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Mokaila snubs Jamali, Ram Air Botswana move

Two of Botswana’s most wealthy men, property-cum-media mogul, Sayeed Jamali and retail tycoon, Ramachandran Ottapathu are not prepared to give up on their attempt to own and operate the national airline, Air Botswana.

Fresh investigations suggest that the duo recently tried to use a roads construction meeting to arm-twist the transport minister into discussing the possibility of taking over the national airliner. Indications are that the duo is convinced it can turn around Air Botswana. Weekend Post is reliably informed that on 6 February 2018 the two businessmen tried to take advantage of a meeting called by Minister of Transport and Communication, Kitso Mokaila to discuss the construction tender of Segoditshane Bridge which was won by Jamali’s company, Universal Builders.

Ministry sources that were at the meeting were “shocked” to see Jamali accompanied by Ottapathu who is not party to the bridge construction tender. During the said meeting, Ottapathu attempted to make a presentation to Mokaila, trying to convince him how the two men can be suitable owners of Air Botswana. However, according to sources, Mokaila flatly refused discussing Air Botswana.

 “We called them (Jamali and Ottapathu) to talk about roads. They assumed we would talk about Air Botswana but we declined discussing the airline…we only talked about roads,” said a top official at the transport ministry. As if refusing to give billionaires Jamali and Ram audience to discuss possibility of their Air Botswana take over was not enough, high placed sources at the Government Enclave also revealed to this publication that Mokaila will not give the two an ear on Air Botswana as their initial bid failed. The source authoritatively confirmed that while government is still looking for “suitable investors,” Jamali and Ottapathu have never crossed minister Molaila’s mind as he is “now busy looking elsewhere for more suitable bidders to take over the airliner.”

“Their expression of interest (Jamali and Ottapathu) was not successful and it was over for them. Mokaila stated even in cabinet or intra-ministerial meetings that he is going to improve Air Botswana and make it viable and will not take pressure to talk to any of those whose bids failed. That is the reason why he is re-fleeting. He said we are going to look everywhere for suitable investors and Jamali or Ottapathu’s names were never mentioned,” said a highly placed source at Government Enclave.

Jamali and Ottapathu’s move to own Air Botswana started in February last year, a joint venture proposal through a company called LongLeaf and Weekend Post has seen an initial proposal which was received by the Deputy Permanent Secretary Isaac Moepeng. LongLeaf was among the 17 bidders who coveted ownership of Air Botswana subsequently submitting an Expression of Interest on 28 February 2017. Investigations have revealed that Jamali and Ottapathu made another bid last year September after Wilderness Holdings withdrew from the tender following its success through a Presidential Directive. President Ian Khama has indirect interest in Wilderness Holdings that was given Air Botswana and this caused a public uproar, forcing the tourism operator to withdraw its interest on the national airliner.

Initially LongLeaf wanted to hold 52 percent while government was to own the remaining 48 percent. However in the second bid Jamali and Ottapathu wanted 60 percent of the assets, tangible and intangible “including without limitation; the airline fleet, operation experiences, subject to any obligations contained in disclosed license agreements and all related intellectual property, the other fixed assets of Seller (Government of Botswana), any and all customer lists and the goodwill associated therewith, all free and clear of any security interests, mortgages or other encumbrances.” The second bid or proposal was received by Deputy Permanent Secretary Moepeng who the sources reveal that he “deliberately sat on the bid.”

 In the initial bid, Cemair were the favourites to take over Air Botswana according to sources, but Mokaila decided to play hardball as he did not want another controversy like the one which involved Wilderness Holdings. Mokaila would say his intuition was served right as currently 11 out of 12 Cemair planes are grounded by the South African Civil Aviation Authority (SACAA) over regulatory compliance concerns since 2 February 2018.

Incidentally, this grounding also affected the P3 million per month wet lease agreement which Air Botswana gets from Cemair to use its(Cemair) CRJ-100 jet to run the four times weekly Gaborone-Cape Town route. Air Botswana was forced to announce suspension of the Gaborone-Cape Town route on the eve of Valentine’s Day, a week after SACAA declared grounding Cemair planes.  As a temporary measure, all Cape Town ticketed passengers were being re-routed via Johannesburg at no extra cost “until a definite solution has been implemented.”

Latest reports from South Africa are that only one of the 12 planes, the domestically used Dash-8 Q400, has been lifted off the ground by SACAA while Air Botswana’s CRJ-100 and other ten Cemair owned airliners remain on the ground. Since last month, SACAA has to run inspections on the 12 Cemair planes concurrently and it is not known when the Gaborone-Cape Town route will be back on the skies, if at all it will pass inspection.

