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MASISI, KHAMA'S DAY IN COURT IMMINENT story on pageS 03
war erupts over P30m cheque at letlole Bibliophobia, or disinclination to read, could lie at the heart of a rift between the CEO of Letlole and the chairperson of the board of the property company who may have appended her signature to a document with massive financial implication without a full grasp of a critical clause therein. Staff Writer KITSO DICKSON reports. story on pageS 12
Minchin & Kelly attorney caught lying under oath story on pageS 05
INSIDE Alcohol and tobacco ban cost BURS P120m
Kalahari Offers Diversification Solution
KBL TO CUT STAFF SALARIES
Botswana government has lost out on a staggering P123, 138,165.31 in alcohol and tobacco levies and excise duties in just one month during lockdown, the BURS has confirmed. In a written response to enquiries sent by this publicatio...PAGE 04
Diversification has been classified as a dire need, especially now that the diamond market has fallen terribly. MSA Group Consultant, Mike Robertsons, says the diamond dependent economy of Botswana can salvage on renewed exploration interest in the Kalahari....PAGE 07
Kgalagadi Breweries will effect a 10 percent salary cut for all its staff members because the company has accumulated significant losses for more than two months as a result of the government’s ban on the sale of alcohol...PAGE 13
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BOSETU, PS at loggerheads
A war is brewing at the Ministry of Basic Education (MoBE). At one end is the Permanent Secretary who has alluded to the return of school heads, their deputies and HODs to classroom teaching and her belief schools that have the capacity to match huge class sizes and a workable student-teacher ratio. On the other end is BOSETU, the teachers’ federated trade union that falls just short of saying Bridget John is hallucinating. Staff Writer KABO RAMASIA narrates
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he Permanent Secretary (PS) at the Ministry of Basic Education (MoBE), Bridget John, has hinted at the possibility of the entire hierarchy of school management returning to teaching. However, the Botswana Sectors of Educators Trade Union (BOSETU) have characterised John’s utterances a complete shock. In her assessment, the PS considers schools to have sufficient capacity to deal with
the student-teacher ratio because teachers in management don’t teach. She wants to explore the possibility of this lot returning to the classroom. The PS was talking about the management category in schools. As learning institutions, public schools are overseen by school heads, their deputies and Heads of Department (HOD) who at secondary school level don’t have classes because they perform administrative duties and provide
oversight. While this position suggests a modification of this cadre, BOSETU wants a similar type of supervision extended to primary schools. Addressing the media early this week, the PS made some statements that did not sit well with BOSETU. “The teacherstudent ratio in Botswana is low and I want us to distinguish it from large class sizes,’’ John said. She cited a World Bank study according to which the teacher-
pupil ratio at Botswana’s primary schools 1:22 while it is 1:12 for secondary schools. “We have a lot of teachers,” she said. “What happens is that some of them don’t teach. For instance, HOD’S, deputies and school heads. Going forward we will review (to see) if their workload allows them to teach.’’ This prompted a response from BOSETU that described the words of “the accounting officer at basic education” as ‘‘disturbing’’ and removed from reality. “BOSETU is very much disturbed … by yet another sentiment which in our view was not well thought out by the Permanent Secretary to the effect that there are a lot of teachers who are not teaching in schools, and in the process, making reference to school heads their deputies and heads of department,’’ wrote BOSETU the union’s Secretary General, Tobokani Rari, wrote in a statement. “This goes a long way yet again to show how detached the PS is from realities of the sector she heads.’’ Although a bit fuzzy, the position of the union indicates some concession on this point and considers it a welcome development. However, BOSETU wants a similar type of fairly untrammeled supervision extended to primary schools. “We … advocate for the same to be done for this category of management at primary schools,” the statement said. “Therefore, for the PS to somersault on such a progressive decision and assert that this category of employees can also take up classroom teaching duties without stating whether the premise on which they were relieved of such duties has changed or not is regrettable.’’ wrote Rari. Further, BOSETU considers it “misleading” for the PS include the management cadre in teachers’ numbers so as to defend her position on Botswana’s student-teacher. “To include them in the count of number of teachers for purpose of concluding a misleading declaration on student-teacher ratio is even more unfortunate,” Rari wrote. “The PS should further respect that for school heads, deputies and HODs not to be currently teaching is a matter of policy and is embedded in their Job Effectiveness Description (JEDs), and as such she cannot just … announce such drastic changes in employees’ job content and conditions of work without engaging in a due process.’’
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MASISI, KHAMA'S DAY IN COURT IMMINENT If the defence has its way, President Mokgweetsi Masisi and his predecessor will appear in person as witnesses in this case that forms a part of
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corruption trials that observers have characterised as the white-collar crimes that defined the Khama regime. Staff Writer KABO RAMASIA reports.
KABO RAMASIA Staff Writer
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efence lawyer Kgosietsile Ngakaagae’s subpoena application to have former president Ian Khama, President Mokgweetsi Masisi, former minerals minister Sadique Kebonang and almost the entire executive of the Khama administration testify in the ongoing P250 million National Petroleum Fund (NPF) case will be determined next week, The Business Weekly & Review has established. The application is before Judge Godfrey Radijeng and revolves around Ngakaagae’s client, Bakang Seretse, who is the key accused person in this case that has captured the public
imagination, not least for the stature of the people sought as witnesses and the breathtaking amounts of money involved in the course of an era when government became synonymous with corruption. Through his lawyer Ngakaagae, NPF accused Seretse has sought to have the forfeiture application before Justice Radijeng converted into a fully blown trial to allow state actors to participate in it by giving evidence on the allegations made by the state. When court heard the matter earlier this year, defence lawyer Ngakaagae made an argument that material disputes of facts that arise can only be resolved by way of a trial. The defence team has argued that the P250 million money laundering and
racketeering charges that Seretse and other accused persons face were originated by government through the Directorate of Intelligence and Security Service (DISS). Seretse’s lawyer argues that the P250 million DISS/Dignia Services procurement which the state alleges Seretse and Co. diverted funds through was authorised at the Office of the President and sanctioned by the Defence Council which former president Ian Khama, then Vice President Mokgweetsi Masisi, former PSP Carter Morupisi, DISS Director Kgosi and the heads of the army and the police were members of. Against this background, the defence lawyer representing Seretse posits that assets subjected
to the forfeiture by the state are not proceeds of crime. On the other hand, state prosecutor Ernest Mosate opposed the application. According to Mosate, there is no need for witnesses in this case as the use of affidavits is sufficient for the trial to proceed. However, the state has agreed that a few government officials could give evidence. This includes former head of DISS Isaac Kgosi, former minerals acting PS Dr Obulokile Obakeng and the NPF Management Committee. In response, the defence rejected the proposal by the state, maintaining that it would lead to an irresoluble dispute of fact, should the court agree with the state. This publication is reliably informed that at first the
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state claimed no knowledge of the Israeli/Dignia Services transaction that forms the bone of contention. In another twist of events earlier in March, the state added Kgosi, whom they had first identified as a key witness, to the list of accused persons. A source has told this publication that Kgosi is accused of not involving the Botswana Defence Force (BDF) when procuring military equipment from Dignia. The Business Weekly & Review has been reliably informed that the BDF has since filed an affidavit to the effect that DISS took the transaction from them. This publication has seen a to page 07
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Alcohol and tobacco ban cost BURS P120m SONNY SERITE Guest Contibuter
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otswana government has lost out on a staggering P123, 138,165.31 in alcohol and tobacco levies and excise duties in just one month during lockdown, the Botswana Unified Revenue Services (BURS) has confirmed. In a written response to enquiries sent by this publication, BURS General ManagerCommunications Mable Bolele disclosed that BURS has noted the economic impact that came with government’s decision to ban the sale and importation of alcohol and tobacco products two months ago as one of the regulations aimed at fighting the spread of the Corona virus. BURS has realised a drastic reduction in tax collection that is often derived through levies and excise duties on alcohol and
tobacco products that normally come into the country through gazetted points of entry and then sold locally at regulated and licensed outlets. Bolele’s revelation surpassed this publication’s earlier report which had put the estimated loss at P24 million over a period of two months. According to the BURS spokesperson, the P123, 138,165.31 was lost in just one month, April when the ban was put into effect. Bolele has disclosed that BURS registered 757 percent decrease in April on Alcohol levy alone. This percentage represents the total difference of P139, 401,630.76 which was collected in March against a paltry P16, 263,465.45 collected in April on levies and excise duties of both alcohol and tobacco. The alcohol levy was P79, 838,854.71 in March but dropped to P13, 941,290.50 in April due to the ban. The decrease amounted to
P65, 897,564.21. Tobacco levy decreased by a staggering 505 percent in April following the ban. Whereas BURS collected tobacco levy of P11, 356,978.60 in March, only P1, 877,554.10 was collected in April. The decrease on tobacco levy amounted to P9, 479,424.50 or 505 percent. In addition to the levies on alcohol and tobacco, the two commodities registered a further loss in excise duty amounting to P47, 761,176.60 or 10742 percent. Botswana is among the few countries that have banned the sale of cigarettes and tobacco products as one of the measures to fight the spread of the Corona virus. South Africa is one of the SADC countries that have banned the sale of cigarettes while other neighbouring countries such as Namibia and Zimbabwe have allowed for the sale of cigarettes and tobacco products.
