Letshego Holdings Limited went through mini transformation in the recent weeks with about eight staff members leaving the employ of the organization through dismissals, retirement and resignations. The developments at Letshego follows recent reports of embezzlement of funds under the pretext of loans at the organization.
Mythri Sambasivan-George, Group Head of Corporate Affairs at Letshego Holdings Limited rubber stamped the organization’s “people commitment strategy” which said does not allow them to share employee information. “Letshego has high regard for employee and employer confidentiality. To this end, we do not discuss the employment record of any individual because to do so breaches that confidence,” she said.
Of more gravity is the company’s decision to fire two finance managers who are Batswana. Their dismissal followed the exit of Head of Audit at the organization. At the moment there is another Motswana finance manager who is serving notice. In the last two months six key personnel in the finance department have left the organization.
Letshego Holding Limited has also demoted the Human Resources Director and was quickly replaced recently. It is not clear why the HR Director was demoted but he is seen as one of those who are irked by the apparent channeling of funds to finance projects in Kenya. There are also suggestions that Letshego headquarters will be moved to South Africa. Letshego in Botswana contributes about 40 percent to the Group’s balance sheet. The position was not advertised.
“As a listed business, Letshego is committed to strong transparency and governance principles, to achieving high levels of employee engagement and to investing in its employees for developmental and capacity reasons. This approach will enable us to sustain our strategy for growth, performance and returns and should benefit our valued team members as well as our customers and other stakeholders in the medium to long term,” Sambasivan-George served this reporter.
She explained that Letshego also invests in “talent mobility” to build and broaden the skill set of the company’s key leadership staff through exposure to other markets and business environments – “for example, local Batswana talent represent Letshego in Kenya, Lesotho and Nigeria today. Further we evaluate all such opportunities as they arise, with our actions premised on strong governance.”
Some had tried to link the mass exodus at Letshego with a recent discovered scam in which loans were fraudulently secured through the names of customers by some staff members. But those in the know dismiss the theory and assert that the departures stem from growing discontent over staff welfare and key decisions affecting the company.
Two months back a paper trail at Letshego had unearthed fraudulent loan applications and transactions littered with the fingerprints of some of the suspended employees.
Information passed to this publication at the time suggested that the concerned employees have been faking loan applications, using the names of genuine customers, only for the money to end up in their (employees) bank accounts.
Over the past two months investigations put the figure at over P1 million. Letshego is the first consumer lending company to be established in Botswana and is still the leading provider of unsecured credit to Batswana. Letshego was established to provide unsecured loans to formally employed clients.
Two of the employees who were suspended from the company have returned to work. A clear indication that there is no evidence linking them to the scam, our sources say. At the time the fraud was discovered five employees were suspended.
The employees, it is understood, prepared loan applications in the region of P20 000, P50 000 and P100 000 in the names of Letshego clients. The management is said to have taken the decision to suspend the employees in order to protect the integrity of the company and the interests of the clients.
Batswana employees at Letshego have in the past voiced out (discretely) on the apparent targeted approach that appears to sideline them. They point to a skewed salary structure that sees locals earning less when compared to expatriates. Those in the Finance department were growing frustrated over this. Just recently an expatriate with less experience was hired and is earning $7000 a month (approximately P77 000) while they range at P17000 a month.
Letshego rewards those at the top handsomely with the Group CEO earning a basic of about P500 000 a month; Letshego CEO pocketing over P300 000, and his COO earning about P250 000 a month. Those below them are questioning the disproportionate salary structure.
Letshego has achieved outstanding results over the past eleven years in terms of customer base within Botswana. But with the latest scam some customers who caught wind of the latest scam at the financial services provider feared whether their names have been used to defraud the company which could erroneously soil their credit rating. This was one of the questions that were posed to Serumola in the questionnaire.
The Pan-African focused micro lender, Letshego exceeded P1 billion in profit before tax, a two percent increase from the P970 million recorded in the prior year, according to the group’s financial results for the year ended December 31, 2015. Managing director, Chris Low had told the media it is the first time their profit before tax exceeded the billion mark with underlying profitability up five percent excluding foreign exchange differences. Some of the employees are said to have remarked that the huge profits were not trickling down to them hence the latest fraudulent escapades.
The Letshego group operates in 10 African countries. Despite strong competition locally, the group disbursed P2.37 billion in new loans which is a seven percent increase from the previous year while in Kenya it recorded a 100 percent increase to P400 million.
Government is currently sitting on 4 400 vacant posts that remain unfilled in the civil service. This is notwithstanding the high unemployment rate in Botswana which has been exacerbated by the recent outbreak of the deadly COVID-19 pandemic.
