BPOPF pushes arbitration in P400 million trailblazer
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Capital Management Botswana (CMB) is playing hardball with Botswana Public Officers Pension Fund (BPOPF) following the High Court’s rejection of an application by Non-Bank Financial Regulatory Authority (NBFIRA) through which it had wanted to appoint a Statutory manager (Peter Collins) over CMB.
The Partnership Agreement between BPOPF and CMB gives the latter a trailblazer status because they are likely to be the first company to be get over P400 million from a ‘partner’ with little sweat. BPOPF had issued an Arbitration Notice in a bid to recover over P400 million whose whereabouts have not been disclosed and it belongs to the 150 000 pensioners of the Botswana public service.
On 14 May 2018 BPOF lawyers wrote to the Botswana Institute of Arbitrators (BIA) for intervention after CMB failed to honour the Arbitration Notice within the recognized 20 days. CMB has instead made hard demands on the part of BPOPF. “The 20 day deadline has passed. Despite BPOPF having engaged with CMB and with the statutory manager who was appointed to CMB, CMB has, to date, neither accepted the arbitrators proposed in the Arbitration Notice, nor has its suggested any alternative arbitrators.
CMB has, in court papers, suggested that an arbitration should be held in the United Kingdom, but it seems to us that the terms of the Partnership Agreement are clear. CMB have not raised any formal dispute in relation to the forum of arbitration and this would, in any event, be a dispute as defined in the Partnership Agreement which would need to be dealt with, perhaps as a preliminary issue, at an arbitration in Botswana. In any event, the Partnership Agreement does not require that the BIA be instructed by both parties but merely requires that the BIA appoint the Arbitrators if the parties have not agreed within 20days,” wrote BPOPF lawyers, Werksman Attorneys.
BPOPF has asked the Botswana Institute of Arbitrators to appoint three arbitrators in accordance with the terms of the Partnership Agreement. They want the arbitrators to be Senior Counsels to preside over the arbitration in respect of the disputes declared. “The subject of the arbitration is a matter of national importance notably given that the BPOPF represents more than 150 000 pensioners of Botswana public service and that more than P400 million is at risk. It is urgent that the Disputes be resolved efficiently.
We therefore look forward to your prompt response,” further stated the BPOPF lawyers. BPOPF had suggested the names of Mr Virgil Vergeer; Mr Kwadwo Osei Ofei; Ms Pepsi Sibanda; and Mr Sifelani Thapelo as possible arbitrators. BPOPF Acting Chief Executive Officer, Moemedi Malindah had indicated that any three of the listed four could be selected to act as arbitrators.
The Partnership Agreement states that “Any dispute between any of the Parties arising in connection with this Agreement or its subject matter shall be submitted to an finally resolved by arbitration in accordance with arbitration rules of Botswana Institute of Arbitrators (BIA)…”
BPOPF entered into a Partnership Agreement with Capital Management Botswana (CMB) Limited in November 2014. CMB was a general partner of the Botswana Opportunity Partnership (the ‘Fund’) for the period commencing on its formation of the Fund and terminating on 1 December 2017 by BPOPF who are the sole Limited Partner of the Fund.
The Disputes which are to be taken for arbitration arise from the fact that CMB, which has been terminated as General Partner (GP) is yet to transfer the Fund Assets held by it in its own name to the Fund hence BPOPF wants to ensure that all of the Fund Assets are registered in the name of the Fund. Furthermore BPOPF wants CMB to handover to the newly appointed General Partner, Viltry (Proprietary) Limited.
BPOPF is also demanding all documentation relating to the Fund and to each of the Fund’s Investments that are in its possession and which ought to be within its possession in terms of the Partnership Agreement both as its erstwhile General Partner and erstwhile Manager. In addition, BPOPF demands the details of each service provider to the Fund as well as each service provider to CMB as the erstwhile General Partner and the erstwhile Fund Manager in relation to the Fund, including the name of the service provider, the contact details of the service provider, a list of deliverables pending issue from each service provider (if any)), the service level agreement concluded with that service provider and the correspondences with each service provider.
The Pension Fund also procures that any persons nominated and appointed by CMB to represent the Fund on the Board of any Portfolio company pursuant to the Partnership Agreement resign from such office with effect from the date of the Removal Notice and authorize General Partner to nominate and appoint replacement with effect from the date of Removal Notice.
