BPOPF pushes arbitration in P400 million trailblazer
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.”
News
Nigerians, Zimbabweans apply for Chema Chema Fund
Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.
According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.
“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’
Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.
One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.
Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”
News
Merck Foundation and African First Ladies mark World Health Day 2024
Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.
I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.
As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.
Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.
News
Interpol fugitive escapes from Botswana
John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.
Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.
The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.
In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.
At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.
Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.
When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.