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Gumas P50 million CEDA jackpot

United Refineries Botswana (URB), a company that has the directorship of Tati East Member of Parliament, Samson Guma Moyo and the Citizen Entrepreneurial Development Agency (CEDA) and three others is at the centre of a row between some CEDA’s Structured Finance Department employees and their seniors over questionable financing despite not meeting the basic requirements.

In the last seven years the company has been financed four times to the tune of close to P40 million but fit has not paid a dime towards the loan repayment. CEDA exposure with URB currently stands at P40 million and in November 2017, URB put forward a proposal requesting a P9 million loan from CEDA through which they claimed they wanted to refinance a short term facility as payment.

The CEDA department of Structured Financing found the request to be problematic at the word go because there was no board resolution supporting the application, there were no minutes to confirm a Board sitting; URB also failed to avail audited financial statements at the time, and when they were submitted they were not signed by their auditors – which raised eyebrows with those tasked with appraising the application by URB. Further to compound the URB request conundrum was the fact that the financials were only for the year 2015/16 but the company was first financed in 2012/13 hence the CEDA officers wanted a record of what has been happening in the company since being financed.

Things came to a head when the CEDA officials further discovered that the 40 percent shareholding of the parastatal in URB has been diluted to a paltry 18 percent – with the difference being transferred to Guma Moyo. “What concerned us the most was that there was no board resolution supplied to us to explain the shareholding dilution and the transfer of the same shares to Mr Moyo,” said a source within CEDA. He said it is very easy to track share transfer and or sale but in this instance there was “zero record”.

On asking for the subscription shareholding agreement as well as a valuation report that determined the value of the shares, and proof of payment from Guma Moyo to CEDA the officials also hit blanks. Those tasked with appraising the request by URB also got wind of the fact that the same company has financial obligations with Botswana Development Corporation (BDC) where they secured P15 million and P25 million from First National Bank Botswana who were also demanding their monies from URB. “At the time we were doing this appraisal URB was technically insolvent,” he said.

“Our view was that you can’t continue to throw money into a company that is technically insolvent. URB had also never serviced any loan that they took with us,” said our source. On the 23rd of November 2017, upon realizing that their request was not being fast tracked Guma Moyo is said to have shown up at CEDA offices where he interacted with the Head of Department – Structured Financing, James Moribame “to talk about URB request”.

In subsequent days the CEDA officers were under pressure and they approved the request on condition that URB supplies a board resolution, minutes of the board meeting, signed audited financials among other things. These demands were an impossible undertaking on the part of URB hence a difference officer was then assigned to look into their request. The appraisal was submitted on the 15th of December 2017 and was acceded to by management after one of the Structured Finance staff members, who has allegedly been dismissed put a disclaimer to the appraisal.

In her original assessment the said staff member is said to have highlighted risks faced by URB and possible mitigation measures. The Department of Structured Finance was of the view that it should get someone or a firm to manage the money on behalf of URB. Currently the company is failing to service its debts despite millions of Pula pumped into the project. Scores of its employees have not been paid in the last eleven months or so. On the other hand BDC is suing the company for failure to settle a loan of P11 million.

THE PROJECT

At the inception of the project, P40,7m was successfully raised which was intended to finance the scope of the project in full. However, the business experienced cost overruns due to the following challenging factors Depreciation of the Pula by over 37% from the inception of the project as the cost of plant and equipment was in US Dollars; Unplanned material expenditures, namely excavation and civil works on the plant site, driven by the need to hire the earth moving equipment which has been resident on site since the project started. In addition there were material additions to the plant specifications.  

Subsequent delays in disbursements resulting in movement of prices at a rate similar to the depreciation of the currency to the dollar. Against these constraints, P25, 1m was raised from FNB; BWP 12.7m from CEDA to fund the gap that developed following these material changes. The above achieved a 98% completion of the factory. Over and above the contributions, subsequent contributions were made by the founding shareholders to meet the funding requirements of the business via shareholder loans and capital calls that CEDA did not participate as indicated below as follows:

One of the original promoters of the project who spoke to Weekend Post this week Mr Tiedze Chapi explained that the company was formed by Guma and Tibe back in 2010/11. He said the two approached him and asked him to avail his plot as surety so that they could access funds to kickstart the project. He was convinced that he will become part of the company with a 40 percent shareholding while Guma was to hold 40 percent and Tibe was to own 20 percent of the business.

According to Chapi the two availed documents which had his name on  them to demonstrate that indeed he was a shareholder and they went on to ask for P11 million from BDC. Although BDC approved their request it was on the condition that they produce proof that they have assets that match that value. Unfortunately Chapi’s land valued less (P608 000) and still with infrastructure on it only went up to P4.3 million way less than the P11 million required hence BDC could not release the whole amount.

