Government’s funding agency- CEDA - has skilfully manoeuvred its way to reclaim the majority shareholding of the country’s only steel plant - Pula Steel.
Had this not happened, the plant would have gone under the hammer together with its former parent company -BCL- when the latter was placed under provisional liquidation. Not only has CEDA taken control of Pula Steel, but it has appointed an audit firm, Grant Thornton to appoint qualified personnel to executive management as well as to do status records with the aim of reporting any wrongdoing to the law enforcements agencies.
The appointment of Grant Thornton to probe Pula Steel is the second following the appointment of another audit firm, Pricewaterhouse Botswana, to investigate BCL investment into the company by Minerals Development Company Botswana (MDCB).
The multimillion Pula plant has never operated since the shareholders invested in it. It was hoped it would start production after dilution of the BCL shares following a new capital call.
The shareholders set the date for production of the much in demand billets for 1st February 2017, but that was postponed to ensure the atmosphere was conducive for production including paying the employees outstanding salaries for December and January. Last week the plant employees decided to take the law into their hands by locking their CEO and Investor, Ranvir Kumar Verma inside the plant as they demanded to be paid their salaries as well as the removal of the Verma family from key managerial positions.
The situation calmed down after the intervention of Thabo Thamane, the chief executive of CEDA who assured them that they’d receive their dues as investors have injected new capital. Botswana Guardian investigation has established that the latest capital call of the Pula Steel which saw all the shareholders, except for BCL, injecting capital in order to save the company from collapsing, elevated CEDA to the majority shareholding at 49 percent after they bought equity. This automatically diluted BCL from 64.5 to 22 percent shareholding. Other shareholders are the Verma family and a citizen-owned company, Wealth Generation who own 23.5 and 5.5 percent respectively.
BG News has it on good authority that although BCL was represented at the board meeting when capital call was made, its representative, Nigel Dixon- Warren, who is the provisional liquidator, could not commit BCL as he does not have the mandate to either sell or buy on behalf of the company. It is said that the total capitalisation of Pula Steel is P29 million, and when CEDA bought equity, they did not only become the majority shareholder, but they took control and proposed to other shareholders that a management company should be appointed at Pula Steel.
BG News has learnt that CEDA has appointed a local audit firm, Grant Thornton which started last December. The first assignment of the latter was to do status records, meaning that the audit firm was mandated to scrutinise every document to ensure that all is in order. Part of the conditions that CEDA has set is that should Grant Thornton’s findings reveal any transgression when they scrutinise Pula Steel, then CEDA will refer such infractions to law enforcement agencies such as DCEC and others. CEDA has also proposed that Thornton should help to find suitable personnel for the positions of CEO, Chief Financial Officer and Technical Manager for Pula Steel.
BG News has established that the meeting that the CEDA did not attend led to their shares being diluted to 5.5 percent as they had not injected any capital. The same meeting led to BCL majority shares increasing to 64.5 percent, while Verma family went high to 23.5 percent with Wealth Generations staying at 6.5 percent.
BCL provisional liquidator, Nigel Warren- Dixon could not say much save that, “I am aware of what is taking place at the Pula Steel board because I sit there in my official capacity as provisional liquidator representing BCL. But, I am unable to discuss because Pula Steel is a private company and discussing such matters with other parties will be a breach of my duties in accordance with the Company’s Act.” The CEO of CEDA Thabo Thamane could not be drawn into much discussion but confirmed that Pula Steel will turn around and CEDA is committed to ensuring that jobs are protected and even more will be created as the plant operates.
Economic analysts say the budget presented by Finance minister, Kenneth Matambo this week is vulnerable to external trade shocks hence the country must speed up economic diversification drive and widen the revenue base.
Speaking during the FNB 2017/18 budget review meeting this week, First National Bank research manager, Moatlhodi Sebabole, said the biggest source of government revenue is mainly minerals and Southern African Custom Union (SACU) however, the two were susceptible to external shocks.