Namibia Health Minister Kalumbi Shangula has defended his government’s decision not to ban cigarettes and assured that his country will not 'copy' neighbours South Africa. According to the Namibian Sun, Shangula was responding to questions on why Namibia did not implement a cigarette ban to reduce the spread of the coronavirus. However, Shangula reportedly argued that Namibia is a unitary state and that it will make decisions that are in the interest of its people and which will not disadvantage the economy of the country. He argued that cigarettes do not pose the risk of spreading the corona virus. “South Africa has banned cigarettes and we did not. Namibia has banned alcohol, Angola not. Everyone considers in their country what is the risk’’, the Health Minister is quoted by the Namibian Sun.
BOSETU says education secretary misled the nation KABO RAMASIA Staff Writer
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he Botswana Sectors of Eductors Trade Union (BOSETU) has raised has reacted angrily to remarks by the Permanent Secretary for the Ministry of Basic Education, Bridget John, that the studentteacher ratio is low in the country’s public schools. PS John said this in response to a question in a televised press conference on Monday. “We have … listened with
disbelief and utter shock to some sentiments echoed by the Basic Education Permanent Secretary Mrs Bridget John during a press briefing on the state of readiness of schools to re-open following their closure owing to COVID-19 and the consequent lockdown,’’ BOSETU said in a statement Wednesday. The Secretary General of the union, Tobokani Rari, described John’s remarks as ‘‘not only potentially misleading the nation (and) having been done without due care and any regard to the
practical realities on the ground”.’ The veteran trade unionist wrote: “In justifying that, she cited a certain study by the World Bank which she alleges points to schools at primary level having a student-teacher ratio of 1:22 while at secondary school level the ratio is 1:12. This interpretation, in our view, is utterly regrettable and it has no doubt been referred to in totally incorrect circumstances of the current practical realities on the ground. “The real issue here is that the number of students in a class,
which is commonly referred to as ‘students-teacher ratio,’ is embarrassingly very high in most of the schools in the country. By her own admission, some schools in Botswana have classes that are bursting at their seams, with more than 60 students in a class.’’ According to Rari, on average the ratio of a teacher to students at primary school level stands at 1:30 and is up to as high as 1:60 at secondary schools level. “We have to reiterate here that the 1994 Revised National Policy on Education (RNPE) back then
recommended that at secondary schools, the student-teacher ratio should be 1:30 at all levels. Twenty-six years down the line, we have class sizes that are double what was recommended then and yet we have an accounting officer of the basic education ministry becoming evasive when faced with this glaring fact,’’ Rari wrote in the statement. Botswana has in recent years experienced deteriorating results at public schools that observers have partly blamed on large class sizes.
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Minchin & Kelly attorney caught lying under oath After first creating a lie, a lawyer working for Minchin & Kelly found that one about-face was not
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enough to wriggle out of his failure to appear in court for a corporate client, KITSO DICKSON writes.
he court battle between the Botswana Power Corporation (BPC) and Re-sealing Botswana has exposed attempts to deceive the court by one of Botswana’s reputable law firms, Minchin & Kelly (M&K), The Business Weekly & Review has established. After failing to appear before court, one of the attorneys tried to cover up the law firm’s blunder by claiming that they had not been notified of court dates and had other court matters to handle. He was apparently fired to save the law firm’s skin. The deceit emanates from a court matter between Re-sealing and Botswana Power Corporation. Re-sealing was suing BPC for failing to pay what was due to them after an agreement to provide maintenance, as well as other additional services to the power utility. BPC was represented by M&K where the matter was assigned to a certain Moagi Moloi, an attorney employed by the law firm at the time. Moloi was working in the civil and corporate litigation department which, according to court documents, was headed by John Griffiths at the time. Griffiths has since retired from M&K. According files before the court, Moloi was in full control of the case and was handling it without any direct supervision of any other attorney or partner at M&K. Given Moloi’s status as a senior associate at the time, and taking into consideration his experience, the law firm claimed that it was not considered necessary for him to be directly supervised when dealing with matters. At any rate, this was not a particularly complicated case and he had proven himself as being more than competent. However, it turns out that when the matter was called in court on 13 May 2019, Moloi did not appear and consequently BPC was unrepresented at the hearing. According to documents, an application was made in terms of order 42 rule 12 © for final judgement against the BPC on the basis of the non-appearance of Moloi on that particular day. On 26 July 2019, Moloi sent an email to a Re-sealing Botswana representative saying he was not notified of the date of hearing. However, on 30 July, he changed his stance and filed a rescission application explaining that the reasons he was not in attendance was that he was engaged in another matter which was scheduled before Segopolo J. who sits in the Broadhurst Magistrates Court. The matter before Segopolo J. was case number CVHGB-0005313/18.
Which was a matter between Hollard Insurance and Oarabile Sediegeng Moloi also told the court that the Hollard matter was scheduled for 8:30 am on that day whereas the BPC matter was for 9:30am. He went on to say the matter
went on for long a time that extended into the time scheduled for this matter. However, Re-sealing returned that Moloi was not being truthful in his explanation for his nonappearance before the court. According to them, Moloi failed
to account for his whereabouts. Re-sealing produced evidence that the Hollard matter that Moloi was speaking about was not before Segopolo J. but Khan J. They also confirmed it was not Moloi who appeared before Khan J. for Hollard but Karabo
Mponang, who is also an attorney employed by M& K. Re-sealing attached the court order delivered by Khan J. confirming that Mponang had appeared for the Hollard case matter and not Moloi.
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Institute of Development Management re-opens for business
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ollowing the outbreak of Covid19 and subsequent shutdown of Education Service Providers (ETPs), the Institute of Development Management (IDM) is facilitating gradual opening of its business since Monday 18th May 2020. The Institute’s learners have also resumed learning through e-learning platforms. IDM Botswana Country Director, Dr Onalenna Seitio-Kgokgwe says they are enhancing infusion of information technologies in teaching and learning processes in order to improve quality and efficiency of program delivery. “Prior to Covid19, we tested our e-learning platforms and successfully delivered training through them. We were at the same time conservative because there was an opportunity and luxury to deliver programs face to face. Covid19 has however thrown us into a completely different situation where we need now to enhance the use of technology for business continuity in the different scenarios that the disease presents i.e. during periods of lockdowns or in campus adhering to social distancing requirement. To that effect we have enhanced IT educational technology platform and made significant investment in IT infrastructure including bandwidth. This should give us a competitive advantage as our students will be able to learn wherever they are, and our teaching staff will also be able to engage with the students as needed,” said Dr Kgokgwe. She further revealed that in line with Covid19 protocols and the current health requirements to curb the spread of the virus, IDM will not bring all the students back to campus at the same time. She added: “We have therefore arranged our students according to priority groups of those completing; the first year students as well as those attending franchised courses of CIPS and AAT to resume face to face classes from the 2nd June 2020. This date was revised from 8th June 2020 as we worked hard to increase our readiness levels and expedite their return to class”. Dr Kgokgwe further highlighted that IDM has developed plans to support all students who may encounter limitations to ensure that none of their students is disadvantaged and that as they are aware of challenges around technology infrastructure in some parts of the country and the potential lack of readiness by some of our students to continue their studies. “As an institution mandated to support the human resource development of this country, IDM is committed to ensuring that students achieve their dreams to succeed in their studies, at the same time contributing towards rebuilding the economy of our nation,” she concluded.