“On 18 December 2017, BPOPF wrote to CMB demanding confirmation of, amongst other things, the identity and contact details of the person or entity to whom BPOPF’s interest in the Fund had purportedly been sold and the purchase price. As at date of this notice, CMB has not complied with these demands. The replacement GP requires the requested information in order to discharge its fiduciary obligations to the Fund, and it is accordingly, in terms of common law and under the Partnership Agreement, entitled to the information and documentation demanded in the Removal Notice as well as the letter dated 18 December 2017,” further writes Moemedi Malindah, Acting BPOPF CEO.
WHY BPOPF SHOULD BEG FOR ARBITRATION
The BPOPF invested the sum of P477 million in the Botswana Opportunity Partnership (BOP) to be managed by CMB in terms of the BOP agreement between the two. CMB then disposed of the investment and only paid P50 million to BPOPF. The BPOPF has tried to tell the court that a balance of P400 million was at stake. But Judge in the NBFIRA case, Justice Motumise has argued that “the question before me is not the recovery of the P400 million or to secure it, wherever it is and thus to protect it from loss. In fact, I have not been told where it is so that I can secure it from such loss. What I am called upon to do, in these proceedings is to decide whether to confirm the appointment of a statutory manager over CMB.”
The money at stake was an investment made in terms of the BOP Agreement which states that: “The General Partner shall be entitled, and is hereby irrevocably authorized by defaulting Limited Partner, to dispose of the Defaulting Limited Partner’s interest in Botswana Opportunity Partnership to one or more third parties at such price and on such terms and conditions as the General Partner, in its sole and absolute discretion, deems fit, provided that the General Partner first offers such interest, at the same price and on the same terms, first to the non-Defaulting Limited Partner pro rata to their respective Capital Commitments and then (if any remains) to the non-defaulting Fund LPs of any Parallel Fund pro rata to their respective capital commitments to such.”
The Agreement further reads: Except as provided in clause 26 or any loss suffered due to any grossly negligent, reckless, fraudulent or willful misconduct activities by the General Partner, neither the General Partner nor the any of its affiliates shall be liable for the return of the Capital Commitments of any Partner, and such return shall be made solely from available Fund Assets, if any, and each Limited Partner hereby waives any and all claims it may have against the General Partner or any Affiliate thereof in this regard.”
It is evident that BPOPF authorized the disposal of its investment or interest under the agreement and the Agreement itself prescribes that resolution of all matters and or claims is through Arbitration. Some BPOPF insiders question the decision to sign such an Agreement and are wondering where the Board and the management were when such a deal slipped through!
WHY THE P400 million is GONE
Except as provided in clause 26 or any loss suffered due to any grossly negligent, reckless, fraudulent or willful misconduct activities by the General Partner, neither the General Partner nor the any of its affiliates shall be liable for the return of the Capital Commitments of any Partner, and such return shall be made solely from available Fund Assets, if any, and each Limited Partner hereby waives any and all claims it may have against the General Partner or any Affiliate thereof in this regard.”
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DCEC granted warrant to arrest Khama twins
The Directorate on Corruption and Economic Crime (DCEC) has been granted permission to apprehend the former Minister of Environment, Wildlife and Tourism, Tshekedi Khama, and his twin brother Anthony Khama.
Information gathered by this publication suggests that the DCEC is actively searching for the Khama brothers, this is in connection with events that transpired whilst Tshekedi was Minister of Environment. The duo is currently in exile in South Africa together with their elder brother, and former President Lt Gen Ian Khama.
Approximately two weeks ago, the corruption-busting agency discreetly filed for an arrest warrant that was approved by the Broadhurst Magistrate Court for the two to be taken into custody, according to a highly placed source within the government enclave.
DCEC is also said to have filed an affidavit signed by a high-ranking officer known to this publication. Reports indicate that after being presented with details of the case, the Broadhurst magistrate issued the agency an arrest warrant.
It is also believed that the agency has been conducting extensive investigations into the supposed suspects for quite some time. Furthermore, Weekend Post has it on good word that the DCEC has been looking for methods to summon the two for questioning but has been unsuccessful.
According to unconfirmed reports, DCEC met with attorney Victor Ramalepa, who refused to accept the summons, saying that he is not their attorney. Furthermore, it is believed that DCEC has enlisted the assistance of the Botswana Police Service (BPS) in flagging the suspects’ names in the International Criminal Police Organisation INTERPOL.
Responding to WeekendPost enquiries, DCEC spokesperson Lentswe Motshoganetsi said, “I am not in good position to confirm or deny the allegation,” adding that such allegations may fall within the operational purview of the DCEC.
When contacted for comment, Ramalepa briefly stated that he is unaware of the purported arrest warrant. “I know nothing about the warrant and I haven’t been served with anything,” he said.