“The composition of our budget for the past six years is that almost 60 percent of its revenue is coming from SACU and minerals and it’s a weakness that needs to be addressed,” said Sebabole. He said the budget is also focusing to get more revenue from SACU than minerals and against that background, it means the country is at the mercy of recovery of international trade and of South Africa, which contributes almost 90 percent to the customs union. Sebabole added that if South Africa does not do more international trade outside the SACU bloc, Botswana will face budgetary headaches.
“Last year South Africa didn’t do well on the international trade because of the low commodity prices and we didn’t collect much from SACU. If you are presenting a budget that says that the majority (revenue) will come from SACU, it means the external vulnerability will very much hit us,” he said.
Sebabole also highlighted that diamond sales depend almost 60 to 70 percent on the US market, and this also presents a challenge if the market crumbles. The economist reiterated that Botswana is predominantly a mineral dependent economy, and there is need to diversify the economy and widen the revenue sources. He expressed concern why Botswana is not getting much Foreign Direct Investments as compared to other countries in the region despite the country being stable and receiving many international accolades for being the safest country to invest.
Sebabole said it beats logic how a country like Mozambique is getting the lion’s share of the FDI inflow into the region yet the country is not politically stable. “We should look at our regulations and business environment and see how best we can attract foreign direct investments,” he pointed out.
Speaking at the same occasion, FNB Chief Executive Officer, Steven Bogatsu, said the global economic instability of 2016 hurt most economies. “On the home front, the ripple effects of the closure and liquidation of companies such as BCL will manifest this year,” said the banker.
Against the background of uncertainty, Bogatsu said there is need to cautiously remain optimistic. “We need to put up strategies .....and the key to the success of these strategies lie in dedicated implementation of the strategies. The key to successful strategy implementation is to step out of the ivory tower and look at what Batswana are saying on the ground,” said the CEO. He said there is need to equip the SMMEs with knowledge and skills that they need to better manage their businesses and catalyse and stimulate the economy.
The President of Botswana Public Employees Union (BOPEU), Masego Mogwera has said that contrary to finance minister Kenneth Matambo’s assertions, job creation is indeed the responsibility of government.
In his 2017/18 budget presentation this week Monday, Finance and Economic Development minister Matambo said, “with regard to employment creation, it is important to clarify that the principal role of Government is not to create jobs directly, but to provide a conducive macroeconomic environment to facilitate the development of the private sector.” Mogwera said BOPEU vehemently rejects this proposition and characterises it as an abdication of state responsibility.
She told members of the Press that the latest stance by government on job creation violates the principle of decent work which pursues employment creation as one of its priority areas.
Last year when presenting the budget for 2016/17, the Minister conceded that unemployment, especially among the youth, is one of the development challenges facing this country and to address this, “government has resolved to, among others, use its spending power to boost economic growth and create jobs in the country.” Matambo said at the time that in addition to seeking value for money in spending government budget, efforts will be made to “ensure that such expenditure, whether under recurrent or development budget, contributes to job creation in the country”.
He added, “Some of the economic activities with potential for creating employment opportunities, which government will be undertaking during 2016/17 include; infrastructure backlog eradication, road networks and maintenance, wildlife and tourism initiatives, continued implementation of EDD initiatives, creation of Special Economic Zones, as well as regulatory reforms and improving efficiency.”
Mogwera said as BOPEU they concur that government should create a conducive environment for the private sector to create employment. “However we are of the view that Government has a direct responsibility in job creation without necessarily ballooning the wage bill by identifying strategic sectors such as tourism and mining with a potential for employment creation,” she said adding that the government should retract the statement and reconsider its position.
“The 2017/18 budget speech statement on the role of government in job creation and the 2016/17 budget speech employment creation strategies are a big contradiction,” she said.
After 40 years in politics, Member of Parliament for Mahalapye East Botlogile Tshireletso will resign from active politics, she has told Botswana Guardian.
The plan, she says, is to consult her constituents and the entire democrats in May this year. Tshireletso says her journey in active politics has been a learning curve full of ups and downs. Perhaps her number one observation is that women are refusing to stand and campaign. She says women feel intimidated by men and are not courageous.
