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CMB wants P650 million from Bona Life CEO Vaka

Gaborone based attorney, Gabriel Kanjabanga of Kanjabanga and Associates, has, when representing Capital Management Africa (Pty) Ltd (CMB) and Rapula Okaile unearthed that the current value of Bona Life is roughly sitting at zero.

Both Okaile and CMB are the shareholders of Foudello (Pty) Ltd which in turn owns 100% of Bona Life Insurance (Pty) Ltd. Collectively they own 65% of the issued equity of Foudello. A scathing letter written to Reginah Sikalesele-Vaka and leaked to the Weekend Post suggests that CMB wants 650 million pula for mismanagement of Bona Life and her unlawful conduct.  

“CMB has suffered damages due to your unlawful conduct and we are instructed to seek damages against you in your personal capacity in the amount of 650 million pula. We await your substantive response hereto so that CMB may consider their position,” CMB lawyer said threatening the Bona Life CEO. Vaka is not only the CEO of Bona Life but also Director of Bona Life and Foudello. She is also a shareholder of Foudello, owning 25% of the issued equity in her own name and thus she owns 25% of Bona Life.

According to Kanjabanga, although they do not intend to litigate the matter by way of correspondence they want to place on record some of the instances of unlawful actions. As CEO they say she has “mismanaged Bona Life to the extent that your actions has resulted in massive destruction of shareholder value, resulting in Bona being declared insolvent by your statutory actuaries, QED.”

He added that the mismanagement of Bona is in fact, confirmed by the valuation letter from QED dated 30 September 2017, and relevant portion reads: “as at the valuation date the company was insolvent and also did not meet the solvency requirements as required by the Act.”
It is understood that the deterioration in solvency position by Bona was mainly driven by: the investment mismatch on the annuity book; the new business strain as a result of the high volumes of the new business sold; the continued expense overrun; and poor investment returns.      

The lawyer also pointed out that “you continued to negotiate with CMB to arrange a capital injection of some 100 million pula into Bona. The capital injection was much needed capital input required by Bona in order for your mismanagement not to be so patently obvious, so as not to alert the Regulator as to the true state of Bona’s financial position come the end March 2018 reporting period.” In fact you confirmed, he said in writing through an email, “I know very well what you have told me and I know very well that I am in deep, deep trouble. Thank you for reminding me of both counts.”

Bona remains insolvent at this stage

Instead of a successful company, it is understood that Bona Life is now insolvent. Kanjabanga asserted that “this latter state of affairs is solely as a result of your calculated interference in a dispute which does not concern you and/or Bona, for the sole purpose of your self-created need to have a scape goat to blame for your mismanagement of Bona.”

Your unlawful actions, he said although intended for the benefit of Bona, falls outside the course and scope or your duties and obligations as a Director and/or CEO and is, in fact, a serious breach of your fiduciary duties. Your actions were malicious, vexatious, conducted for your own benefit and unlawful.

This, the lawyer continues, is evidenced by that which they (Bona) reported in their September 2017 Valuation Letter, namely “as the valuation date the company was insolvent and also did not meet the solvency requirements as required by the Act.”We recommend an immediate cessation of writing new annuity business until the following conditions are met; capital is injected to return the company to at least 150% solvency with additional capital made available to finance the expected future new business strain. In addition, that the company performs 3 year business plan to assess its future capital needs and illustrate its plans for returning to meeting the minimum solvency requirements.  

Why Vaka reported CMB to NBFIRA and DCEC

Kanjabanga continued to tell Vaka in the communication that: “in an attempt to cover up your mismanagement you undertook two actions; firstly you maligned your shareholder, CMB by making various misrepresentations to both the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) and the Directorate on Corruption and Economic Crime (DCEC).”


Your misrepresentations, he said relating to reporting CMB to NBFIRA were solely designed to provide you with a scapegoat for your own mismanagement of Bona and assist you in avoiding your self-created and admitted ‘deep deep trouble’ in which you find yourself. He said the Bona CEO made critical and material representations to NBFIRA and DCEC by stating in one letter dated 9 January 2018 to NBFIRA that CMB manages 133 million pula of Bona assets while in fact CMB does not manage any assets for Bona and no contract to the contrary exists. “Your misrepresentation was purely designed to create the impression that Bona’s investments would be at risk, something that is far removed from the truth,” CMB lawyers of record insisted.  

Bona conspired with BPOPF to obtain 100 million pula funds

“Further, Gift Noko, an employee of Bona, admits in his letter purportedly addressed to NBFIRA on 12 January 2018, whilst it is, in fact, dated 10 August 2017, that you conspired with the Botswana Public Officers Pension Fund (BPOPF) to obtain funding from it in order to bail out Bona and thus, you. It must also be pointed out that you represented that BPOPF is a shareholder of Bona, a representation you know to be false,” Kanjabanga highlighted.  

This conspiracy he added that was driven by a carefully devised scheme to obtain injection of further funds, sourced from the BPOPF, into Bona. Having regard to your tract record of mismanagement, these funds would no doubt have been improperly managed with resultant losses, attorney said.   