Meanwhile, former president Lt Gen Ian Khama recently issued a statement stating that DIS is intensifying the harassment and intimidation of him, family, friends and office employees.
“It is reprehensible for state officials and agencies to abuse government resources to terrorise their own citizens for personal gain,” said the former president in a statement.
He also stated that his brother TK’s staff and security were ordered to falsely implicate him. “Their desperate tactics will never work, it only serves to motivate me more to pursue regime change and free Botswana from tyranny,” he said
This comes after the corruption busting agency wants to interview the alleged suspects as they are still hiding in South Africa since last year.
Despite the hostility between government and Khama family going unabated, last month, Masisi extended an olive branch to Khama in political rally, indicating that he hopes the two of them settle their differences, of which the former responded by welcoming the gesture.
Khama further said his brother, Tshekedi, will facilitate the reconciliation of his behalf. Many have indicated that Masisi did not say what he said in good faith, and was only scoring political brownies since he was in Khama’s territory in Shoshong.
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DCEC’s Tshepo Pilane still has his mojo
Tshepo Pilane silenced his critics after being named the head of the Directorate on Corruption and Economic Crime (DCEC) in May of last year and served his opponents humble pie. Many believed he would only last for a month, but almost a year later, he is still standing.
Pilane, a trained soldier whose appointment surprised both the general public and some officers within the DCEC walls, has never glanced back in his duty to steer the DCEC ship forward.
It is alleged that immediately after his appointment the man embarked on a nation-wide trip touring the DCEC offices across the country in order to confirm and reaffirm the DCEC’s mandate. Sources from inside the DCEC claim that Pilane won the hearts of many DCEC employees due to his humility and plain message; “people at the top of the DCEC will come and go but the mandate of the DCEC remains relevant and unchanged.”
Pilane was appointed the Acting DCEC Director General at a time when the organisation was undergoing turbulence through court proceedings in which the suspended Director General Tymon Katlholo had interdicted the Directorate of Intelligence and Security (DIS) from accessing the DCEC premises. At the time, the DIS had raided the DCEC offices in the absence of Katlholo claiming to be looking for high profile corruption cases allegedly held by Katlholo.
At the time Pilane was Head of the DCEC Intelligence Division holding the position of Senior Assistant Director General reporting directly to the Deputy Director General Operations Ms Priscilla Israel. Contrary to his detractors, Pilane who is a reserved and humble person by nature won the support and backing of many DCEC officers due to his unassuming nature.
In a recent questionnaire sent to the DCEC regarding Pilane’s term in office, the DCEC was resolute on its commitment towards the fight against corruption. When quizzed on allegations of rife corruption since he took over, Pilane through his Public Relations (PR) office stated that the corruption landscape in Botswana remains unchanged as the DCEC continues to receive reports on allegations of corruption with sectors such as procurement (tenders and supplies), Transport (licensing and certificates), and land (dubious allocation and collusion) still leading issues reported. This trend has been consistence in the DCEC database for more than 10 years.
When further quizzed on accusations that suggest that due to the infighting at the agency, particularly at the top management, Investigations of cases has dropped significantly the DCEC claimed ignorance to the matter, stating that they are not aware of any “infights” at the DCEC “at the top management”, further stating that, investigations of cases has increased significantly, contrary to the allegations raised. “The DCEC is currently seeking new ways of expediting the investigations in order to fast track its enforcement role,” said the DCEC Head of Public Relations Lentswe Motshoganetsi. He further stated that the DCEC is in pursuit of high profile cases involving money and assets valued over P900 million. Three companies are involved in the scandal and two cases have already been committed to court while on one, investigations are about to be completed.
When WeekendPost inquired about Pilane’s roadmap, the DCEC stated that in the past, anti-corruption interventions were reactive, particularly in dealing with national projects that involve large sums of money. It was further started that in most instances investigating such matters takes a long time and in most instances, the money looted form Government in never recovered. As a result, the DCEC has taken a deliberate stance to attach its officers from the Corruption Prevention Division to be part of the implementation of these projects before, during, and after implementation.
The DCEC cited the Economic Stimulus Programme which, although meant to grow the economy and uplift Batswana from poverty, yielded incidents of corruption and poor workmanship. To date, the DCEC is still grappling with cases as some projects were not done, or were completed with defects beyond repair. Currently the DCEC is involved at the Ministry of Education conducting project risk management in the Multiple Path Ways Program at Moeng College and Maun Senior School. This intervention will spread to other sectors of the economy as part of the DCEC’s corruption prevention strategy.