Sources close to development hinted that Jamali and Ottapathu wanted to capitalize on Cemair’s downfall or misfortune because their attempt to coax Mokaila into selling them Air Botswana came just four days after Cemair’s planes were grounded by SACAA. Sources said during the Segoditshane bridge construction meeting Ottapathu made a short presentation that he should take over the Gaborone-Cape Town route with his 30-seater jet.  According to a source, Ottapathu also said he can make Gaborone an international travel hub and introduce a direct flight from Germany to Gaborone.  Ottapathu has an estimated net-worth of P5 billion which includes his Choppies net-worth estimated to be P2 billion. Jamali on the other hand’s net-worth is estimated to be around P3 billion.

Meanwhile on Wednesday government announced intentions to refleet the national airliner by acquiring a newly manufactured ATR 72-600 turboprop aircraft-with dual-class capacity and more enhancement in the area of performance. A jet will also be added to substitute or add into Air Botswana’s aging fleet.

“Yes we are refleeting. The airline will be well placed to mitigate against the risks of losing its prime routes, which are presently operated by foreign competing airlines. The national airliner will be well-positioned to participate in the process of implementing the open skies policy, as advocated by the African Union,” said Mokaila.

In a brief interview with Weekend Post, Mokaila confirmed the meeting with Jamali and Ottapathu and that he declined talking about Air Botswana. He also said the privatization of Air Botswana is underway and they are looking for suitable investors. On the suspended Gaborone-Cape Town route due to Cemair’s grounding Mokaila reiterated his re-fleeting stance and said the new fleet will help in the future to mitigate against the risks of losing its prime routes like the currently suspended one.

Jamali did not want to be drawn into commenting about Air Botswana, saying his main job is being a builder. Jamali admitted that he was with Ottapathu when they tried to talk Mokaila into discussing Air Botswana but the minister declined. On the other hand Ottapathu denied ever discussing Air Botswana saying “we met the minister to discuss other things apart from Air Botswana.” Ottapathu did not state why he was party to meetings that discusses construction of bridges.

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13 AUGUST 2022 Publication

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DIS blasted for cruelty – UN report

26th July 2022
DIS BOSS: Magosi

Botswana has made improvements on preventing and ending arbitrary deprivation of liberty, but significant challenges remain in further developing and implementing a legal framework, the UN Working Group on Arbitrary Detention said at the end of a visit recently.

Head of the delegation, Elina Steinerte, appreciated the transparency of Botswana for opening her doors to them. Having had full and unimpeded access and visited 19 places of deprivation of liberty and confidentiality interviewing over 100 persons deprived of their liberty.

She mentioned “We commend Botswana for its openness in inviting the Working Group to conduct this visit which is the first visit of the Working Group to the Southern African region in over a decade. This is a further extension of the commitment to uphold international human rights obligations undertaken by Botswana through its ratification of international human rights treaties.”

Another good act Botswana has been praised for is the remission of sentences. Steinerte echoed that the Prisons Act grants remission of one third of the sentence to anyone who has been imprisoned for more than one month unless the person has been sentenced to life imprisonment or detained at the President’s Pleasure or if the remission would result in the discharge of any prisoner before serving a term of imprisonment of one month.

On the other side; The Group received testimonies about the police using excessive force, including beatings, electrocution, and suffocation of suspects to extract confessions. Of which when the suspects raised the matter with the magistrates, medical examinations would be ordered but often not carried out and the consideration of cases would proceed.

“The Group recall that any such treatment may amount to torture and ill-treatment absolutely prohibited in international law and also lead to arbitrary detention. Judicial authorities must ensure that the Government has met its obligation of demonstrating that confessions were given without coercion, including through any direct or indirect physical or undue psychological pressure. Judges should consider inadmissible any statement obtained through torture or ill-treatment and should order prompt and effective investigations into such allegations,” said Steinerte.

One of the group’s main concern was the DIS held suspects for over 48 hours for interviews. Established under the Intelligence and Security Service Act, the Directorate of Intelligence and Security (DIS) has powers to arrest with or without a warrant.

The group said the “DIS usually requests individuals to come in for an interview and has no powers to detain anyone beyond 48 hours; any overnight detention would take place in regular police stations.”

The Group was able to visit the DIS facilities in Sebele and received numerous testimonies from persons who have been taken there for interviewing, making it evident that individuals can be detained in the facility even if the detention does not last more than few hours.

Moreover, while arrest without a warrant is permissible only when there is a reasonable suspicion of a crime being committed, the evidence received indicates that arrests without a warrant are a rule rather than an exception, in contravention to article 9 of the Covenant.

Even short periods of detention constitute deprivation of liberty when a person is not free to leave at will and in all those instances when safeguards against arbitrary detention are violated, also such short periods may amount to arbitrary deprivation of liberty.

The group also learned of instances when persons were taken to DIS for interviewing without being given the possibility to notify their next of kin and that while individuals are allowed to consult their lawyers prior to being interviewed, lawyers are not allowed to be present during the interviews.

