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P100 billion case: RSA judge says it is falsehood 

Welheminah Mphoeng Maswabi codename 'Butterfly'

A South African judge, Justice Dennis Davis, long found that the P100 billion looting case was based on falsehoods. His findings, though not publicized, were made before Gaborone High Court Judge Dr. Zein Kebonang arrived at the same conclusion in a related case in which suspended intelligence officer Welheminah Mphoeng Maswabi codenamed ‘Butterfly’ was sought for her charges to be quashed. Maswabi faced terrorism financing, money laundering, and corruption charges. Judge Kebonang found that the charges were fabricated. 

South African businesswoman, Bridgette Motsepe who is implicated alongside former President Ian Khama and former Director of Directorate of Intelligence and Services (DIS), Isaac Kgosi, enlisted the services of Justice Davis, who has retired from the bench and currently consults for South African Revenue Services to offer a legal opinion in a related case in which the Directorate of Public Prosecutions through Afriforum brought an application before the Gauteng High Court to compel the South African government to provide necessary information and assistance in terms of a Mutual Legal Assistance based on allegations money laundering. He also offered another legal opinion in a case in which she is suing Botswana Government for defamation.

In the first legal opinion, dated 26 June 2021, Davis explained that he had been instructed that the Botswana State’s case appeared to be that former President and Motsepe intended to use those funds to generate opposition against the current President of Botswana Mokgweetsi Masisi.

Davis further explained that “Although the politics appear to dominate the entire saga, this opinion is focused on one issue. It appears that the Afriforum application is designed to obtain mutual assistance concerning the involvement in the secreting of funds out of Botswana in breach of the relevant Botswana law, and the Ambassador (Motsepe) is implicated therein.”

He said that while this opinion is concerned solely with the allegations against Motsepe and thus is not designed to express any view on the prosecution of Maswabi, of necessity, it is required to traverse some of the relevant issues concerning the case.  Davis said the allegations against Motsepe begin with the supposed role played by Mahktota Bank, which is allegedly a financial institution located in Jarkata, Indonesia.

Davis found that it has no internet presence besides its site, its blog, and other websites that state it exists.  “The website itself does not list its license number nor the link for its banking filing. Further, a series of publicly available communications suggest nothing more than a front for financial scams. The dubious role of Mahkota bank is reflected in the fact that in records maintained by the Indonesian Financial Services Authority and the Indonesian Central Securities Depository, there is no entity of that kind that is authorised to act as a financial institution in India,” said Davis.

He said on its own this might not be conclusive evidence to justify my conclusion. However, most certainly, it should place any lawyer acting according to the standard of a reasonable practitioner on their guard.

“Mr. Hubona ((Jako Hubona, the investigating officer in the case) then alleges that on 15 February 2019, Mr. Khrisna transferred USD 48 million from Mahkota Bank to an account number 200904299 held at the Alberton branch of Standard Bank of South Africa. It is further alleged that these funds were cleared by the South African Reserve Bank on 21 February 2019,” said Davis. However, he said, on 13 August 2020, the South African Reserve bank refuted the existence of this alleged transfer in a letter that was addressed to Motsepe via her attorney Dr. Dario Milo.

“This view has been confirmed to me by Deputy Governor Kuben Naidoo. I have also confirmed with Mr. Reggie Reatile, a member of the Botswanan Parliament who asked the Governor of the Bank of Botswana questions about whether funds had flowed out of Botswana and which would substantiate the allegations that were made. He confirmed that the Governor refuted any such claims as baseless,” said Davis.

He added that “If any further justification is required for the conclusion that any case which has been brought has been predicated not on legal but on exclusively political grounds, then that can be found by an examination of the affidavit written and signed by Mr. Hubona.” According to Davis, it is difficult to find an affidavit that lacks legal substance, accurate factual averments, or any plausible case against anyone named in the affidavit.

He said disturbing inconsistencies are evident in the various allegations set out in the affidavit.  In another supplementary legal opinion dated 30 June 2021, Justice Davis questioned the integrity of the then lead Prosecutor in the case Priscilla Israel (now Deputy Director of Directorate on Corruption and Economic Crime) and Hubona as the investigating officer in the case.

Davis cited an email of Priscilla Israel, then the head of the International Cooperation Unit within Botswana’s Directorate of Public Prosecutions, to Berdine Schutte and Herman Van Heerden of South Africa’s Department of Justice.

Israel reportedly states the following; “We submitted an urgent request on Mutual Legal Assistant relating to the Bank of Botswana fraud and Money Laundering case. Another matter related to it (sic) is a request for mutual legal assistance concerning Avante Securities.” The request relates to Motsepe and Makaku Mining.

Davis stated that on 23 November, Israel deposited a supporting affidavit which was filed together with the Government of Botswana’s answering affidavit in the defamation application launched by Motsepe on 23 October 2020 before the High Court of Botswana.

