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Liquidator certifies BCL dead!

BCL which was put under provisional liquidation last year October is not about to resume operation anytime soon. This was revealed by Nigel Dixon Warren the company provisional liquidator on Tuesday the 17th at a media briefing in Selibe Phikwe.

 

According to Dixon Warren, the 2017 February 7th date contrary to the belief of many is only a return date in which the liquidation period   does not end. “It is not usually the procedure within liquidation dealings for the liquidator to address media and issue out information to the public, but considering the amount of public interest in this matter, I have seen it fit to assemble the media and clear out certain misconceptions and misunderstanding making rounds in the publication circles that are also polluting public knowledge consumption’’ explained Dixon Warren.


He unpacked that on February the 7th, 2017, the High Court will decide if the companies being BCL Limited, BCL Investments, Tati Nickel Mine should be placed under final liquidation or the initial reasons presented to the Court can be dismissed.
“The order granted in 9th October 2016 to wind up the companies was only a provisional liquidation or rule nisi” He said.

 

“Per the court order any interested party may apply to high court to prevent the Court not to grant the final order which winds up the company’s “According to Warren the court can  decide to extent the provisional liquidation period and delay the final winding up (complete liquidation) order if it believes  necessary.

 

He further noted that for the final liquidation order to be delayed or not be granted, that would require a clear demonstration  satisfactory to the court that the companies were not insolvent “That’s to say who ever the interested party logging that application would be, will have to prove beyond reasonable doubt why the winding up petition should be dismissed, of which according to my assessment all the three companies are fatally insolvent, like there have no money or funds or whatsoever and have been making massive losses” he said.


BEYOND FEBRUARY 7TH 2017


Nigel who is a well experienced professional housed under KPMG Chartered Accountants Advisory observes that it is in the best interest of all the creditors that the companies be finally wound up into liquidation process followed to its conclusion. Further lecturing on the processes after February 7th, Dixon Warren explained that after that date the real liquidation is only beginning.

 

In his terms “After February the 7th this year formal liquidation process commences” He observes that the winding up process includes holding meetings of creditors and sale of assets, a process he revealed takes months to over a year. “What happens is that at the return date if there is no application to dismiss the final liquidation order, the Master of the High Court who oversees the liquidation  now takes the reins and convene a formal meeting of creditors’” he said.


 The creditors meetings are held so that they the creditors can prove their claims against the companies (ie have them recognized as the creditors in the liquidation) so that they can issue instructions to the liquidator and ultimately receive payment against their claim (a dividend) at the end of liquidation process if there are sufficient funds realized in the sale of assets to cover the costs of the liquidation and pay a dividend to creditors. Warren also revealed that erstwhile directors of the companies will be required to attend the two meetings of creditors so that they can answer questions by creditors and the liquidator.


“I am only a provisional liquidator appointed by the High Court, at the 1st meeting of creditors, the proven creditors now nominate the final liquidator, this doesn’t always be the same person as provisional liquidator but in many cases creditors appoint the same person for continuity as the provisional liquidator would have already be familiar with the liquidation and insolvent company records” he explained.

 

He also indicated that at that meeting, he as the provisional liquidator will present a report written in terms of Section 44 of the companies Act. “This report provides creditors with details of assets and liabilities of the companies and a reason to why the entities failed in the first place. It was also observed that if the BCL companies are put on final liquidation on the 7th February 2017 it is expected that the first meeting of creditors be held in April 2017.


Dixon-Warren noted that the date of the meeting is not set by the provisional liquidator but by the Master of the High Court. “I have to prepare a report and submit claim forms to all known creditors, considering that these companies creditors are relatively many I will need time after February 7th to undertake this” he further stipulated. The BCL Undertaker Warren further added that the second meeting of creditors of which the reins will be on the final liquidator who might not be him, will give an opportunity to creditors to further prove their claims. “Ordinarily this second meeting occurs between three to six months after the first, and the final liquidator will report on the affairs of estate and will be given direction from the creditors as to the sale of the assets”


THE RUSSIAN NORILSK MATTER


The Liquidator also cleared misconceptions on the Russian Norilsk matter which has been making rounds , BCL had entered into an a share purchase  agreement with Norilsk Nickel Mauritius and Norilsk Nickel International  Holdings Limited to acquire Norilsk interest in South African Nkomati Mine and Tati Nickel Mine in Francistown.

 

Dixon Warren explains that prior to the liquidation there was a dispute between parties to the agreement as to whether the conditions precedent was met and therefore whether the contract has full force and effect. “Since Norilsk has taken the matter to court at the High Court of Botswana and in London, there are no further comments I can make on the issues” he said observing that once the issue is dealt with at the court of law, if the case went in favor of Norilsk they can approach him and claim their rightful argument as a creditor
Dixon Warren revealed that BCL has a number of creditors which the company had entered into operational contracts with.