Bonolo Molebatsi, founder of Nolly Crafts Investments
EXTENSIVE PRODUCT KNOWLEDGE PLACES NOLLY CRAFTS AHEAD
The advent of Covid-19 recently added the Government of Botswana to a growing list of happy customers at Nolly Craft Investments, Tshepiso Gabotlhomolwe writes
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t is unfortunate that entrepreneurship has been glamourised by most entrepreneurs who share success stories while neglecting the setbacks. This is an observation made by Bonolo Molebatsi, who is herself an entrepreneur. Molebatsi is the founder of Nolly Crafts Investments, a 100 percent citizen owned company that offers various services, including cleaning and consultancy. “It's way tougher but also rewarding to be your own boss,” she says. “It is always important to remember why you started.” To overcome the challenges of building her own empire, she acknowledges key people she keeps in her circle. These are people who do not just support her by sourcing her services but also help her balance the business. Her dream is to grow Nolly into a leading cleaning company in Botswana and across the continent through franchising. Initially Nolly was just a broker for insurance and loans. Later a cleaning department was added and the business grew its footprint throughout the country. Its cleaning services use local products that are environmentally friendly. According to Molebatsi, Nolly was about business solutions that are affordable for Batswana at every level.
Molebatsi says she also wanted to bridge the gap of youth unemploymentthat continues to be a challenge in Botswana. To that end, most of her team is made up of people under the age of 35, mainly women. Nolly's services are driven by the slogan, “Think Different, Do Different ’’ because Molebatsi believes there are many ways of doing business, hence also the range of services. It includes pest control, HR and labour relations, as well as general Supplies. She points out that the diversity is paying off in the advent of COVID-19 because fumigation and disinfection, which was the backbone of Nolly Crafts, grew in demand. Regarding what role the company has played in the fight against the spread of COVID-19, Molebatsi says the Gaborone and Lobatse bus terminals were the starting point in their fumigation programme. “Early in the lockdown began, which halted public transport, we shifted our focus to fumigating and disinfecting public arenas (main dikgotla) and the offices of District Commissioners across the country,” she says. This was in consideration of these public places being where Batswana go to seek travel permits. They disinfected a few border posts too because trade in essential goods between countries, and therefore
movement of haulage trucks in the SADC region, never stopped. In cleaning services Nolly competes directly with more established entities and bigger players like G4S, Clean All and Clean Time. In the fumigation disinfection sphere, Nolly competes with KPS Hygiene Services and Puristy. To stay ahead of the game, Molebatsi underlines the importance of product knowledge and customer care, saying most businesses focus on size. “We stay ahead of the game because we do in-depth research about our customers' needs in order to ultimately achieve great customer satisfaction," she explains. "We also invest a lot of time and money in product testing and knowledge. There is also something to say about philosophy in that without compromising on quality, we support a lot of SMMEs that are run by young Batswana." And so what is Nolly's market share? “It is really difficult to tell at this stage, especially given the new aspect of Covid-19 and its impact on businesses." Until recently when the government came along, Nolly’s customers have mostly been individuals and private companies, and she says she has the confidence to say the list is growing because they are all happy with Nolly's touch.
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Kalahari Offers Diversification Solution
from page 05
Minchin & Kelly attorney caught lying under oath
But the deep sand cover of the desert presents a challenge
Pic: c.stocksy.com
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Tshepi GABOTLHOMOLWE Staff Writer
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iversification has been classified as a dire need, especially now that the diamond market has fallen terribly. MSA Group Consultant, Mike Robertsons, says the diamond dependent economy of Botswana can salvage on renewed exploration interest in the Kalahari Copper Belt, as well as diversify and industrialise the mining sector. The MSA Group is a provider of exploration, geology, mineral resource and reserve estimation, mining and environment consulting services to the mining industry with an international client base in more than 40 countries. The Kalahari Copper Belt, which is regarded as one of the world’s most promising underexplored copper provinces, stretches for about 1000km from
central Namibia to the Shinamba Hills in northern Botswana, along the south-eastern margins of the Damaran-Katangan Rift Basin. Although the industry has undergone a major hit, Robertsons says the closure of BCL and Tati Nickel operations, together with the closure of the only two copper mines in Botswana over the past five years, is the reason the industry hit its lowest. However, it is his view that this though can be strongly mitigated by the two new mines on the Kalahari Belt, which are likely to come on stream in the immediate future and restore the well awaited fate in the potentially filled copper mining sector. According to MSA, the underexplored Kalahari Copper Belt produces a slightly lower grade product than the Central African Copper Belt but the overall investment attractiveness, existing infrastructure and geological potential that open
doors for exploration and discovery of new copper deposits will save it. Robertsons says the new geological understanding of the controls of mineralization, along with improvements in exploration techniques through cover, has resulted in a promising pipeline of regional exploration and resource development projects. In February this year, Robertsons described the Kalahari Copper Belt as “the most interesting play at the moment”, noting that the many mining and exploration companies that are obtaining mineral rights in large swaths across the belt. For a country that is well characterised by high diamond quality, production volumes and large diamond sizes, Robertsons says the falling diamond price, coupled with historic economic reliance on the diamonds, calls for diversification from diamonds to
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other commodities which include coal, soda ash, manganese, natural gas and copper. He notes that copper is regarded as a barometer of global economic health and is used in all aspects of industrialization also acting as an important factor for renewable energy systems. “Considering the challenge of operating in the Central African, Copper Belt and the ongoing global copper supply deficit, the potential of the Kalahari Copper Belt is seen as particularly attractive, he said. The MSA Group’s senior exploration geologist, Luke Peters, says the potential for significant copper discoveries is apparent along the belt, although the deep Kalahari sand cover adds some challenges. Mining and exploration companies have explored the Kalahari Copper Belt in the past, the deep sand cover has made it historically difficult to identify and delineate deposits.
In response to this, he did another volter-face. Moloi said that he had made an error in stating that the Hollard matter was before Segopolo J. and that the matter was indeed before Khan J. He also stated that Hollard matter was indeed attended by Mponang and then claimed this was because she was attending to her own matter on that day before the same court. After this embarrassment, M&K resolved to suspend Moloi on 21 February this year, pending the conclusion of disciplinary proceedings that had been instituted against him. Jayne Eleanor Maja Cross, partner at the law firm, ascertained that Mponang did not have any other matter before Khan J. as alleged by Moloi. According to court files, the only matter she appeared in Khan J’s court was the Hollard matter. “It therefore appears that Moloi was not being truthful with this court when he stated that Mponang was before Khan J. on the same day that he was, but for a different matter”. “I ascertained from the applicant’s representative that Moloi had advised applicant that the reason for his non-appearance at court for this matter on the 13 May 2019 was on account of him being unaware that the matter had been scheduled for hearing on that date,” Cross wrote.“It therefore appears from our investigations and information in our procession that Moloi was not being truthful with the court in his attempt to explain the reasons for his non-appearance.”
from page 05
Defence insists on Khama, Masisi as witnesses in NPF case letter, which is before the Gaborone High Court, on the defence’s intention to examine witnesses and discover relevant documentation. Ngakaagae has made a long list of witnesses they wish to cross examine. At the top of the list is former president Khama. “He is the only authority to which the DISS Director Mr Isaac Kgosi reported,” Ngakaagae wrote. “As much it is important to know all relevant (facts) between the same in so far as the expenditure is concerned.’’ In the letter, the defence
attorney notes that the Office of the President shall be required to produce any documentation pointing to the expenditure. Seretse’s lawyer also sought to have President Masisi have his day in court. “He will be required to testify on his knowledge of the transaction as Vice President to the now retired Ian Khama,’’ he said. Additionally, the defence team wants Masisi to testify about any meeting(s) he may have attended which relate to these matters. Former PSP Carter Morupisi is cited in his capacity as head of civil service and secretary to cabinet.
