The story that should not be published

President Ian Khama’s personal lawyer played a major behind-the-scenes role in the award of a disputed  multi-million Pula tourism land to a US billionaire with links to Wilderness Safari.

Promotive Investments a firm owned by multibillionaire, Paul Allen (Microsoft co-founder) was favoured in a controversial allocation of a lucrative tourism land in the Okavango Delta by Tawana Landboard and Botswana Tourism Organisation (BTO). The matter is now the subject of court action by leaseholder, Kwara. Confidential documents and a three-month investigation by Botswana Guardian revealed that Baedzi Baaitse Parks Tafa played a complex multi-faceted role in the process, which apparently had his law firm, Collins Newman and Company, advising BTO on how to deal with the concession, and then switching to a new role as legal advisor to Promotive Investments and finally joining Promotive Investments to become one of its directors, two months after his partner at Collins Newman and Company, Laurence Khupe had decided on the concession and allocated it to Promotive Investments without a tender.

Khupe was sub-committee chairman of BTO Investment Committee. Documents show that on the 22nd of April 2009 at a Board meeting, Khupe, allocated the management area classified as NG20 to the billionaire’s company without going through a tender after BTO management, led by outgoing Chief Executive Officer, Myra Sekgororoane requested for a direct allocation of the concession to a company that Tafa eventually had a business relationship with. A company search conducted by Botswana Guardian revealed that 65 days after the allocation, Tafa, along with Keith Vincent of Wilderness Safari were accepted as directors of Promotive Investments. Kwara, a subsidiary of Kwando Safari is owned by one of the wealthiest businessmen, John Mynhardt and measures 175 000 ha in the heart of the pristine Okavango Delta.

The concession is a money-spinning venture despite its steep annual rental and tax. It is understandable why Kwara is challenging BTO and Tawana Landboard for directly allocating the profitable land to Promotive. Collins Newman and Company represents BTO.

Khupe requested that it be placed on record that his business partner, Tafa was advisor to Promotive Investments, but did not explicitly declare during the same meeting that his partner was intending to become director at Promotive. Reached for comment, both Tafa and Khupe declined being drawn into the matter.
The elite law firm also provides legal counsel to the ruling Botswana Democratic Party (BDP) and Wilderness Safari. Wilderness is linked to Promotive Investments through its parent company, Vulcan. Vulcan owns Abu Camp in the Okavango Delta. The documents are among several hard hitting revelations that show the scale at which connected big league investors and BDP symphathisers play a complex role in the control of Botswana’s lucrative tourism industry.

Tourism contributes massively to Botswana’s economy, second only to mining. The sector contributed 12 percent to the Gross Domestic Product (GDP), in 2012 and is forecast to grow exponentially in 2013, according to figures from Statistics Botswana. Through Vulcan, Allen has an increasingly expanding influence over Botswana tourism industry.
His company, Promotive Investments, a subsidiary of Old World Properties, has links with Wilderness Safari and has preferred Wilderness Safari to manage NG20 on behalf of the US mogul, according to documents seen by Botswana Guardian. Tafa is currently chairman of Wilderness Safari Board of Directors, where Khama has five percent shareholding in Linyanti a concession owned by Wilderness Safari.

Perhaps even more important is the new role played by BTO in the control of prime tourism land. A plan to usurp pristine land reserved for tourism from landboards was hatched as early as 2008. Documents seen by Botswana Guardian show that on the 3rd of April 2009 a Department of Tourism savingram set in motion an elaborate plan to assume control of all management areas from landboards. Permanent Secretary in the Ministry of Wildlife, Environment and Tourism advised landboard authorities to hand over expiring concessions to BTO to allow the organisation to directly allocate concessions to investors who satisfy prevailing market trends and conditions. Landboard authorities were advised to treat the issue as an urgent directive. Expert consensus however, is that Department of Tourism was motivated by a bizarre attempt by Allen to pay government millions of Pula under mysterious circumstances. (See: Bribe or sweetener?).

Promotive concedes that it does not have experience in the hospitality industry and that it will rely on Wilderness Safari to manage the profitable concession in the heart of the Okavango Delta.

BRIBE OR SWEETENER

Before Khupe could directly allocate NG20 to Promotive Investments without a tender, Vulcan had hypnotised unsuspecting Sekgororoane and government officials.

Writing in February 2009, in a letter motivating the direct allocation of NG20 to Promotive, William McGrath, Executive Director of Vulcan described Allen as a visionary and a true conservationist. He said the billionaire has a vision to make the concession a multi-tier ecotourism offering in the mid to high-end of the international responsible tourism market. But some of Allen’s former bodyguards would cringe at McGrath’s claim. In Seattle, some former bodyguards have taken the billionaire to court saying he tricked them into smuggling giraffe bones out of Botswana.