“Further implying your role as instigator of various misrepresentations against CMB, is the BPOPF letter dated 17 January 2018, headlined ‘coordination of efforts regarding CMB.’ It is evident that the BPOPF is attempting to use a statutory instrument to unlawfully reverse a contractual failing of its own making, which unlawful conduct you have assisted and/or advanced through your false claims.” Your unlawful actions resulted in the obliteration of the shareholder value of Bona, and consequently Foudello, Kanjabanga asserted. To set the record straight he said CMB holds no assets of BPOPF, and that no asset management functions are conducted through CMB. He reminded Vaka that there were discussions to merge CMB with Fleming and then possibly to inject Fleming into Bona.

Bona was to be listed on Botswana Stock Exchange

It was intended to list Bona during late 2018 or 2019 on the Botswana Stock Exchange in the manner as proposed by Vaka. It bears mentioning that you proposed that the 40% of equity held by the Botswana Opportunities Partnerships should be sold so as to create the free float, while you would retain your entire 25% shareholding, lawyer mentioned to the Bona CEO.


“The expected valuation on listing was estimated at one billion pula, which means your 25% would have been worth 250 million pula. Based on this, the shareholding valued of the 65% shareholders would have been 650 million pula. Now, however, your wanton obliteration of shareholder value of bona has rendered the aforesaid valuation unattainable.”

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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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Botswana ranked 129 in female MPs representation

26th July 2022
Minister of Finance & Economic Development Peggy Serame

The Global Gender Gap Index, a report published by the World Economic Forum annually, has indicated that Botswana is among countries that fare badly when it comes to representation of women in legislative bodies.

The latest Global Gender Gap Index, published last week, benchmarks the current state and evolution of gender parity across four key dimensions (Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment). It is the longest-standing index which tracks progress towards closing these gaps over time since its inception in 2006.

This year, the Global Gender Gap Index benchmarked 146 countries. Of these, a subset of 102 countries have been represented in every edition of the index since 2006, further providing a large constant sample for time series analysis.

Botswana ranks number 66 overall (out of 146 countries), with good rankings in most of the pillars. Botswana ranks 1st in Health and Survival, 7th in the Economic Participation and Opportunity, 22nd in Educational Attainment, and 129th in Political Empowerment.

The Global Gender Gap Index measures scores on a 0 to 100 scale and scores can be interpreted as the distance covered towards parity (i.e. the percentage of the gender gap that has been closed). The cross-country comparisons aim to support the identification of the most effective policies to close gender gaps.

The Economic Participation and Opportunity sub-index contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour-force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work).

Finally, the gap between the advancement of women and men is captured through two hard data statistics (the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers).

The Educational Attainment sub-index captures the gap between women’s and men’s current access to education through the enrolment ratios of women to men in primary-, secondary- and tertiary-level education. A longer-term view of the country’s ability to educate women and men in equal numbers is captured through the ratio of women’s literacy rate to men’s literacy rate.

Health and Survival sub-index provides an overview of the differences between women’s and men’s health using two indicators. The first is the sex ratio at birth, which aims specifically to capture the phenomenon of “missing women”, prevalent in countries with a strong son preference. Second, the index uses the gap between women’s and men’s healthy life expectancy.

This measure provides an estimate of the number of years that women and men can expect to live in good health by accounting for the years lost to violence, disease, malnutrition and other factors.
Political Empowerment sub-index measures the gap between men and women at the highest level of political decision-making through the ratio of women to men in ministerial positions and the ratio of women to men in parliamentary positions. In addition, the reported included the ratio of women to men in terms of years in executive office (prime minister or president) for the last 50 years.

In the last general elections, only three women won elections, compared to 54 males. The three women are; Nnaniki Makwinja (Lentsweletau-Mmopane), Talita Monnakgotla (Kgalagadi North), and Anna Mokgethi (Gaborone Bonnington North). Four women were elected through Specially Elected dispensation; Peggy Serame, Dr Unity Dow, Phildah Kereng and Beauty Manake. All female MPs — save Dow, who resigned — are members of the executive.

Overall, Botswana has 63 seats, all 57 elected by the electorates, and six elected by parliament. Early this year, Botswana Democratic Party (BDP) secretary general and Gaborone North MP, Mpho Balopi, successfully moved a motion in parliament calling for increment of elective seats from 57 to 61. Balopi contented that population growth demands the country respond by increasing the number of MPs.

In Africa, Botswana play second fiddle to countries like Rwanda, Namibia, South Africa, Burundi, and Zimbabwe who have better representation of women, with Rwanda being the only country with more than 50 percent of women in parliament.

The low number of women in parliament is attributed to Botswana’s current, electoral system, First-Past-the-Post. During the 9th parliament, then MP for Mahalapye East tabled a motion in parliament in which she sort to increase the number of Specially Elected MPs in parliament to augment female representation in the National Assembly.

The motion was opposed famously, by then Specially Elected MP, Botsalo Ntuane, who said the citizens were not in favour of such a move since it dilute democracy, instead suggesting the Botswana should switch to Proportional-Representation-System. Botswana is currently undergoing Constitutional Review process, with the commission, appointed in December, expected to deliver the report to President Mokgweetsi Masisi by September this year.

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