Another witness summoned by Seretse is former Minister of Presidential Affairs, Governance and Public Administration, Eric Molale to whom the DISS reported. The letter says the OP, including Molale, was briefed about the case by then minerals minister Sadique Kebonang. The long list includes former DCEC directors Rose Seretse and Bruno Paledi, Chief Investigating Officer Andria German, and former Director of Energy Kenneth Kerekang. There are more witnesses from DISS, DCEC and the minerals ministry that the defence team also want
in court. “Kindly confirm if we can have a consent order for a full blown trial or whether there will be a need to make an application for the same, Ngakaagae asked of the court. “In the event of your objection to a full blown trial, application shall be made for the dismissal of the matter on account of irresoluble disputes of fact.’’ This subpoena application is one among many cases that have sprung from this money laundering matter which observers have labelled Botswana’s unprecedented white-
collar crimes. Today (Friday), the Extension 2 Magistrates Court will decide on a date for the main case which has been moved across a number of magistrates before it finally landed there. On 17 August, the Gaborone High Court will hear an ongoing case where the co– accused twin brothers Zein and Sadique Kebonang want their charges quashed. All the while, all eyes will be on Justice Radijeng before whom both President Masisi and his predecessor, Khama, may appear.
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COMMENT BRAVO CEDA…. BUT CONVERT INFORMAL SECTOR LOAN INTO A GRANT
Tax Column
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Jonathan Hore Managing Consultant Aupracon Tax Specialists
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ecently there has been concerns over rental payments in light of the COVID-19 pandemic. The issue on rental payments was rental at a household level and not necessarily corporate or industrial level. So burning was the issue that it even found its way to the floor of Parliament. To us the issue was secondary since rent is a household expenses and the move my government to subsidize incomes and provide other payment holidays was to ensure that households are able to meet immediate expenses such as rent and food. In our view parliament wasted a great deal of time that should have been devoted to addressing the plight of the only people who have been terribly exposed; and those are people in the informal sector. It is on this note that The Business Weekly & Review would like to commend the Citizen Entrepreneurial Development Agency (CEDA) for its latest initiative geared towards assisting the informal sector. The sector had otherwise been left in the lurch. From the commencement of the lockdown to date it had become very clear that they were not catered for in any of the economic responses to the outbreak. Sadly, this is the one sector in which citizen economic participation is centred and it would not hurt for government to admit that they errored by failing to come up with a specific response for the sector. The silence by government was however worrying and painted a picture of a government lacking confidence in its response to the Covid19 breakout. Its failure to respond to the queries left a lot to be desired. In simple terms government had failed to defend its actions despite the array of resources at its disposal. Be that as it may, our suggestion is that the loans by CEDA aimed at the informal sector should be converted into grants or in the alternative given at a 0% interest rate. As it stands players in the informal sector do not qualify for these loans and to expect them to service the loans in this trying times is an unreasonable expectation. We also call on CEDA to scrap off a requirement that those applying for the loans should demonstrate ability to pay and instead allow the stock to be used as collateral. This is so because most of the small businessmen and women that make up the informal sector are struggling financially and are going to struggle to demonstrate that they have ability to pay back the loan. We look forward to the implementation of the CEDA initiative and hope that it will resuscitate and help informal sector workers that have been hard hit by the Covid-19 pandemic.
Tax & your Pocket
W
ell, if you are planning on buying an immovable property, you may need a few hints before you sign on the dotted line. And they say never stop learning and that is what I mastered last week. I had a colleague open my eyes when I was facilitating a tax webinar on property taxes. The eyeopener relates to choices citizens have when purchasing property, i.e. whether to buy from a VAT-registrant or from a non-VAT registrant. He just pointed at one avenue which the legislature provided, and everyone automatically saw the tax planning avenue. I will share with you that important aspect in this article as I know you may be getting ready to sign that property purchase deal. In this article, words importing the masculine shall be deemed to include the feminine. BRIEF ON PROPERTY TAXES There are various property taxes but I will concentrate on two of them today, being VAT and Transfer Duty. You may know that effective 1 March 2020, citizens can now buy a property and enjoy an exemption on the first P1m, if they have to pay transfer duty. The rate of transfer duty is 5% and that is a tax paid by an acquirer of immovable property such as land, farms and houses. But there is a nice fusion of VAT and transfer duty which then makes it interesting if a citizen gets to know the resultant tax effects. Let me first state that a citizen does not have to pay transfer duty if they purchase an immovable property from a VAT registrant. VAT registrants charge tax at 12% whilst transfer duty is levied at 5%. Let me repeat and say that citizens are exempt from transfer duty on the first P1m of any
purchase! Don’t forget that. I know I am getting technical but just stay with me and we will arrive to our destination in a few minutes. Bear in mind that if a property is being sold by a VAT registrant, it is likely to carry VAT in the price. As an example, if a property costs P1m, the VAT registrant will have to charge tax at 12%, making the final purchase price P1.12m. On the other hand, if a citizen purchases the same property from a non-VAT registrant, they do not suffer the 12% VAT but pay transfer duty at 5%. Now, VAT is paid directly to the seller whilst transfer duty is paid straight to BURS. HOW TAX BILLS SHRINK With the above background, I am sure I can now get to the point that my colleague pointed out to me. After I had mesmerised him with the above analysis, he said that citizens can pay less tax by simply choosing not to buy property from VAT registrant. In other words, they should buy from individuals or corporates not registered for VAT. That simple choice makes a world of difference and let me break it down for you below. Assuming that a citizen is acquiring a farm from a VAT registered property developer for P1m, the final price becomes P1.12m, including VAT. Technically, that citizen pays tax amounting to P120 000 which he can’t claim as he is not registered for VAT. By the way, VAT is a tax borne by the final consumer. Now, if the same citizen had posed and looked for a nonVAT registrant, he would still have to pay the same P1m to the seller. The seller can’t charge any tax as he is not registered for VAT. BURS will make an assessment of the tax and first grant an exemption of the
P1m exemption, bringing the tax base to P0.00. In other words, BURS will issue a nil assessment or a letter stating that the transfer can proceed as no tax would be payable. Now, let’s compare these two dudes; the other one went ahead and paid P1.12m including VAT of P0.12m whilst the other only parted with P1m and paid no tax. So, what differentiated them; knowledge of the provisions of the scenarios where the legislature gives back and when he doesn’t. CONCLUSION I need not repeat myself but if a citizen purchases an immovable property from a VAT registrant, they part with more money as they suffer VAT, which is a final tax on them. They can’t get the tax back unless if registered for VAT. However, if they purchase from a non-VAT registrant, they are likely to pay transfer duty but only after the exemption of the first P1m. In simple, buying from non-VAT registrants gives citizens a tax advantage. If that opened your eyes, say this with me: Tada! Well folks, I hope that was insightful. As Yours Truly says goodbye, remember to pay to Caesar what belongs to him. If you want to join our Tax Whatsapp group, send me a text on the cell number below. Jonathan Hore is a Managing Tax Consultant at Aupracon Tax Specialists and feedback on this article can be relayed to jhore@aupracontax.co.bw or 7181 5836.