In a confidential letter addressed vaguely to ‘The Government of Botswana,’ McGrath made a startling promise to “pay government the sum of P45 million in cash” if Allen is awarded the much sought after tourism land. Those who understand the economics of corporate acquisitions say that there was nothing sinister about the P45 million offer made by the US super-rich man. “It was not a bribe. Promotive was just sweetening those guys. It happens all the time in business,” a businessman with knowledge of the concession said with a smirk. The observer said the P45 million was part of a proposal to lease the lucrative land.

But others will argue that McGrath’s “sweetener” dated February 10th 2009 was remarkable in that it changed thinking within government and helped influence land tenure in the tourism industry. Seemingly inspired by McGrath’s hard-to-resist proposal, Deputy Permanent Secretary in the Ministry of Lands, Gaolebe Lekula moved swiftly to direct Tawana Landboard to hand over all tourism sites whose leases are expiring to BTO to decide whether to renew or advertise. This is how Mynhardt lost his concession to wealthy Allen, who is believed to eke out a living in Monaco, a magnet for wealthy people, thanks to its liberal tax regime.
Those closer to the disputed concession  say history of the lucrative land dates back several years.

With only two years before expiry, Mynhardt,  “miscalculated” expert advise from Sekgororoane and then Minister of Environment, Wildlife and Tourism, Kitso Mokaila’s not to purchase Kwara from Mark Kyriachao for about P35 million. Kyriachao of Bird Safari had initially resisted a US$6 million (about P48 million) offer from Tafa on the 17th of July 2008.

CONFLICT OF INTEREST

Interlocking directorship has been a subject of discussion over several years. Perhaps even more fascinating to corporate governance scholars was Tafa’s seemingly ‘tripartite’ business relationship with Promotive Investments, BTO and Wilderness Safari. With Promotive and Vulcan, his relationship dates as early as March 2007. Tafa and Khupe did not answer questions put to them individually as their lawyer, Dineo Makati-Mpho complained bitterly that “many, if not all” questions posed by Botswana Guardian relate to NG20 and may influence outcomes of the proceedings in court. Wary of not being in contempt of court, for about eight weeks Botswana Guardian repeatedly asked Tafa and Khupe to verify information that is already in public domain such as Tafa’s directorship at Promotive and chairmanship at Wilderness Safari.

Documents sourced by Botswana Guardian from the Registrar of Companies are explicit that Tafa was at one point director of Promotive. The documents also reveal how the directorship at Promotive changed from Kabelo Abueng and eventually to the likes of Keith Vincent, Keshavjee Ferina Illyana and Tafa on the 26th of June 2009. Other notable faces in Promotive directorship included Vincent Seretse Tinah of RPC Data and Matone Joseph Malope.

Khupe ignored questions filed in September by this publication as to whether he was aware that his partner had a business relationship with a firm BTO awarded a concession. Instead, Tafa and Khupe’s lawyer threatened an urgent interdiction if an article was published about her clients.

PAUL THE PHILANTHROPHIST

Vulcan front office desk employees are notorious for strict adherence to orders. Vulcan has a diversified portfolio with more bias in improving technological advancement, according to its website. The company deals in sport, museum, advances Allen’s philanthropic endeavours, real estates and science. Vulcan Capital is an investment arm of Vulcan Incorporated and manages Allen’s property and other assets. A source close to Promotive Investments said the company is committed to wellbeing of Botswana and made its decisions based on “professional advice based on existing laws.” He said Vulcan and Promotive were of the view that NG20’s fair market value should be around P45 million.

WHO IS PAUL ALLEN?

With a net worth of US$15.8 billion, an equivalent of Botswana’s Gross Domestic Product (P130 billion), Forbes magazine September 2013 issue places Allen among top 26 richest people in the world. He owns Old World Properties, which owns Juno Properties in Luxembourg Sarl. He is a sole shareholder of Quirinal Properties, which owns Juno. Quirinal Properties Sarl is a parent company to Promotive Investments. The first questionnaire sent to Vulcan on the 17th of September was ignored. After several mail and telephone follow ups, Vulcan Corporate Communications Associate, James Larsen made an undertaking to return to Botswana Guardian, but has since ignored several calls and several other emails over the past weeks.

Last modified on Monday, 18 November 2013 09:13

BG Calendar

« December 2018 »
Mon Tue Wed Thu Fri Sat Sun
          1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31