She reported that “During our inquiry, we discovered that the applicant was involved in the transfer of funds to the Republic of Botswana for the benefit of the former President Dr. Ian Khama Seretse Khama through a Botswana registered company the name of Avante Security Services (Pty) Ltd.”

She added in the affidavit that “I must point out prior my departure I was aware that the Botswana Police Service) was investigating an allegation of money laundering against Makua Mmakau mining, Mr. Olebeng Ngwakwena, Lazarus Mbethe, Mr. Paul Langa and Zonkezizwe Pty Ltd which matter is registered in our office for mutual legal assistance under file number CCG 2/14/68having been received om the 14th May 2019 from the Botswana Police Services.”

Israel also stated that “Furthermore, a request for mutual legal assistance had already been sent to the Republic of Seychelles on 2nd September 2019 and to the Republic of South Africa on the 9th October 2019. A further request was subsequently made to India on the 20th of January 2020.

We have received responses from India and Seychelles, but we are still following up with these countries. We are awaiting a response from the Republic of South Africa.” “The investigations revealed that Avante Security Services Botswana was initially wholly owned by a Botswana citizen Mr. Olebeng Ngwakwena.

However, in 2017, it was purchased by Zonkezizwe Pty Ltd, a South African registered entity. The said company is the owner (sic) and controlled by a Mr. Langa and a Mr. Mbethe. Mr. Olebeng Ngwakena’s shareholding has been reduced to 26% with Zonkizizwe holding 74%,” Israel is quoted as saying in her affidavit.

Giving a legal opinion on this, Davis said a careful analysis of these documents confirms that which he had concluded in his previous opinion, namely that Israel and by extension the application for mutual assistance “is based on so flimsy a legal edifice to justify the conclusion that these proceedings are based on a political as opposed to a legal agenda.”

He said,

“Israel’s affidavit is truly a problematic document in that it is replete with pure unsubstantiated speculation,” adding that “a few examples suffice to justify this.”
According to Justice Davis, confronting the problem that the South African Reserve Bank (SARB) has stated that no money passed through its records by way of a remittal, Israel says: “Significantly the Reserve Bank does not state that it did not authorize the release of the funds, but rather it could not find any record of the transaction referred to as well as the authority. It is my averment that the results of our request will bear fruit.”

Davis said for Israel cast doubt on the SARB’s response to the allegation that sums of money being remitted into SA is disingenuous at best and have no place in a court of law. It is an attempt to use hermeneutics to counter the obvious-no such money came into the country.

“Similarly, Advocate Israel suggests that the respondents (Botswana Government), through their investigations, have established that the names Fire Files and Blue Files (companies whose accounts the money was transferred) “are code names, the actual bank account names are still to be established.” Davis found that later Israel suggests that these two are actual companies, a passage that seems to have been drafted in ignorance of the code name argument.

“The contention that companies like Fire Files and Blue Files are code names is an attempt designed to explain away the evidence of the SA Banks regarding the absence of accounts in these names. It means that Advocate Israel is alleging these banks to process somehow money that is below the SARB radar into secret accounts known by code but not by real corporate entities,” said Davis.
He said, “while these points do not apply directly to Avante and the allegations related to it, they go directly to clear lack of credibility on both Advocate Israel and Mr. Hubona.”

Davis said the problem facing Afriforum concerning Avante and the allegations related thereto is the following. In the light of the manifest difficulties concerning the overall case of money laundering, it is confronted with these improbable references: that the relevant consultancy agreement entered into between Avante and Mmakau was but a sham, that SARB was led astray in the permitting money to be paid out for security services plus expenses and that the entire structure and hence the payments made to Avante were in truth for the benefit of former President Khama.

There is nothing in papers made available to justify this level of inference, particularly in that the recipient is a company that provides security services to mining enterprises. There is nothing to suggest otherwise in the documents made available to me.

He said there is a further implication of the strategy adopted to allege South African complicity with money laundering in Botswana as described in both this opinion and my opinion relating to the Bank of Botswana matter. The only evidence, said Davis, is that no such money entered South Africa nor any plausible cash was paid into bank accounts of South African entities.

He warned that “To persist with these allegations is to suggest that both the South African Reserve Bank and a range of South African banks were either party to a conspiracy, have misrepresented the true position of or have all been grossly incompetent. This only has to be stated to illustrate that the course of action of Advocate Israel assisted by Afriforum seriously calls into question the very integrity of the South African banking system and the key regulatory institution.”

“Without any evidence to the contrary which has never been produced or plausibly offered, this course of conduct has been adopted for reasons which absent any evidence, allows only for any reasonable inference to be drawn, namely that political considerations have overridden any legal justification for pursuing this application should thus be treated as unsubstantiated on the country’s banking system,” he further warned.

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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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