THE BUSINESS WEEKLY & REVIEW
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Friday 29 May 2020 - 04 April 2020
9
Companies & Markets MARKET HIGHLIGHTS MAJOR MARKET MOVERS (Thebe)
Counter
Share price
Change (%)
Source: BSE
DOMESTIC EXCHANGE RATES 24/04/2020 Rate EURO/BWP
0.0751
GBP /BWP
0.0656
USD /BWP
0.0809
ZAR/BWP
1.5490
YEN/BWP
8.7000
Source: BOB
KBL TO CUT STAFF SALARIES
WORLD MARKETS As at 08/05/2020 INDEX
VALUE
% CHANGE
24071.00
+0.96
S&P 500
2907.50
+0.95
NASDAQ
8979.66
+1.41
AMERICAS INDEXES Dow Jones Industrial Average
Squeezed tight by the ban on the sale of alcohol and paying full salaries during this dry period, KBL is overstretched and will have to slash salaries to all its 484 employees beginning July. It is all it can do to avoid retrenchments as the maker of St. Loius Lager ponders the effects of the millions of expired hectolitres of beer that it must destroy. story on page 12
EUROPE, MIDDLE EAST & AFRICA INDEXES EURO STOXX 50 Price EUR
2906.79
+0.91
FTSE 100 Index
5935.98
+1.40
10899.23
+1.30
DAX
ASIA-PACIFIC INDEXES Nikkei
20179.09
+2.56
Hong Kong Hang Seng Index
24230.17
+1.01
1458.28
+2.21
TOPIX Source: Bloomberg
WRITE TO US AT P.O Box Post Net Kgale View 449 ADD, Gaborone
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TEL: (+267) 3170 615 FAX: (+267) 3170 618
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THE BUSINESS WEEKLY & REVIEW Friday 29 May 2020 - 04 April 2020
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Companies & Markets
CA sales stalled by ban on alcohol and tobacco C
Cellulant awarded ePayment Service Provider License
• But the group says it sees the general downturn in business triggered by Covid-19 as a platform for expansion
africa.cgtn.com
Kitso dickson Staff Writer
C
A Sales, says the ban on sales of alcohol and tobacco products has had a significant impact on the group’s sales for the second quarter of 2020 thus far. However, the fast moving consumer goods distributor says the total impact cannot be quantified as yet because it is still unknown at this point when the ban will be lifted. CA Sales’ key markets are Botswana and South Africa, both of which banned the sale of alcohol and tobacco aimed at stemming the growing tide of COVID 19 infections. But while South Africa has
eased its restrictions of the sale of alcohol beginning last week, Botswana is yet to follow suit. Botswana is the largest revenue generator, earning the group nearly 60 percent of its revenue, while South Africa is second at 14 percent. In past year, revenue growth in Botswana market was driven by new business by more than 25 percent, according to the company’s financial statement. Despite the uncertainty over the impact of COVID-19 on businesses, the group says it will continue to invest in the region and sees the difficult time as a platform for future expansion and internal capability building. But the group’s South African
businesses have also performed well, producing revenue growth of more than 34 percent. This was driven by organic growth, new business and an acquisition in the latter part of 2019. “Our local operation continues to build capability in key areas, including people and technology, and is expected to continue its drive for sustainable, profitable growth,” the group says. In eSwatini, a liquor levy of 7 percent was introduced in 2019 but the group says it does not foresee it impacting alcoholic beverage volumes significantly. In the past year, average revenue growth across three operations in eSwatini was more than 30 percent, this too primarily a result
of new business and additional services. In Namibia, new clients were added to the group’s basket, which should contribute to the bottom line in the future. “We have some operational constraints, which are a result of the significant revenue growth of more than 32 percent, but this is being dealt with and will be resolved,” says the group. Zimbabwe, Mozambique and Lesotho businesses , although small by comparison to other operations, grew revenue by an impressive 63 percent. These operations are strategically important to the group which says it intends to make use of them as a platform for future growth for new and existing clients.
CA SAKES ACQUIRES MINORITY STAKE IN MAC MOBILE
C
A Sales Holdings, through its wholly-owned subsidiaries CA Sales Investments Proprietary Limited and Pamstad Proprietary Limited, acquired minority stakes in various entities in the Mac Mobile group of companies. The Mac Mobile
Group is active in South Africa and in numerous other African jurisdictions and focuses on the development of mobile electronic solutions and the provision of purpose built endto-end cloud-based FMCG value chain solutions and platforms to its customers. The Acquisition
supports the Company’s strategy of broadening its footprint, expanding its service offering into new markets and capability building. The Acquisition is not categorisable in terms of the BSE Listings Requirements or the 4AX Listing Requirements and falls below the threshold requiring an
announcement to shareholders. The Company has opted to release this announcement voluntarily to provide shareholders with information regarding the continuing implementation of the Company’s growth strategy. (BSE announcements)
ellulant, Africa’s leading financial technology company and the payment gateway of choice for leading companies has announced the issuance of an Electronic Payment Service Provider License by the regulator - Bank of Botswana (BoB). The move will enable the company to offer key payment methods such as mobile money, debit and credit cards to merchants and organisations in Botswana. “We are excited to receive this new license”. Said Bathusi Beleme, Country Manager, Cellulant Botswana. “Cellulant has been in Botswana for 11 years now as a technical solutions partner providing digital banking services to five of the leading banks in the country. With this license, we can now directly provide our innovative payment solutions to today’s connected businesses, organisations and consumers.” With this new license, the company has embarked on the rollout of their own payment solutions that will enable Batswana to pay for electricity, airtime or payTV using all major international and local debit and credit cards. Plans are underway to also introduce multiple mobile money accounts including Orange Money, MyZaka (Mascom), sMega (beMobile) in the coming months. The company has also begun integration of Tingg checkout- a solution that will help businesses and organisations digitize and accept both mobile and card payments. Cellulant becomes one of the first non-banking actors to be granted the EPS license following the introduction of new regulations by the Ministry of Finance in December 2018. The new law which provides a legal framework for the licensing and oversight of Electronic Payments Services Providers including Mobile Money and Value Transfers Services (MVTS) operations came into effect in January 2019. The EPS license seeks to bring payment systems operators and service providers within the regulatory, monitoring and performance purview of the Bank of Botswana, a move that the company has hailed as the way to go in promoting an enabling environment that will foster innovation within the country to catalyse the delivery and adoption of digital financial services. (pressstatement)
Companies & Markets
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BTC DONATES TO HELP FIGHT GENDER BASED VIOLENCE
B
GABORONE 24 May 2020, Christian devotees wearing a face mask as a preventive measure against the spread of the COVID-19 coronavirus attending the congregation worship at the Anglican Cathedral of the Holy Cross church for the first time since the lockdown. Inside the church there are maximum 50 people as allowed for congregational worship and have to maintain the guided social distancing arrangement. (Pic:Monirul Bhuiyan/Press Photo)
Giyani Raises Enough Cash To Advance Botswana Projects • Feasibility study for Kgale Hill shecduled for completion in Q1 2021. Tshepi GABOTLHOMOLWE Staff Writer
A
Canadian explorer and developer focused on development of Kgale Hill, Lobatse and Otse manganese prospects in the Kanye Basin, Giyani Metals Corporation, has announced that their nonbrokered private placement financing has closed. The private placement, announced on May 19, was fully subscribed and comprised 15 million units at a price of $0.08 a unit for gross proceeds of $1.2-million in immediately available new funding. According to a report released by the company, the private placement included a lead subscription on behalf of RAB Capital Holdings Limited (RAB Capital) for 11,000,000 units, for a total subscription of $880,000. The company reports that it has also entered into a conditional board representation agreement under which, provided RAB Capital maintains at least a 10 percent shareholding, it is entitled
to appoint or elect one director to the board of the company. The agreement also provides that Giyani will consult with and obtain the consent of RAB Capital, which is not to be unreasonably withheld, to certain equity security issuances within the 13 months following the closing of the private placement, subject to customary carve-outs. The net proceeds from the private placement will be used to fund the advancement of the Kgale Hill feasibility study, which is expected to be completed in Q1 2021. According to the CEO of Giyani, Robin Birchall, insiders of Giyani subscribed for an aggregate of 574,375 units or 4 percent of the private placement, which subscriptions are considered related party transactions within the meaning of TSX Venture Exchange. He described himself as delighted with completion of the private placement, acknowledging RAB Capital for their support in leading the private placement. Birchall says the proceeds will allow the Giyani
team to focus its attention on the development of the company's assets, the main focus of which is rapidly advancing the remainder of the Kgale Hill feasibility study works teams. Most notably, he says they plan to commence reserve drilling in the coming months. The private placement is subject to the final acceptance of the TSXV. All securities issued are subject to a statutory four-month and oneday hold period, which will end on September 26, 2020. The company had reported before the financing placement that they had released an underreported technical report. According to the CEO, they then had to authorise that the report be amended. The amended technical report was required after a review of a previous technical report, filed on 25 September 2019, was found to be incomplete by staff of the Ontario Securities Commission (OSC), as it did not address all of the disclosure items required of a technical report under NI 43-101. Giyani has met the NI 43-101 criteria in the amended technical
report that also includes a new mineral resource statement for Kgale Hill. Birchall says the amended technical report gave them an opportunity to increase their mineral resource and update the preliminary economic assessment at Kgale Hill, which they did. In doing so, says the CEO, project economics continue to be robust, with a small increase in mine life and tonnage.