Just before the burst of COVID-19, official data released by Statistics Botswana in January 2020, indicate that unemployment in Botswana has increased from 17.6 percent three years ago to 20.7 percent. “Unemployment rate went up by 3.1 percentage between the two periods, from 17.6 to 20.7 percent,” statistics point out.
Leading commercial bank, First National Bank Botswana (FNBB), expects the central bank to sharpen its monetary policy knife and cut the Bank Rate twice in the last quarter of 2020.
The bank expects a 25 basis point (bps) in the beginning of the last quarter, which is next month, and another shed by the same bps in December, making a total of 50 bps cut in the last quarter. According to the bank’s researchers, the central bank is now holding on to 4.25 percent for the time being pending for more informed data on the economic climate.
An audit of the accounts and records for the supply of food rations to the institutions in the Northern Region for the financial year-ended 31 March 2019 was carried out. According to Auditor General’s report and observations, there are weaknesses and shortcomings that were somehow addressed to the Accounting Officer for comments.
Auditor General, Pulane Letebele indicated on the report that, across all depots in the region that there had been instances where food items were short for periods ranging from 1 to 7 months in the institutions for a variety of reasons, including absence of regular contracts and supplier failures. The success of this programme is dependent on regular and reliable availability of the supplies to achieve its objective, the report said.
There would be instances where food items were returned from the feeding centers to the depots for reasons of spoilage or any other cause. In these cases, instances had been noted where these returns were not supported by any documentation, which could lead to these items being lost without trace.
The report further stressed that large quantities of various food items valued at over P772 thousand from different depots were damaged by rodents, and written off.Included in the write off were 13 538 (340ml) cartons of milk valued at P75 745. In this connection, the Auditor General says it is important that the warehouses be maintained to a standard where they would not be infested by rodents and other pests.
Still in the Northern region, the report noted that there is an outstanding matter relating to the supply of stewed steak (283×3.1kg cans) to the Maun depot which was allegedly defective. The steak had been supplied by Botswana Meat Commission to the depot in November 2016.
In March 2017 part of the consignment was reported to the supplier as defective, and was to be replaced. Even as there was no agreement reached between the parties regarding replacement, in 51 October 2018 the items in question were disposed of by destruction. This disposal represented a loss as the whole consignment had been paid for, according to the report.
“In my view, the loss resulted directly from failure by the depot managers to deal with the matter immediately upon receipt of the consignment and detection of the defects. Audit inspections during visits to Selibe Phikwe, Maun, Shakawe, Ghanzi and Francistown depots had raised a number of observations on points of detail related to the maintenance of records, reconciliations of stocks and related matters, which I drew to the attention of the Accounting Officer for comments,” Letebele said in her report.
In the Southern region, a scrutiny of the records for the control of stocks of food items in the Southern Region had indicated intermittent shortages of the various items, principally Tsabana, Malutu, Sunflower Oil and Milk which was mainly due to absence of subsisting contracts for the supply of these items.
“The contract for the supply of Tsabana to all depots expired in September 2018 and was not replaced by a substantive contract. The supplier contracts for these stocks should be so managed that the expiry of one contract is immediately followed by the commencement of the next.”
Suppliers who had been contracted to supply foodstuffs had failed to do so and no timely action had been taken to redress the situation to ensure continuity of supply of the food items, the report noted.
In one case, the report highlighted that the supplier was to manufacture and supply 1 136 metric tonnes of Malutu for a 4-months period from March 2019 to June 2019, but had been unable to honour the obligation. The situation was relieved by inter-depot transfers, at additional cost in transportation and subsistence expenses.
In another case, the contract was for the supply of Sunflower Oil to Mabutsane, where the supplier had also failed to deliver. Examination of the Molepolole depot Food Issues Register had indicated a number of instances where food items consigned to the various feeding centres had been returned for a variety of reasons, including food item available; no storage space; and in other cases the whole consignments were returned, and reasons not stated.
This is an indication of lack of proper management and monitoring of the affairs of the depot, which could result in losses from frequent movements of the food items concerned.The maintenance of accounting records in the region, typically in Letlhakeng, Tsabong, and Mabutsane was less than satisfactory, according to Auditor General’s report.
In these depots a number of instances had been noted where receipts and issues had not been recorded over long periods, resulting in incorrect balances reflected in the accounting records. This is a serious weakness which could lead to or result in losses without trace or detection, and is a contravention of Supplies Regulations and Procedures, Letebele said.
Similarly, consignments of a total of 892 bags of Malutu and 3 bags of beans from Tsabong depot to different feeding centres had not been received in those centres, and are considered lost. These are also not reflected in the Statement of Losses in the Annual Statements of Accounts for the same periods.