The UN Working Group on Arbitrary Detention mentioned they will continue engaging in the constructive dialogue with the Government of Botswana over the following months while they determine their final conclusions in relation to the country visit.

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Stan Chart halts civil servants property loan facility

26th July 2022
Stan-Chart

Standard Chartered Bank Botswana (SCBB) has informed the government that it will not be accepting new loan applications for the Government Employees Motor Vehicle and Residential Property Advance Scheme (GEMVAS and LAMVAS) facility.

This emerges in a correspondence between Acting Permanent Secretary in the Ministry of Finance Boniface Mphetlhe and some government departments. In a letter he wrote recently to government departments informing them of the decision, Mphetlhe indicated that the Ministry received a request from the Bank to consider reviewing GEMVAS and LAMVAS agreement.

He said: “In summary SCBB requested the following; Government should consider reviewing GEMVAS and LAMVAS interest rate from prime plus 0.5% to prime plus 2%.” The Bank indicated that the review should be both for existing GEMVAS and LAMVAS clients and potential customers going forward.

Mphetlhe said the Bank informed the Ministry that the current GEMVAS and LAMVAS interest rate structure results into them making losses, “as the cost of loa disbursements is higher that their end collections.”

He said it also requested that the loan tenure for the residential property loans to be increased from 20 to 25 years and the loan tenure for new motor vehicles loans to be increased from 60 months to 72 months.

Mphetlhe indicated that the Bank’s request has been duly forwarded to the Directorate of Public Service Management for consideration, since GEMVAS and LAMVAS is a Condition of Service Scheme. He saidthe Bank did also inform the Ministry that if the matter is not resolved by the 6th June, 2022, they would cease receipt of new GEMVAS and LAMVAS loan applications.

“A follow up virtual meeting was held to discuss their resolution and SCB did confirm that they will not be accepting any new loans from GEMVAS and LAMVAS. The decision includes top-up advances,” said Mphetlhe. He advised civil servants to consider applying for loans from other banks.

In a letter addressed to the Ministry, SCBB Chief Executive Officer Mpho Masupe informed theministry that, “Reference is made to your letter dated 18th March 2022 wherein the Ministry had indicated that feedback to our proposal on the above subject is being sought.”

In thesame letter dated 10 May 2022, Masupe stated that the Bank was requesting for an update on the Ministry’s engagements with the relevant stakeholder (Directorate of Public Service Management) and provide an indicative timeline for conclusion.

He said the “SCBB informs the Ministry of its intention to cease issuance of new loans to applicants from 6th June 2022 in absence of any feedback on the matter and closure of the discussions between the two parties.”  Previously, Masupe had also had requested the Ministry to consider a review of clause 3 of the agreement which speaks to the interest rate charged on the facilities.

Masupe indicated in the letter dated 21 December 2021 that although all the Banks in the market had signed a similar agreement, subject to amendments that each may have requested. “We would like to suggest that our review be considered individually as opposed to being an industry position as we are cognisant of the requirements of section 25 of the Competition Act of 2018 which discourages fixing of pricing set for consumers,” he said.

He added that,“In this way,clients would still have the opportunity to shop around for more favourable pricing and the other Banks, may if they wish to, similarly, individually approach your office for a review of their pricing to the extent that they deem suitable for their respective organisations.”

Masupe also stated that: “On the issue of our request for the revision of the Interest Rate, we kindly request for an increase from the current rate of prime plus 0.5% to prime plus 2%, with no other increases during the loan period.” The Bank CEO said the rationale for the request to review pricing is due to the current construct of the GEMVAS scheme which is currently structured in a way that is resulting in the Bank making a loss.

“The greater part of the GEMVAS portfolio is the mortgage boo which constitutes 40% of the Bank’s total mortgage portfolio,” said Masupe. He saidthe losses that the Bank is incurring are as a result of the legacy pricing of prime plus 0% as the 1995 agreement which a slight increase in the August 2018 agreement to prime plus 0.5%.

“With this pricing, the GEMVAS portfolio has not been profitable to the Bank, causing distress and impeding its ability to continue to support government employees to buy houses and cars. The portfolio is currently priced at 5.25%,” he said.  Masupe said the performance of both the GEMVAS home loan and auto loan portfolios in terms of profitability have become unsustainable for the Bank.

Healso said, when the agreement was signed in August 2018, the prime lending rate was 6.75% which made the pricing in effect at the time sufficient from a profitable perspective. “It has since dropped by a total 1.5%. The funds that are loaned to customers are sourced at a high rate, which now leaves the Bank with marginal profits on the portfolio before factoring in other operational expenses associated with administration of the scheme and after sales care of the portfolio,” said the CEO.

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