The company reports that it has also entered into a conditional board representation agreement under which, provided RAB Capital maintains at least a 10 percent shareholding, it is entitled to appoint or elect one director to the board of the company.
o t s w a n a Telecommunication Corporation Limited (BTC) has donated sim cards and airtime worth P56, 000 to the Botswana Gender Based Violence Prevention and Support Centre (BGBVC) to help curb and fight genderbased violence. Speaking at the handover, General Manager Consumer Sales, Ms Boitumelo Masoko, said BTC as a responsible body corporate that is responsive to the needs of the communities in which it operates in, found it prudent to extend a helping hand to BGBVC to help them ease communication challenges in responding to clients and victims of gender based violence effectively, especially in the context of the COVID -19 pandemic and social distancing. BTC donated twenty (20) Sim cards and airtime worth P8000 per month for seven months effective June 2020. BGBVC, Chief Executive Officer, Lorato Moalusi, thanked BTC and said the gesture will go a long way in helping them deliver on their work which is centred around responsiveness and prevention. She said the donation, will help assist the Organisation to offer counselling services telephonically and conduct follow -ups with clients and survivors of gender-based violence, where the movement is limited by the COVID-19 movement restrictions. “Your support will also go a long way in facilitating BGBVC to continue providing this important and critical service to the nation post the pandemic,” said Lorato Moalusi. During the extreme social distancing (lockdown) period, BGBVC offered Psychosocial Support (PSS) to approximately 245 men and women in difficult relationships and offered temporary and emergency shelter to approximately 96 women, children and men. (pressrelease)
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THE BUSINESS WEEKLY & REVIEW
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Friday 29 May 2020 - 04 April 2020
he CEO of Letlole La Rona, Chikuni ShenjereMutiswa, was this week summoned to the swanky offices of the property company somewhere in the Gaborone CBD. According to insiders, he was ordered to surrender all the company’s working equipment, including his laptop, pending an investigation into allegations by the board that he manipulated the company’s Long-term Incentive Plan (LTIP). The man had been working from home as a measure to stem the spread of Covid-19. This development marked the high point of a tussle between him and the board chair, Boitumelo Mogopa, over amounts of money apparently due to Shenjere-Mutiswa and two other executives. According the sources close to the developments, the crux of the matter between the two most powerful directors of the company was that the CEO, the CFO and the Property Manager are entitled to a reward of P30 million. Insiders say this was in line with the LTIP enacted by the company in December 2019. Ironically, the board chair Mogopa approved all the structures of the plan. Whether she knew the implications that would follow remains unknown as she did not answer questions sent to her this week. Mogopa suspends CEO It was not long after ShenjereMutiswa arrived at the offices on Tuesday afternoon that he was handed a two-paged letter authored by Mogopa that read: “As you are aware, the company has been investigating the circumstances surrounding the execution of the Long-term Incentive Plan Policy. The initial investigations have revealed that there is a prima facie case of misconduct against you.” The letter then notes that the investigations are still to be completed before delivering its supreme import: “However, the board has resolved to place you under suspension with immediate effect, pending conclusion of investigations.” And so Shenjere-Mutiswa will remain suspended until further notice. According to sources, the chair explained to the CEO that this action was being taken to ensure that investigations are not impeded by “your presence at work”. During the period of his suspension, the CEO is not permitted to access the company premises, save if and when required to do so to assist with the probe. “If you need to access the office for any reason, you are required to seek approval from the board,” the letter informed Shenjere-Mutiswa. “Your suspension is with full pay and without any loss of benefits. We also request that you surrender your company laptop, which is required for the ongoing investigation with immediate effect to the bard chair.” Mogopa ropes in a caretaker from BDC By end of business on Tuesday,
Companies & Markets
Letlole grapples with a P30m question Bibliophobia, or disinclination to read, could lie at the heart of a rift between the CEO of Letlole and the chairperson of the board of the property company who may have appended her signature to a document with massive financial implication without a full grasp of a critical clause therein. Staff Writer KITSO DICKSON reports
The CEO of Letlole La Rona, Chikuni Shenjere-Mutiswa
Mogopa had published a statement through the Botswana Stock Exchange announcing that the group had roped in Botshelo Mokotedi, Head of Risk at Botswana Development Corporation (BDC), to fill in for the suspended CEO. BDC owns
42 percent of Letlole. Asked about a caretaker coming from BDC and what the caretaker knew about property, BDC’s spokesperson Boitshwarelo Lebang responded: “Mokotedi was seconded at the request of a resource by the LLR Board and
we believe that he has the right credentials and experience that back his ability to execute his interim role.” Upon being probed further on the matter of the suspension of the CEO, Lebang answered: “We wish to reserve our comments until such a time
that a full investigation has been conducted.” She referred other questions to the board chair Mogopa but Mogopa was not forthcoming. “Unfortunately, because there is an on-going investigation, we cannot comment beyond the statement. However, as soon as findings are established, we will engage members of the Fourth Estate and other business constituents for updates and way forward,” she said in response to questions from this publication on Thursday.
“As you are aware, the company has been investigating the circumstances surrounding the execution of the Longterm Incentive Plan Policy. The initial investigations have revealed that there is a prima facie case of misconduct against you.” Where it all began The events of this week were the culmination of issues that began in December 2019 when the board of directors of LLR, led by Mogopa, signed off the group’s long-term incentive plan (with various vesting triggers). It appears now that having this plan in place has a significant financial liability on the company for the benefit of three Letlole executives - the CEO, the CFO and the Property Manager. According to information gathered by this publication, the plan had a condition that triggers a payout of a certain amount to the executives. One of the conditions was that the payout could be made of upon the “removal, resignation or departure in whatever manner and for whatever reason, within 12 months, of three or more of existing members of the board, in office as at the approval date of this plan or an increase of three or more in the number of directors from the number of appointed directors as at the date of approval of this plan”. In other words, changes made to the board would result in a payout to to page 15
Companies & Markets
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KBL TO CUT STAFF SALARIES Squeezed tight by the ban on the sale of alcohol and paying full salaries during this dry period, KBL is overstretched and will have to slash salaries to all its 484 employees beginning July. It is all it can do to avoid retrenchments as the maker of St. Loius Lager ponders the effects of the millions of expired hectolitres of beer that it must destroy.
