambassador Craig L. Cloud

This is a dangerous moment for Europe and for freedom-loving people around the world.  By launching his brutal assault on the people of Ukraine, Vladimir Putin has also committed an assault on the principles that uphold global peace and democracy.  But the people of Ukraine are resilient.

They’ve had a democracy for decades, and their bravery is inspiring the world.  The United States, together with our Allies and partners across the globe, will continue to support the Ukrainian people as they defend their country.  By choosing to pay for a war instead of investing in the needs of Russians, Putin’s invasion of Ukraine will be a strategic failure for the Kremlin and ravage the future of the Russian people.

When the history of this era is written, it will show that Putin’s choice to launch an unprovoked, unjust, and premeditated attack left the West more unified and Russia exponentially weaker.

United in Our Response

This will not end well for Vladimir Putin.  Together, the United States and our Allies and partners are taking action to hold Russia accountable.  As a result of unprecedented global sanctions coordination, the United States, the United Kingdom, the European Union, Japan, and Canada have removed selected Russian banks from the SWIFT messaging system and imposed restrictive measures on the Russian Central Bank.

President Biden announced sweeping financial sanctions and stringent export controls that will damage Russia’s economy, financial system, and access to cutting-edge technology.  After Putin began his invasion, the ruble hit its weakest point in history, and the Russian stock market plunged.

Along with the United Kingdom and European Union, the United States imposed sanctions on the architects of this war, including Putin himself.

By moving in close coordination with a powerful coalition of Allies and partners representing more than half of the global economy, we have magnified the impact of our actions to impose maximum costs on Putin and his regime.  In response to Putin’s war of choice, we will limit Russia’s ability to do business in U.S. dollars.

We will stunt Russia’s ability to finance and grow its military.  We will impair Russia’s ability to compete in the global economy.  And we are prepared to do more.

In addition to economic penalties, this week President Biden authorized an additional $1 billion over the $350 million of security assistance he recently approved, and a $650 million in 2021, to immediately help Ukraine defend itself, bringing America’s total security assistance to Ukraine over the past year to $2 billion.

We also stand ready to defend our NATO Allies.  President Biden has coordinated with Allied governments to position thousands of additional forces in Germany and Poland as part of our commitment to NATO’s collective defense.

He authorized the deployment of ground and air forces already stationed in Europe to NATO’s eastern and southeastern flanks:  Estonia, Latvia, Lithuania, Poland, and Romania.  Our Allies have also added their own forces and capabilities to ensure our collective defense.  There should be no doubt about the readiness of the greatest military Alliance in the history of the world:  NATO is more united than ever.

The United States has also coordinated with major oil-producing and consuming countries to underscore our common interest in securing global energy supplies.  We are working with energy companies to surge their capacity to supply energy to the market, particularly as prices increase.

Putin’s Unprovoked and Premeditated War

This was an attack that Vladimir Putin has planned for a long time.  He methodically moved more than 150,000 troops and military equipment to Ukraine’s border.  He moved blood supplies into position and built field hospitals, demonstrating his intentions all along.

He rejected every good-faith effort by the United States and our Allies and partners to address his fabricated security concerns and to avoid needless conflict and human suffering by engaging in diplomacy and dialogue.

Putin executed his playbook exactly as we had warned he would do.  We saw Russia’s proxies increase their shelling in the Donbas.  We saw the Russian government launch cyber-operations against Ukraine.  We saw staged political theater in Moscow and heard outlandish and baseless claims made about Ukraine in an attempt to justify Russia’s aggression.

Russia continues to justify its military aggression by falsely claiming the need to stop “genocide” in Ukraine – despite there being no evidence that genocide was occurring there.  We saw Russia use these tactics before when they invaded Ukraine in 2014 and Georgia in 2008.

And then, at almost the very same moment the United Nations Security Council was meeting to stand up for Ukraine’s sovereignty and forestall disaster, Putin launched his invasion in violation of international law.  Missiles began to rain down, striking historic cities across Ukraine.  Then came air raids, columns of tanks, and battalions of troops, all riding a renewed wave of disinformation and outright lies.

We have been transparent with the world.  We declassified our intelligence about Russia’s plans so there could be no confusion and no cover up.  Putin is the aggressor.  Putin chose this war.  And now his people will bear the consequences of his decision to invest in war rather than in them.

Transatlantic Unity and Resolve Stronger Than Ever

Putin’s goal of dividing the West has failed.  In the face of one of the most significant challenges to European security and democratic ideals since World War II, the United States and our Allies and partners have joined together in solidarity.  We have united, coordinating intensively to engage as one with Russia and Ukraine, provided assistance to Ukraine, developed a broad response, and reaffirmed our commitment to NATO.

Putin has failed to divide us.  Putin has failed to undermine our shared belief in the fundamental right of sovereign nations to choose their destiny and their allies.  And Putin will fail to erase the proud nation of Ukraine.

The next few days, weeks, and months will be incredibly difficult for the people of Ukraine.  Putin has unleashed great suffering on them.  But the Ukrainian people have known 30 years of independence, and they have repeatedly shown they will not tolerate anyone who tries to take their country backwards.

The world is watching this conflict closely, and if Russian forces commit atrocities, we will explore all international mechanisms that could be used to bring those responsible – whether members of the military or their civilian leadership – to account.

Putin’s aggression against Ukraine will cost Russia profoundly, both economically and strategically.  The Russian people deserve better from their government than the immense cost to their future that this invasion has precipitated.

Liberty, democracy, and human dignity are forces far more powerful than fear and oppression.  In the contest between democracy and autocracy, between sovereignty and subjugation, make no mistake:  Freedom will prevail.

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