“Politics is not for the faint-hearted, and if you are not bold, you are going to quit prematurely,” she says. She says women list, among other issues, not understanding how to balance family with politics, handling the pressure of being insulted by other politicians, and the tendency where people dig others’ past to de-campaign them. She says women can be each other’s worst critics. “In politics, there is no respect. Whether you are young or old, they will bash you.
I have been condemned for my not-so-good English and not being an intellectual, but I stood firm and served my country,” she says. Her main worry, she explains, is that she does not see women coming forth from her constituency to stand in 2019. “When I joined politics at the age of 24, I knew what I was getting myself into,” she says, urging women in politics to grow a thick skin.
A free spirit, Tshireletso says that being in the executive committee has limited her from talking about ‘some issues’ that she believes must be challenged. “That’s where policies are made and one feels limited sometimes,” she says, without wanting to divulge much.
The MP has often caused mixed reactions over her sentiments that abortion should be legalised. While some people see the view as a welcome gesture for women that are not ready to be mothers, or those that did not plan on having more babies, others feel Tshireletso is encouraging murder and irresponsible behaviour.
But she has remained unfazed. “I find it pointless that a woman should be forced to keep a child she does not want, only for her to turn to unprofessional personnel for help or resort to throwing the child in dustbins immediately after birth.” She says should a legal clinic be made available, clients will be counselled and attended to by trained professionals.
Her next move
Tshireletso says that she wants to ‘relax outside politics’ while still in Botswana. She says that she will fully get engaged on her new foundation that aims at mentoring young men and women who want to venture into politics. Under this initiative, her mentees would get to appreciate that politics is not about money but national service. “A lot of them get frustrated along the way because they get broke.
Their expectation is that they will become rich and when it does not happen, they become bitter and miserable,” she says. Additionally, she will use her retirement to assist the vulnerable in the society. She is confident that she was born a leader. Meanwhile, Tshireletso is the president of Democracy and Human Right Committee of the International Parliamentary Union (IPU).
It was something that needed to be done; at least before the formal opposition talks began. A genuine camaraderie between the leaders was needed to pave way for the formal opposition unity talks. After weeks of planning, postponements, off-course deviations and frustrations, the time was perfect for the retreat. The silly political season was in recess; everyone was preoccupied with the festive season; the social-media political pundits were on a break.
For the leaders of the country’s major opposition political parties, the holiday period offered an opportunity to ‘sneak out’ of the country to begin what is often known as ‘talks before talks’ in the political circles. Botswana Movement for Democratic Change’s leader Ndaba Gaolathe was in South Africa and so was the Botswana Congress Party’s leader Dumelang Saleshando. For the Botswana National Front and Umbrella for Democratic Change leader, Duma Boko, it was just a matter of few hours’ drive to this secret place. Motlatsi Molapise of the Botswana Peoples Party had delegated senior party official Richard Gudu. The leaders did not bring their spouses along.
The Protea Hotel Ranch Resort in Polokwane was a perfect getaway for the four leaders. And over the next three days, from December 28 to 31, it offered everything that Gaborone could not offer. It offered secrecy. Situated 25km south of Polokwane, the four-star hotel comprises 1000 hectares of pristine Limpopo province bush-veldt, according to the hotel’s website. The meeting was off the radar from curious journalists, anxious party members and snooping intelligence agents. The financier of the retreat was a Gaborone businessman sympathetic to the UDC project.
The ‘escape’ to Polokwane was well managed. The retreat did not leak, at least for a couple of months after the event. Not even senior party members of the parties involved were aware of the retreat. The men tasked with coordinating the retreat, the UDC’s spin doctor-in-chief Moeti Mohwasa and BCP’s presidential spokesperson Martin Dingake did not give away the game either. The secret meeting was well kept. The two men also attended the Polokwane retreat and worked together on the retreat’s programme though it was never followed to the letter, instead being interwoven with a more informal approach.
