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Mabeo explains BTCL public listing delays

Minister says one law firm may have caused delay in privatisation

The Minister of Transport and Communication Tshenolo Mabeo has said that the engagement of sole law firm in managing the process of BTCL privatisation may have led to the delay in allowing Batswana to participate in the purchase of the BTCL shares.


In an interview with the WeekendPost Mabeo indicated that there has been delay in opening the shares to the public which he partly attributes to engagement of Monthe Marumo law firm in solely providing the advisory roles of parastatals Botswana Fibre Network (BOFINET) and Botswana Telecommunications Corporation Limited (BTCL).


“The danger of engaging one law firm in this process, which of course is in conflict of interest, may be that government business may have been delayed in the process,” he emphasised.


If it was different firms, they could have long concluded this privatisation process and shares opened for Batswana to take part, Mabeo highlighted. He said they could have concluded the process in December last year but were forced to postpone. The Minister pointed out that it consequently delayed services to the public.


According to Mabeo, engaging one law firm in BTCL privatisation process also puts the government at risk as it will act based on the informed foundation and decision from the law firm. The Minister stressed that the law firm should have declared its dual engagement by the parastatals and by extension the ministry in the process of privatisation – by making the government aware.


He added that it is a clear conflict of interest on the part of the law firm and that Law Society of Botswana which regulates lawyers should look into the matter. When asked by this publication, if it was not the responsibility of the ministry and concerned parastatals to avoid the conflict of interest by the law firm, the minister defended the latter saying “it was upon the engaged law firm not parastatals.”


Mabeo was speaking to the WeekendPost following a parliamentary business question session that revealed the alleged conflict in the process and progress of privatisation of the BTCL.


Member of Parliament for Gabane Mmankgodi, Pius Mokgware had asked Minister Mabeo to state the law firms involved in privatisation of BTCL process and the fees paid, including whether individuals involved are not from one law firm or partners in one law firm. Mokgware also asked the criterion that was used to select the law firms in both situations.


In answering, Mabeo stated that the two individuals advising BTCL and Botswana Fibre Network (BOFINET) are from the same law firm of Monthe Marumo and company incorporating Molatlhegi and Associates. He added that neither Bofinet nor BTCL were aware of this conflict until this week Monday (30th March 2015). The onus on declaring conflict of interest was declared by Monthe Marumo and Company incorporating Molatlhegi and Associates, Mabeo told parliament on Wednesday.


However, Mabeo said Monthe Marumo and Company incorporating Molatlhegi and Associates was directly appointed by both BTCL and Bofinet from their approved panel of legal firms. The panel of legal firms, he said was selected through selective tendering. He also noted that Collins Newman and Delloite Consortium were appointed by PEEPA through a competitive public tender process.


According to Minister of Transport and Communication, the official transaction advisors to government (the selling shareholder), appointed by the Public Enterprises Evaluation and Privatisation Agency (PEEPA), are Collins Newman and Deloitte (CND) Consortium. The total amount of the Consortium (transaction advisors) is P9.5 million.


The legal advisors in the consortium are Collins and Newman & Company. The legal fees according to the consortium contract with PEEPA signed in March 2011 are P2, 987, 000.00. “The legal advisors to the BTCL are Monthe Marumo and Company (in partnership with ENS Africa). They were engaged on the 6th of March 2014 at total fees of P1, 703, 916. 85.”


Bofinet further engaged Monthe Marumo and Company incorporating Molatlhegi & Associates to review and advise them on the draft possession and use Agreement and were paid a total amount of P47, 181.67 VAT inclusive.


In another question related to BTCL privatisation, in particular BTCL and Bofinet agreement, Mokgware had wanted the Minister to state whether the 4th November 2014 version of the Possession and use Agreement have been signed, and if the BTCL Initial Public Offering (IPO) has been launched as at 31st December 2014 as was planned, as well as if the postponement will attract legal costs.


“The BTCL IPO was not launched on the 31st December 2014. Government decided to postpone the launch to enable it to conclude the process of raising funds for the underwriting arrangements.  Further, it was intended that the postponement would give Batswana ample time to raise capital to effectively participate in the purchase of the BTCL shares,” Mabeo answered.


According to Mabeo, the postponement of the IPO launch will not only attract additional legal fees but additional transactional advisory services. This is because some of the activities under the scope of transactional advisory services will have to be redone or updated, he said.

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