 

He further clarified that Pula Steel contrary to the belief of many is not part of BCL or BCL Investment, stating that it’s a separate entity which BCL has shares not affected by BCL liquidation. “As a matter of fact Pula  Steel owes BCL millions in dividends , it is actually one of the few debtors which will have to pay us soon “ he explained adding that RealZim , MTO, Glecon , Zimbabwean Copper companies also owe BCL a few chunks of millions , but emphasized that BCL creditors seat at billions all together.


THE FUTURE OF BCL MINES


Further clearing the air on BCL recommencement of operations, Provisional Liquidator Nigel Dixon Warren unpacked the status of affairs at the mine sites, company assets and potential investors. “There is absolutely no intention to restart operation at the mines , no prospects or what so ever, not anytime soon ,either after February 7th or 1st meeting of creditors , and we are looking at possibly beyond 2017” he said emphasizing that currently there are no resources available to finance operations.

 

“I have currently placed the mines under care and maintenance, that decision was very paramount to safeguard the assets and preserve the company value” he explained. Dixon Warren revealed that he was advised by professional smelter experts to shut down the BCL smelter which is the most valuable asset of the company, explaining that it would be very costly to keep it running until final liquidation is complete.


“When I arrived here the Smelter was shut down from  7th October as per order by the  main shareholder the government , but the BCL engineers advised me to restart it and operate it at a warm temperature as it gets damaged and looses value  when it’s not operational” But I later engaged an expert who consulted  the manufactures of the smelter and we arrived to a conclusion that it would cost us 5 million pula per month on fuel alone to keep the smelter operational , thus I decided to shut it down , because
the finances I have cannot accommodate that” he explained.

 

The BCL assets custodian stipulated that there is 24 hour security at both Tati and BCL sites to secure the valuable assets and equipments at the company plants and sites. “I have had instances where it’s said that someone calls the local companies claiming  the assets of BCL are auctioned requesting deposits payments , I need to clear the air on that and emphasize that   members of the public must be aware of these scams, formal communication of asset disposal will be advertised.


INTERESTED BUYERS


Though no formal offers has been made yet and far from being put forth it was revealed that a number of interested parties have come forth to   make their interests known, the liquidator observes that the interested firms and investors are both local and international entities and persons. “No formal offers has been made, you see BCL has been profitless , hence it currently has no value and no investor will make any offer on such bases , we will have to asses and look deep into what opportunities can be salvaged from these companies” he said, adding that such processes and assessment as well as investigations is part of his job and it will take time.

 

According to Warren any conclusion to sell will  be considered after the second meeting of creditors observing that it will only be looked into if it’s at the best interest of  the creditors . Said Warren “To further attest to why I am saying the mine will not reopen soon ,even after sale of BCL or investor agreement ,it will take time to do restructuring , refurbishment of equipments and re-designing of shafts to start up the mine on profitability”  ,  “No sane investor would rush to put their money in a company that has been making losses “


FORMER BCL EMPLOYESS


“As we all know I was forced to terminate over 4000 employees contracts, I have paid terminal benefits to almost all of them, only just over 180 have not yet received their benefits” explained Warren adding that reasons to  that being the 180 are still being contacted ,some changed addresses amongst other reasons. He observed that he initially retained about 400 employees to help him with care and maintenance but have reduced the number to just over 350.

 

“I have fired some of my stuff and rehired some of the initially terminated, because I operate under a limited budget and time so I cannot afford incompetent stuff” he explained, Dixon Warren noted that all former BCL employees who occupied  houses have been allowed to stay in the house. “We have signed lease with them up to 31st October 2017, and as per our agreement the occupants will not be paying rent in return we want them to keep the houses in good shape and suitable state, however as stated before occupants will pay for  their own utilities bills, ie water and electricity ” he said explaining that the date will be probably when   selling company asserts will begin.

Nigel Warren noted that having paid terminal benefits to former employee’s there was nothing more he can do as far as health services and other incentives are concerned, um told the government has taken over.
 BCL which has been in operation for the past 40 years was put under provisional liquidation last year October 9th after operations were halted 2 days earlier, The decision which is believed to have been orchestrated by state owned Mineral Corporations Limited put over 4000 miners to the streets jobless and thousands households without breadwinners and consequently shutting down the economic nucleus of the whole eastern bloc of the country.

However as reports indicate that cooper and nickel prices have bounced back by 20% the man mandated to dissolve the BCL Group told weekendpost after the media briefing that resident and settlers this side of this country should not put the mine in their plans of survival for the next few months as there is still lot of work to do ,adding that if at all investors put money the mine will only resume operation in 2018 realistically

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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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