For the first time the leaders of the four parties learned to “hang out” with each other more informally, shared jokes and played sport. The attire was casual, and so was the language. It was however the game of table tennis that broke the ice between the four leaders and paved way for more formal talks the following day.At a press conference to announce the opposition deal, Saleshando and Boko referred to the Polokwane retreat as a defining moment for the opposition talks, albeit succinctly. Saleshando joked about how he emerged triumphant during a table tennis match between the four leaders. For his part, Boko conceded that as a former amateur footballer he had not played table tennis before and was handicapped during matches.
Only Saleshando and Gaolathe were familiar with the sport and took turns to coach other leaders. The table tennis matches dragged on for hours, at one point lasting the entire afternoon. The epic match was between Gaolathe and Saleshando. It was epic in the sense that the two men had played the sport before. Their match was highly contested. In the end Saleshando won. T
he leaders and their trusted aides, also watched English Premier League matches together in the hotel lounge. The leaders supported different EPL teams. For example, Duma Boko supports Manchester United, Ndaba is a Liverpool fan, while Saleshando is a Chelsea fan. Besides sporting activities, the leaders visited places such as the Mall of the North, Tzaneen and drove around the city of Polokwane.
After a day of sport, jokes and laughter, the leaders finally sat down on the 30th of December to agree on the principle of cooperation. The meetings were highly informal in nature and structure.
The underlying principle that the leadership adopted was to come together and work for the common good of Batswana. This principle defined the way forward. Boko directed and led the discussions. It was at the table and during the discussions that differences and even new alliances emerged. It was here that Boko and Saleshando found each other. The two agreed on several issues.
Gaolathe and Gudu were in some cases on the same corner, though not too distant from the overall conversation. For example, Gaolathe and Gudu initially wanted BCP to apply for the UDC membership, while Saleshando and Boko felt that the four parties should engage in direct unity negotiations. The other issue concerned the inclusion of the mediators. Boko and Saleshando were for self-mediation while Gaolathe and Gudu felt that outside mediators should be engaged. The participation of the retreat organisers, Mohwasa and Dingake was limited.
At the end, a ‘deal’ was reached, a foundation for the talks was laid. While the four leaders may not want to readily admit it, it was at the Polokwane retreat that the cooperation principle was agreed upon. Everything was sealed at the Polokwane retreat. The name UDC+ was initially proposed at the Polokwane retreat. The model of constituency allocation was also agreed. When the negotiation teams sat down to start formal negotiations they were ratifying what was agreed by the four leaders in Polokwane.
After three-day outing, Saleshando and Gaolathe left together in Saleshando’s car, while Boko left with his right-hand man Elliot Moshoke (who played no part in the talks). Richard Gudu and Mohwasa used the same car, while Dingake used his own car. This week Mohwasa confirmed the Polokwane meeting but stressed that the meeting was for the four leaders to lay the foundation for the talks noting that “Myself and Martin (Dingake) were merely there to facilitate and we didn’t take part in the discussions.”
Disagreements between attorneys at law and Judicial officers is far from over and could throw the judiciary into the third year of crisis, Botswana Guardian has observed.
The judicial crisis has been experienced in the past two years with both sections at each other’s throats over processes and procedures and professional conduct. Anticipation has been that given the two-year ‘war’, 2017 would be a different one. However, as things played out at the commencement of the legal year on Tuesday this week, it was evident that the duo still lives in different worlds.Attorneys at law represented by Law Society of Botswana (LSB), judges represented by Chief Justice Maruping Dibotelo and judicial officers supported by Attorney General on behalf of government sang opposing tunes on the state of the country’s judiciary. The only issue that the trio found common ground on was the resolution of forum shopping.
As for appointment of judges, dispensation of justice (timeline for completion of cases and delivering of judgement) and government’s reluctance to review the Legal Practitioners Act, views remained divergent. The society this week through its Chairman, Kgalalelo Monthe has once again stated that Judges should be appointed on merit as well as integrity and suitability of character and temperament.
He explained that knowledge of the law, the balance of mind, the ability to brush aside the inessential and drive to the heart of a case are crucial. The work of the judiciary is too important to entrust to those of doubtful competence and a bad Judge may do irreparable damage since there are some judicial errors which even the most elaborate system of appeals cannot remedy. “This is particularly so because bad Judges are capable of shaking public confidence in the judiciary,” said Monthe.