Chapi shared that the promoters then went to CEDA where they were given the P11 million. At this point Chapi was not happy with the whole operation and he threatened to pull out only to be intimidated. “I wanted to pull out because I was not sure if I am a shareholder in this company.” Chapi said at this point CEDA came into the picture and injected P7.33 million and a shareholders agreement was prepared by Armstrongs Attorneys. 

CEDA then paid another P7.33 million as debenture and the project took off. “My concern is that the money that was injected by the money funding institutions was not traceable in most cases. BDC put in money, it finished, CEDA put in money, it finished and FNBB put in money and it finished, CEDA came back to inject money and it finished and I hear the company is back at CEDA asking for more funds. We have not been audited and I am concerned that my name is in this project and public funds are being used without due process,” said Chapi. Chapi further stated that CEDA has guaranteed a loan of P9.5 million acquired by URB from FNBB at 100%. He stated that BDC has issued a letter of demand to URB and they want their money back.

“I have tried to seek legal advice on the matter and I cannot take it any further because the legal costs are prohibitive on my side. As for BDC, they are suing in the basis of an agreement that I did not sign as a one of the parties and I do not think they will succeed on my part. At some point I was kicked out of the Board and I was being threatened with political influence but I did not budge,” continued Chapi. According to Chapi, he has asked for a forensic audit of the business, “to my surprise one of the firms that was engaged to prepare the report put a disclaimer that it did not meet the required standards but URB still paid P250 000 for it.

Chapi is concerned that employees at the cooking oil plant have been going for up to eleven months without pay. “Some are at seven months without payment,” he added. He added: “Another thing that concerns me is the dilution of shareholding, something that contravenes the shareholders agreement. He said CEDA’s share has dropped from 40% to 18%; his from 12% to 7%; while Guma’s has picked from 16% to 53%.

EFFORTS TO CONTACT KEY PLAYERS

When reached by this publication, Mmoloki Tibe , who is also a shareholder, to inquire about Unified Refineries,  declined to discuss the  affairs of his company because its “a private entity.” When this publication pressed forward with the matter, putting it to him that, Unified Refineries’ dealings with CEDA maybe of public interest since CEDA is public enterprise, Tibe remorsefully agreed to share more light on the matter with this publication at later time.

His phone then later rang unattended and he could not reply inquiries sent through SMS. Dr Alfred Tsheboeng, Chairperson of the CEDA Board’s mobile phone rang unanswered the entire day, while Cynthia Sebonego, Secretary of the Board referred this publication to CEDA communications chief, Anno Tshipa. WeekendPost team managed to get hold of Tshipa but she was unable to respond to this publication’s inquiry. Weekend Post has promised to give her a right of reply next week. Meanwhile Guma Moyo’s mobile were unreachable because he was said to be in South Africa.

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Mascom, Letshego partner to deliver the MyZaka instant loan

31st March 2023

Letshego Botswana has recently partnered with Mascom to launch the Mascom MyZaka Instant Loan, a customer focused mobile money microloan service designed to provide customers with swift and convenient access to funds, driven by the underlying theme of “Ithuse” meaning “help yourself”

The loan is said to have been developed through a partnership driven by a deep customer focus with the key objectives of access, convenience and flexible financial support to customers of Letshego Botswana and Mascom through instantly disbursed short-term loans from P50 to P1 500 over the period of one month.

Letshego’s head of transformation, Molebogeng Malomo highlighted that working through agile methodologies, the partnership was able to develop and be released as what they call a Minimum Viable Product (MVP) or solution. “In keeping up with the spirit of design thinking and agile methodologies, the experiences and viewpoints of both Letshego Botswana and Mascom’s customers will be valuable to inform further enhancements to the Mascom MyZaka solution,” he said.

He further noted that the partnership and the development of the MyZaka instant loan will provide both the organizations to diversify their offering and customer base, while also offering the customer more choices and flexibility to initiate and be in control of their loan requests through the self-service mobile based application.

Mascom’s Chief Executive Officer, Dzene Makhwade-Seboni also alluded that their origins, priorities and initiatives are firmly rooted in Botswana and in the success of all Batswana, and that their strategy and intent is supported by embracing innovative problem-solving.

“The speed with which Letshego has grown over the years gives us confidence that we have partnered with the right service provider. Their expertise and most of all, innovation, a value we both share, will be beneficial to MyZaka Mobile Money for growth and for the convenience of our subscribers,” she concluded.

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DCEC granted warrant to arrest Khama twins

29th March 2023

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

29th March 2023

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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