GABORONE 15 September 2019, It was manna from heaven for some when a truck carrying Black Label beer turns-over at the traffic signal near Molapo Crossing. (Pic: Monirul Bhuiyan)
Staff Writer
K
galagadi Breweries will effect a 10 percent salary cut for all its staff members because the company has accumulated significant losses for more than two months as a result of the government’s ban on the sale of alcohol, The Business Weekly & Review has established. “We are still not sure about the extent of the damage since we don’t know when KBL will be allowed to trade,” the Head of Corporate Affairs at AnheuserBusch InBev (AB InBev), Masegonyana Madisa, said in an interview in which he confirmed the slash in salaries. AB InBev, is a multinational drink and brewing company based in Leuven, Belgium. The company has a global functional management office in New York City and regional headquarters in São Paulo, London, St. Louis, Mexico City, Bremen, Johannesburg and Botswana. It has a controlling stake in KBL through holding company,
Sechaba Breweries Holdings Limited, which listed on the BSE. Madisa said Botswana’s nearmonopoly maker of clear beer has been committed to mitigating the financial impact of the restrictive measures imposed on the alcohol industry, including placing employees on paid leave and paying 100 percent salaries/ packages for April, May and June 2020. “However, given the impact the ban on alcohol sales has had thus far on our business, we can no longer afford to do so,” he asserted. “The temporary salary adjustments are a reasonable and inevitable conclusion to the ban and a critical part of protecting our people from retrenchments which have plagued this company for the last decade.” He acknowledged the hardships that will befall the employees as a result of their reduced monthly incomes, saying the decision to cut salaries was not taken lightly. “It was without a doubt the best course of action that protected the employment and livelihoods of the team and the people they support,” he added.
The salary cut will begin on July 1st 2020 for all 494 employees of KBL. HOW THE ALCOHOL BAN SUFFOCATES KBL According to Madisa, the negative impact on KBL and the alcohol industry in general started with the closure of bars from March 21 and subsequent closure of all alcohol outlets in Botswana from March 27. “As a consequence our business has been and continues to be severely affected by this development,” he said. “Sales volumes have been impacted and as a result there is no revenue whilst we still have commitments to settle.” Madisa noted that KBL’s revenue and profitability would plunge significantly because of the massive drop in sales volumes after an unimpressive year for the brewery. For the year ending 31 December 2019, profit after tax declined by 8 percent, shedding a cool P28 million to sit at P302.7 million. At that time, the maker of St Louis Lager sold 1 536 500 000 hectolitres of alcohol, which was
26 percent lower than the beer volumes sold during the previous reporting period (31 December 2018). Madisa said KBL’s financial performance will dip further, affecting the company’s running capital and its ability to meet financial obligations to suppliers and even staff salaries. KBL is further affected by the fact that its major customers, which are bars, bottlestores and other liquor outlets, had not been making any money since March this year. “As a result of the prohibition on the sale of alcohol, our customers will not generate any revenue and will therefore not be in a position to pay KBL, resulting in significant cash flow pressures for our company,” Madisa noted. It is significant that KBL has been paying total wage and salary packages since the lockdown started nearly two months ago even though the majority of the employees have not been working. Being one of only few local players in Botwsana’s manufacturing sector, Madisa noted, KBL has high maintenance costs “even
when we are not producing or selling”. This is because the KBL plant has to be kept running to avoid it collapsing. Running the plant for over two months without production has bled the brewer dry, Madisa emphasised. He spoke of further losses in raw materials and finished products which have started to expire. He was referring to the lifespan of KBL’s beer, which is just three months. This means that the products which have been in stock since March this year are almost expired and KBL will be forced to destroy them. It is not clear how much stock this entails but KBL sells around 128 million hectolitres of alcohol monthly which fetches around P25 million, according to the latest figures available from Sechaba. In response to a question, Madisa said it was difficult to predict when the company would recover because the government has not indicated when and how trade in alcohol would open. Besides, he noted, there may be restrictions in the future.
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Companies & Markets
Letshego features high in Kgori’s market overview • FNBB leads the banks Tshepi GABOTLHOMOLWE
Staff Writer
T
he Domestic Companies Index (DCI) started the year on a positive note, advancing 0.6 percent for the quarter on a total return basis. This contrasted with all other global markets that ended the quarter with significant losses on the back of Covid-19 recessionary
fears. According to Tshegofatso Tlhong, Portfolio Manager at Kgori Capital, structural issues that constrained market participation had unravelled and sentiment was less negative. However, she notes, a positive catalyst is required to turn price momentum positive. The market had anticipated a positive catalyst in 2020 but the
outbreak of Covid-19 has since seen several countries globally go into lockdown, and by extension partial economic shutdown. Giving a market overview on local companies, Tlhong says on a total return basis, the largest gainers for the quarter were Letshego Holdings Limited Group with a 19.7 percent return and Letlole La Rona (LLR) returning 7.8 percent.
Letshego released reviewed full year results that showed a 41.1 percent increase in Earnings Per Share (EPS) for the period. This performance is reported to have been driven by a 53.2 percent reduction in impairments and a reduction in the group’s effective tax rate. According to Tlhong, during the first quarter, the group made several executive appointments, including of
Andrew Fening Okai as Group CEO. The Botswana Insurance Holding Limited (BIHL) Group’s EPS for the full year is reported to have increased by 17.0 percent to P1.58 driven by a 169.0 percent increase in share of profits of associates and joint ventures (JVs). Tlhong says Sefalana started off the earnings season with a good set of interim results with revenues and EPS, which grew by 11.4 percent and 13.4 percent respectively as margin management and cost control initiatives bore fruit. On the other hand, CA Sales’ EPS for the full year period increased by 22.5 percent on the back of continued organic growth. In other consumer related sector developments, she reports that Sechaba’s full year EPS was 1.9 percent lower despite a 21.0 percent increase in overall volumes and improved operational performance. Tlhong says this disconnect was due to a one-off levy refund received in FY2018. Furthermore, the group made changes to its board and structure. Notably Thabo Mathews was appointed as substantive Managing Director. On the property front, LLR’s EPS reduced by 13.4 percent due to a cash drag as proceeds from the sale of the group’s hospitality properties are yet to be fully deployed. FAR Properties reported a flat EPS for the interim period despite a 5.7 percent increase in operating profit as the number of shares in issue increased. She says RDCP’s full year earnings increased by 3.6 percent, in line with rental revenue growth. In the banking industry, Tlhong says First National Bank Botswana (FNBB) registered EPS growth of 12.5 percent for the interim period. Performance was underpinned by a 10.0 percent growth in non-interest income and the bank’s ability to attract cheaper transactional deposits, which reduced the cost of funding. Barclays Bank of Botswana Limited officially changed its name to Absa Bank Botswana Limited. Tlhong says the bank’s EPS increased by 14.5 percent on the back of broad-based improvements across key areas. BancABC’s EPS was 5.0 percent lower than the previous period as the net interest margin compressed and non-interest income was lower than the previous period. StanChart’s reviewed results showed a 133.0 percent growth in full year EPS to 18.62t on the back of expanding net interest margins. Tlhong says both BancABC and StanChart continue on their transformation journeys.