Even though Chief Justice Maruping Dibotelo has indicated that through the Judicial Case Management Committee chaired by Justice Tafa there has been some improvement, LSB tells a different story. Dibotelo has stated that timeframes for completion of cases including the delivery of judgements are generally being observed. He said where non-compliance was observed; oversight mechanisms for redress have been put in place. The society however says many legal practitioners; litigants and accused persons have a different story to tell. Monthe revealed that the Society has therefore resolved to create measures to name Judges whose judgments are delayed beyond the 90 days from the time that the matter is concluded. The 90 days is a measure that the High Court has set for itself for delivery of judgments.
According to Monthe, the Society will publish details of the cases indicating dates when the matter was concluded as well as the name of the concerned Judge. This statement could be observed to have sent some elements of displeasure and distaste among judges and magistrates who attended the legal year opening.Another matter which the LSB is not pleased with, is the participation of the chief justice in cases where he is a party.
The Society has ongoing litigation with the Judicial Service Commission (JSC) on issues relating to its mandate, said Monthe adding that they have expressed concern that in such cases, it is either the Chief Justice, who is Chairman of the Commission, who empanels the bench to decide a matter in which he is a party.
The society says this practice is wholly unsatisfactory as it creates a perception of conflict of interest. “Similarly, the Society notes that in appeals in which the Judicial Services Commission is a party, the Judge President (Ian Kirby) who is a member of JSC, empanels the court to hear a matter despite being a party. Again, this creates a perception of conflict of interest. At the ceremony of the Opening of the Legal Year in 2016 the Society announced that it intended to launch litigation challenging the then recent appointment of one of the Judges of the Court of Appeal. Indeed, the Society went ahead and filed a Statutory Notice in terms of the State Proceedings Act,” he said.
Monthe revealed that whilst the Society was yet to proceed with the action, the announcement caused quite some agitation to the extent that Kirby publicly called “our then Chairman ‘rude’ and offered a public apology to the affected Judge”. He said it was surprising that Kirby included the said Judge in all three (3) appeals of the LSB during the just-ended session. This also seemed to have caused a stir as the chief Justice warned Monthe to wrap up his address since he had run out of his allocated time.
The tension could be felt within the two courtrooms which were used for the proceedings of the day. The LSB chairman would however not call it a day without responding to Kirby’s utterance over separation of powers at the opening of the just-ended court of appeal session.
LSB has questioned the value these comments brought. Monthe said their hope is that whatever the intention was it has not been achieved. The Society notes that if the credibility of the Judiciary in Botswana is to be ensured episodes such as these need to be avoided at all costs, he argued.“The Society believes that the role of the Court of Appeal is to interpret the law in order to ensure clarity and certainty. Its role is not to provide a “stabilising factor” as stated by the JP. This role as envisaged by the JP sends a somewhat chilling and sinister message to those who litigate against the Executive and Judges who preside over the matters”.
Acting Attorney General Morulaganyi Chamme with a mediatory tone called for respect and professionalism when handling differences. He said there is nothing wrong in addressing the issue of appointment but it would be a problem when an individual is targeted and addressed specifically. Attorney cum politician, Duma Boko told Botswana Guardian at the end of the proceedings that it is evident that the judiciary is still in crisis. He said the issues of lack of transparency and accountability in relation to appointment of judges has been persistent.
He revealed that the Chief Justice conveniently sidestepped on the issues of concern but “fortunately the Law Society brought them back into the fore-ground.”“One hopes that from today issues as ventilated by LSB chairman will occupy centre stage and society (public) will reflect on and debate these issues robustly going forward and come up with lasting solutions.” In his response to last year’s State of the Nation Address, Boko who is the President of Umbrella for Democratic Change and Leader of Opposition in Parliament, called for intervention to rescue the Judiciary. He said from the perspective of the UDC all institutions of society including the judiciary will undergo reform to ensure they best serve Batswana.