The money went to not more than eight people. But finding out what happens to the money after it leaves the country is doubly difficult, firstly because the “disbursements” where allegedly done in mainland China, and secondly because it was done secretly away from the DIS and DCEC’s of this world.
As an unqualified Botswana Development Corporation (BDC) Managing Director, all Maria Nthebolan had to do was establish a mystery company, Fengyue Glass Manufacturing Company (Botswana); form a stand-alone Board and shut the increasingly inquisitive BDC Board from digging their noses into the Palapye glass project.
That worked, but the plan to loot BDC had been set in motion by Kenneth Matambo the finance minister’s whose decision to “impose” an unqualified Nthebolan on BDC Board overlooking experienced candidates for BDC MD job two years earlier.
This forms part of a trail of alleged scheming at the heart of BDC’s flagship glass manufacturing project in Palapye. “They lined their pockets. They know themselves,” a former BDC employee with knowledge of the scheming revealed this week.
The allegations were partly supported by recently released report by a Parliamentary Special Select Committee on BDC glass manufacturing project that faults Matambo, Nthebolan, James Kamyuka and Sametsi Ditshupo for defying basic corporate governance at the country’s largest investment arm. The report however omits key details such as how BDC management explicitly benefitted.
However, the source names a highly secretive scheme in which some BDC managers led by Nthebolan and one William Wu Mong Seng of Shanghai Fengyue Glass Company, a mystery offshore entity registered in the British Virgin Islands (BVI) agreed to form a local company, Fengyue Glass Manufacturing (Botswana) in 2007 to buy raw materials in China at inflated prices.
The 50/50 percent partnership meant that BDC “deliberately” exceeded the US$35 million quotation to a record US$74 million. BDC has never been particularly transparent in its dealings. Rather than sourcing raw materials directly from Chinese manufacturers, Fengyue
Glass Manufacturing Botswana, engaged Shanghai Fengyue Company for its Palapye flagship project. Its status as a company limited by shares meant that it can do business outside the purview of BDC, but strangely relied entirely on BDC for capital injection, while BDC Board was left in the dark.
As the BDC board began to question BDC management decision on Fengyue Glass Manufacturing Botswana, Nthebolan and her team found a way to sidestep bureaucracy and accountability and speed up her dealing with Shanghai Fengyue Company BVI.
They formed a stand-alone Board for Fengyue Glass Manufacturing Botswana, effectively locking out BDC Board. “They closed us out of the glass project and opened doors for money to flow out to China,” a disturbed former Board member recalls.
Legally, Fengyue Glass Manufacturing Botswana was a company separate from BDC and that made it impossible for BDC Board to monitor its business. Nthebolan who was not available for comment quickly assumed the Board chairmanship. But much of the dealings with Shanghai Fengyue defied basic principles of corporate governance.
Armed solely with a share certificate, Wu Mong Seng had convinced BDC that he would deliver highly sought after float glass plant and help diversify the diamond led economy by creating the much needed jobs for over 1000 Batswana. But a year later Mong Seng ended up in BDC payroll, earning over P92 000 before deductions.
Data sourced from the parliamentary report shows that Shanghai Fengyue Company from BVI somehow won a US$34 905 million tender to “build a brand new float glass production line.”
However, the quotation would mysteriously become bloated to include other unplanned considerations such as training and technology royalty, which costs P41 million and P18 million respectively. It is not clear what technology royalty entails. What is clear is that it also helped to drive the contract price to US$73 905 million. Nthebolan response to request for additions in the quotation has been exceptionally ponderous. A source quipped: “They divided themselves and benefitted. The scheme involves getting the market.” Disbursements where allegedly carried out secretly in China and proceeds channeled to offshore accounts.
It is not clear how many times Nthebolan and her team visited the Asia giant on “business trips” disbursement reached as far as Canada and Australia. Quite queer, while Shanghai Fengyue was registered in BVI, proceeds to the project went to China and Fengyue Glass Manufacturing (Botswana) used BDC offices for administrative purposes.
“This is strange. These guys are in a joint venture, but they are also suppliers of raw materials and EPC contractors. Everything is done in China, not Botswana or the BVI,” a disturbed former Board member added. Botswana Guardian could not independently verify the claims, and efforts to contact BDC management drew a blank.
William Wu Mong Seng
When terms of Joint Venture were negotiated between Shanghai Fengyue, Wu and other briefcase investors broke out and established Shanghai Fengyue company (BVI), according to their lawyer, Jack Hajibey.
Together with Qian Weihao the directors convinced BDC in July 2007 to establish Fengyue Glass Manufacturing Botswana. Wu has received several benefits from BDC and Fengyue Botswana including a basic monthly salary of P60 000. Standard Chartered Bank of China raised eye brows when Wu’s account was credited with US$1.5 million and inquired with their African counterparts to no avail.
Known as “Styles” because of his fast-lane lifestyle, Hajibey is said by several sources within BDC to be a sharp Johannesburg lawyer and a tactical businessman. He met Wu Mong Seng in South Africa and their friendship blossomed.
He has been earning huge commission from Shanghai Fengyue as conveyencer for the briefcase company. However, payment to the tune of US$1.9 million (or P12 million) credited into Jack Hajibey trust account at Nedbank in South Africa provides a partial link to the money trail. Though he was slightly evasive this week when questioned about the P12 million in his account.
“It is simple,” he would say in a telephone conversation from his law firm in Johannesburg. “BDC had delayed funding and we had to use our money.
They had not paid us for 16 months,” said the attorney for Shanghai Fengyue Company BVI. Much like unqualified Nthebolan, his explanation was equally ponderous. Asked why the Chinese investors chose BVI to register a company that manufactures glass, Hajibey paused and said: “For tax reasons.
All companies are registered in BVI. That’s corporate planning.” He has been “severely” interrogated by the Criminal Investigations Department and is worried “politics” is defeating progress in Palapye. “All corruption allegation is bullshit,” he charges. He does not remember the amount Shanghai Fengyue spent during the delay but adds that the price was affected by a 30 percent cost overrun. “There are currency fluctuation issues. The Chinese have not stolen even one Pula from Botswana. That’s bull shit.”
Behind her infectious smile lies a smooth operator. This is the woman, Finance Minister, Kenneth Matambo was linked to. He “imposed” her into BDC. She flashed a middle finger to BDC Board when she formed a separate Board for Fengyue. “She closed the door on us. She opened the door for the Chinese,” a disgruntled formed Board member quipped. Listen to her trying to explain the source of P1, 009, 527 into her account in 2010 and have a laugh. Both Nthebolan and Baipidi- Maje sit on the Botswana Fengyue Board.
Ditshupo was not that influential at BDC but was long considered Nthebolan’s right hand woman. Her contract has not been extended this month despite management advise to the Board to consider renewal. In addition to her income, she received the sum of P304, 676 into her account from an unknown source.
Wilhelmina Baipidi- Maje who has been employed by BDC for only 18 months received P454, 640 into her account from an unknown source. She also received a payment of P1 048 379 into her bond account during this period, according to the forensic report. Both amounts were allegedly received from an unknown source.
Isaac Ntomola received P1, 036, 685 into his account from unknown source. Concerning the amounts, the Auditors said there is currently no link between the unknown incomes received into the bank accounts of the BDC officials and the Botswana Fengyue project.