Companies & Markets
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Friday 29 May 2020 - 04 April 2020
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Letlole grapples with a P30m question these executives. So far this year, the board has undergone about four changes that insiders argue it mean the executives are entitled to a payout. The most important change was the instalment of Grit representative. First it was Oteng Keabetswe early this year appointed as. This month, the Board of Directors of Letlole La Rona notified its shareholders that Curtis Matobolo, a director of the company, had tendered his resignation effective 4 May 2020. In April, Bronwyn Corbett was appointed as a non-executive director of the company. Corbett is the CEO of Grit Real Estate Income Group, a London, JSE and SEM-listed African-focused real estate company. Grit’s stake in Letlole recently increased from 6.25 percent to 30.0 percent. Before her appointment, Frederick Selolwane was appointed as a non-executive director of the company. Selolwane is the Managing Director of Rider Levett Bucknall (Botswana). These changes
prompted executives to launch a claim for payout. How the payout is made In line with the inventive plan, the carry pool (payout) is about 20 percent of the value created since the inception of the incentive plan. Letlole was one of the bullish stock prices on the BSE in the past year, carrying its run into 2020. From the time of enacting of the group’s incentive plan, Letlole’s created value of just under P200 million. It should be noted that the incentive plan also takes into consideration the value created by executives since their appointments. Since the appointment of the CEO, the value created sums up to about P250 million. Insiders point out that if you input the BSE values and time elapsed, the figure the executives are entitled to rounds up to P30 million each. Executives demand their cuts After the changes in the composition of the board, the executives elected to have their portions of the payout made to them. Sources say on
IN THE HIGH COURT OF THE REPUBLIC OF BOTSWANA HELD AT FRANCISTOWN
28 April, board chair Mogopa received a letter from the CEO following a discussion about this condition. “Reference is made to our meeting, initiated and requested by yourself on the Microsoft team’s platform at 6pm on the 22nd April 2020,” Shinjere-Mutiswa wrote. “At this meeting attended by yourself and the ARAC chairperson (Ms. T. Kgatlwane), you both pointed out that in terms of clause 1.1.15.5 of the long-term incentive plan, you were aware that change of control occurred on the 16th April 2020 as a result of the board’s appointment of two additional directors.” Following this recorded meeting, “you requested that I draft notes of the same and share with yourself and Ms. Kgatlwane, which I duly did the following day”. According to the CEO’s letter, “this notice therefore serves as a declaration in terms of clause 13.1 of the LTIP, that I have elected to have my portion of the carry pool vest with effect from the date of change of control. The total carry pool amounts to P29, 896,737 my claim therefore
NYAMADZABO J.
CASE NO. CVHFT 000279-19
In the matter between STANBIC BANK BOTSWANA LIMITED and TANGANI ISHMAEL
PLAINTIFF DEFENDANT SUBSTITUTED SERVICE
his share of the carry pool on or before close of business on 19 May 2020. Those in the know say is entitled to a quarter of the rough P30 million. The other quarter is due to the CFO. Board chair bars CEO from returning to work But by 28 May, Mogope responded to the CEO barring him from coming to the office. The Business Weekly and Review understands that the board engaged FTI Consulting to undertake an investigation into issues relating to the incentive documentation. According to sources, the other two executives were allowed to resume work despite the investigations. They say the CEO is being scapegoated because the structure of the incentive plan was approved by Mogopa, perhaps without a full understanding of the implications it carried. Insiders say in several meetings, the board admitted overlooking the clause that triggered this payment. Upon being contacted, Shenjere-Mutiswa declined to comment, referring all questions to the board chair.
is 50 percent of the said amounts which is P14, 948,368.29”. The CEO told the chair that the company is therefore obliged to make payments in the amount P14, 948, 368. 29 within 21 calendar days of receipt of the notice. “I however remain willing to engage with the board, without prejudice,” he wrote. “Such engagement should be finalised before close of business on the 30 April 2020, failing which I expect full payment of the amount of P14, 948, 368.29 within 21 calendar days.” Another letter came from Property Manager Baalakani Nlumbile on May 7th: “A notice of declaration, in terms of the long term incentive plan was delivered to you on the 28 April 2020,” Nlumbile’s letter read. “Upon receipt of the notice you were obliged in terms of clause 9.8.1 to respond in writing within five working days, providing your computation of the carry pool. I am therefore left to assume that you do not dispute the computation that I have provided.” Accordingly, Nlumbile said he expected full payment of
IN THE HIGH COURT OF THE REPUBLIC OF BOTSWANA HELD AT FRANCISTOWN
SOLOMON J.
CASE NO. CVHFT 000693-19
In the matter between STANBIC BANK BOTSWANA LIMITED and MOEMEDI MOLAMU
PLAINTIFF DEFENDANT SUBSTITUTED SERVICE
TO: TANGANI ISHMAEL, an adult male of full legal capacity, whose full and further particulars are unknown to Plaintiff, save to state that his last known address is Plot 5302 Somerset Extension, P O Box 10758, Francistown.
TO: MOEMEDI MOLAMU, an adult male of full legal capacity, whose full and further particulars are unknown to Plaintiff, save to state that his last known address is Akuje Ward, Chadibe, P O Box 181, Chadibe North, Chadibe.
TAKE NOTICE THAT by summons issued out of the High Court, you have been called upon to give notice within Fourteen (14) days after publication hereof to the Registrar of the High Court at Francistown and to the Plaintiff’s attorneys, of your intention to defend, if any, in an action wherein the Plaintiff claims:
TAKE NOTICE THAT by summons issued out of the High Court, you have been called upon to give notice within Twenty One (21) days after publication hereof to the Registrar of the High Court at Francistown and to the Plaintiff’s attorneys, of your intention to defend, if any, in an action wherein the Plaintiff claims:
a) b) c) d)
Payment of the amount of P98 886.62; Interest thereon at the prime lending rate plus 18% compounded annually; Costs of suit on attorney and own client scale; Any further and/or alternative relief.
TAKE NOTICE FURTHER THAT in the event you fail to give such notice within the aforementioned time frame, Judgment, as set out above, may be granted against you without any further reference to you. DATED AT FRANCISTOWN THIS 27th DAY OF MAY 2020.
a) Payment of the amount of P166 232.14; b) Interest thereon at the Prime Lending rate plus 18% calculated daily and compounded monthly calculated from the date of default reckoned from the 07th June 2019 to date of full and final payment; b) Costs of suit; c) Further and/or alternative relief. TAKE NOTICE FURTHER THAT in the event you fail to give such notice within the aforementioned time frame, Judgment, as set out above, may be granted against you without any further reference to you. DATED AT FRANCISTOWN THIS 27th DAY OF MAY 2020.
COLLINS CHILISA CONSULTANTS (Plaintiff’s Attorneys) Plot 400, Cnr of Baines Avenue & Moffat Street P. O. Box 484 FRANCISTOWN
IN THE HIGH COURT OF THE REPUBLIC OF BOTSWANA HELD AT FRANCISTOWN
COLLINS CHILISA CONSULTANTS (Plaintiff’s Attorneys) Plot 400, Cnr of Baines Avenue & Moffat Street P. O. Box 484 FRANCISTOWN
SECHELE J.
CASE NO. CVHFT 000693-19
In the matter between STANBIC BANK BOTSWANA LIMITED and DOREEN KELEBOGILE SOKWE
PLAINTIFF DEFENDANT SUBSTITUTED SERVICE
TO: DOREEN KELEBOGILE SOKWE, an adult female of full legal capacity, whose full and further particulars are unknown to Plaintiff, save to state that his last known address is Plot 5943, Tati Siding, P O Box 607, Gaborone. TAKE NOTICE THAT by summons issued out of the High Court, you have been called upon to give notice within Fourteen (14) days after publication hereof to the Registrar of the High Court at Francistown and to the Plaintiff’s attorneys, of your intention to defend, if any, in an action wherein the Plaintiff claims a) Payment of the amount of P324 838.26; a) Interest thereon at the rate minus 6% calculated daily and compounded monthly calculated from the date of default reckoned from the 17th June 2019 to date of full and final payment; b) Costs of suit on attorney and own client scale; c) Any further and/or alternative relief. TAKE NOTICE FURTHER THAT in the event you fail to give such notice within the aforementioned time frame, Judgment, as set out above, may be granted against you without any further reference to you. DATED AT FRANCISTOWN THIS 27th DAY OF MAY 2020.
COLLINS CHILISA CONSULTANTS (Plaintiff’s Attorneys) Plot 400, Cnr of Baines Avenue & Moffat Street P. O. Box 484 FRANCISTOWN
WRITE TO US AT The Business Weekly & Review P.O Box Post Net Kgale View 449 ADD Gaborone
LEGAL NOTICE
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