Milijove Nikolic fingered in FSG’s missing millions

Dikarabo Ramadubu - BG reporter
Tuesday, 11 June 2019
Former FSG Limited MD, Milijove Nikolic Former FSG Limited MD, Milijove Nikolic

Milijove Nikolic, the former Managing Director and founder of local funeral parlour – FSG Limited - has been linked to the financial bleeding of the company. He is believed to have made unsecured transactions worth millions of Pula for himself. Nikolic confirmed being aware of the “allegations” as contained in a note on the company’s annual audit report but denied any charges labelled against him.

He could not make any further comment saying he is bound by the confidentiality agreement that he signed with FSG. Actively employed civil servants are among the investors of FSG through Fund managers Allan Gray who have been engaged by Botswana Public Officers Pension Fund (BPOPF). The revelations of financial impropriety at FSG come just a few weeks ahead of the shareholders annual general meeting scheduled for 28 June 2019. The purpose of the AGM is to receive and approve the audited annual statement for the year ending 31 December 2018 as well as to re-elect directors of the company

The report, which Botswana Guardian is in possession of shows that the directors got a signal that over P20 million unsecured loans were taken either by Nikolic or one of his other private companies. This allegedly came to the surface either at the time when he was just about or subsequent to his resignation from the company. At the centre of the controversy the unqualified accounts show that Nikolic took the sum of P23, 495,000 for his personal use without the board authorisation. Out of the above amount, Nikolic managed to pay back P17, 077.413 which is the amount recovered before the end of the 2018 financial year. The balance of P6, 417,587 is to be repaid on or before the 30th July 2019, with interest prime rate charged from the 24th January 2019 to the day of settlement.

This is according to the latest FSG Limited financial audit report of 2018 done by KPMG and released this week. The report shows that during the year 2017 the company advanced an unsecured loan of P6, 960, 064 (P5, 812, 269)  which is repayable on demand in United Sates Dollars and carries an interest of  8 percent per annum to Veamet Properties Limited. Veamet is a company registered in Zambia in which FSG has a shareholding of 30 percent. In the same period an unsecured loan of P5, 730, 388 (payable on demand in United States Dollars) was advanceed to FSG Zimbabwe Private Limited (a company registered in Zimbabwe) in FSG has shareholding of 45,25 percent (2017: 44 percent).

These loans have no fixed term of repayment. Nikolic resigned his position on 28th January 2019 where it was reported that he is going to pursue other interests. The board then replaced him with Vijayan Narayanan – formerly Chief Finance Officer (CFO). Both Narayanan and the outgoing board chairman Victor Senye signed and approved the group’s annual financial statement. The statement reads in part that the directors accept responsibility for the group’s annual statements and the annual financial statements  of the company which were  approved on 18 March 2019.

FSG accounts are unqualified except for a few loose screws that need tightening in terms of how money was moved. Senye could not be drawn to discuss this matter, stating that he is the outgoing chairman and major shareholders are the ones who are in a better position to comment.

FSG which started 25 years, ago was a dream held by Nikolic’s wife Lynette in 1993 from a small warehouse which was converted into a factory to produce coffins and casket after securing funding from the then Financial Assistance Policy (FAP). Its portfolio of companies operate in coffin and tombstone manufacturing, funeral insurance services, Lyn’s Funeral Parlour, Kagiso Funeral Parlour, 20 funeral homes across the country, as well as Phomolong Memorial Park in Gaborone, has grown in leaps and bounds
Several years back the Nikolic family announced FSG’s intentions to strengthen its footprint in SADC countries where the group currently operates before setting eyes on new markets.

At the time Nikolic expressed the company’s plans to increase its market share locally, in Zambia, Zimbabwe and South Africa ahead of making new initiatives to swell their pan- African presence.Currently BIHL group holds a 36.38 percent stake as they come through its subsidiary – Botswana Life Insurance Limited.Other shareholders include Flip Coin (Pty) Limited, a company owned by the Nikolic family which has Tebelelo Seretse, Patronella Matumo and Kate Maphage as partners.

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