Of recent, the DCEC has been in the media for all the wrong reasons following leakage of high profile cases and allegations claiming that the executive management is at war with each other more particularly with some within the agency harbouring ambitions to dethrone Pilane from the Directorship.
Although the infighting was denied by Pilane’s Office, he acknowledged that leakage of information is a problem across Government and stated that it is a pain at the DCEC. He however stated that Staff has been cautioned against leakage of investigation information and that they have roped in the Botswana Police to assist in investigating incidents of leakage. He further stated that they have increased continuous vetting and lifestyle audits for DCEC employees in order to enforce discipline.
Pilane’s term comes to an end in May 2023 after serving the DCEC for a year on acting basis. It will be in the public interest to see who will be given the baton to continue the anti-corruption journey if Pilane’s contract is not renewed. The DCEC has seen arrival and departure of Director Generals having alternated the top seat five times in less than seven years.
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Botswana firms ICC support amid arrest warrant for Russian President
The Parliament is set to discuss proposed amendments to the laws related to the International Court Court (ICC). This development coincides with reports that the ICC has issued an arrest warrant for Russian President Vladimir Putin for his alleged role in the conflict in Ukraine.
It is not clear if this is a coincidence. For the fourth time, last year Botswana voted against Russia during the UN General Assembly’s condemnation of Russia’s attack on Ukraine.
The country’s continued support for the ICC is expected to irk other African countries that are still questioning the credibility of the ICC and those have also sworn alligence to Russia.
It has been reported that the Minister of Justice, Ronald Shamukuni, is expected to table the Bill regarding the amendments to the laws concerning the ICC in the Parliament soon.
The Bill seeks to criminalize various international crimes, including genocide, war crimes, and aggression. It also proposes to repeal and replace the 2017 Rome Statute of the ICC with amendments.
The latest Government Gazette indicated that the 2017 Act has some legal and constitutional implications. The proposed amendments seek to address these issues.Therefore, the Bill seeks to replace the 2017 Act with a new statute that will retain some of the provisions that do not conflict with Botswana’s Constitution.
The Bill aims to ensure that the obligations of Botswana as a State Party to the Rome Statute of the ICC do not conflict with the country’s Constitution.
The proposed Act will include addition of the crime of aggression which was not there in the 2017 Act. The proposed Act will remove clauses that conflict with Botswana’s Constitution such as article 17 of the Rome Statute of the ICC which provides that official capacity as Head of State shall in no case exempt a person from criminal responsibility under the ICC Statute.
The import of this provision (which the new law seeks to repeal) is that Botswana Courts will be constrained by section 41 of the Constitution to try a sitting President but the International Criminal Court will not be so constrained.
The proposed Act will also result in the amendment to the extradition Act which will provide for instances where Botswana is unable to extradite, for the Director of Public Prosecution (DPP) to instead prosecute on behalf of the foreign country (ICC) where it is determined that there is sufficient evidence to prosecute and sharing of suspected proceeds of crime and confiscated property with other countries.
“In this regard, the amendment to the Mutual Assistant in Criminal Matters Act empowers the DPP to enter into agreements for the reciprocal sharing of with a competent authority in a foreign country,” reads the note in part.
The Bill also includes a clause dealing with conspiracy which provides that a person who conspires in Botswana to commit an offence, in or outside the territory of Botswana, or who conspires outside Botswana to commit an offence in Botswana commits an offence and is liable to the same penalty as the penalty for the actual offence.
Other provisions of the Bill include those relating to superior orders not being a defence as well as the responsibilities of commanders and other supervisors. Furthermore, the Bill deals with issues such as jurisdiction which allows for proceedings to be instituted against a person under certain circumstances, where an act of constituting an offence under the Bill is committed by any person outside the territory of Botswana.
The Bill also provides that the limitations on certain criminal offences will not be applicable to the offences under the Bill. This means that the Prescriptions Act and other statutory limitations will not be applicable to the offences under the Bill. Other provisions of the Bill include the establishment of regulations and the powers of the Minister to make amendments to laws.
The latest developments involving the ICC have raised concerns about Botswana’s continued support for the court. Some of the countries that are critical of the court include Uganda and Kenya. They believe that the court only targets African countries for its alleged involvement in war crimes. In 2016, South Africa decided to withdraw from the ICC. South Africa was the second African nation to withdraw from the court after Burundi.
The decision by South Africa followed a controversy in 2015 when Sudan’s President Omar Al-Bashir was invited to the country despite an ICC warrant for his arrest. Yoweri Museveni, the Ugandan President, at that time commended South Africa for its decision to withdraw from the court.