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BPOPF roars, CMB says bring it on!

Publishing Date : 06 August, 2018

Author : KETUMILE RAMATITI

Capital Management Botswana (CMB) says it is unfazed by suggestions that it is being investigated for misappropriation of Botswana Public Officers Pension Funds (BPOPF) monies. The troubled company has through its attorney, Gabriel Kanjabanga insisted that every dealing it had with BPOPF was done in the true spirit of the contract between the two parties.


The CMB management says it has tried in vain to demonstrate and account for the funds committed in the Botswana Opportunity Partnership (BOP), the vehicle that bonded them with BPOPF. “As a private Equity organization there is a limited partner and the General Partner. In this case, BPOPF is the Limited partner and had committed 880 Million Pula to a Fund called BOP. The initial commitment was P500 Million before CMB demonstrated that they had a very good pipeline and potential to invest the funds with good assets.”


According to CMB, there is no hiding from the fact that the following investments were made in the spirit of the contract with CMB: Wilderness Safari at the tune of P150 Million; Kawena Holdings with a cash injection of P150 Million; AGILE University got P50 Million; Cell City t/a GoldWing got a P 50 Million; while Bona Life was given P 50 Million. CMB directors are adamant that the Share Certificates and Shareholders Agreement were availed.  

THE KAWENA STORY

However, in the statutory managers’ last report, Kawena, the biggest retail and distributor in SADC was said to be unaccounted for. Kawena Distributors (Pty) Ltd, formerly Manica Mineworkers Suppliers (Pty) Ltd commenced its business operations in 1987. Manica companies have been entrenched in Mozambique for over 100 years. Kawena is a wholly owned subsidiary of Sherewa Investments (Pty) Ltd. The Sherewa Investment Group looks after various businesses in the Southern African region, operating in South Africa, Mozambique and Zimbabwe.


Their core business, Kawena Distributors, has earned the trust of the Mozambican mine-workers through product and service delivery, stretching back almost 30 years and is widely considered an institution in the country. Over the years Kawena diversified, leveraging off the relationships forged with various ministries, principal suppliers and extensive infrastructural networks within Mozambique.


Kawena now has four major business units that encompass: Kawena Distributors, Sherewa Trading, Pemba Business Park and Procurement and the Kawena/ OK Zimbabwe partnership. Since BPOPF has announced that it is all systems go through the statutory manager to locate “missing assets”, it will be interesting to see if this publicly visible company will not share information with the authorities.
 

BONALIFE VS CMB

According to CMB, they were Bona Life asset Managers. Bona Life had to manage the liability part as CMB managed the asset. According to them this combination emanates from the fact that in an annuity business which Bona Life is involved in, clients purchase annuities with a promise that they will be paid back with interest and this effectively creates a liability. This has to be matched with concomitant assets. “And that would be where CMB gets in to find suitable assets. CMB managed to get three assets namely: Manor Squad in Durban at P60 Million with a return of 10%; BDC flats for 13.5 Million; and Storage Solutions for P60 Million. The total assets aggregate to P133.5 Million.”


According to CMB it became apparent that Regina Vaka (CEO of Bona Life) was not interested in acquisition of tangible assets to meet the liability profile, the business became insolvent to the extent that she requested for recapitalization of P100 Million from CMB. “CMB could not agree to the model of taking funds from clients and putting them in the bank to earn a lesser interest than the one promised annuitants did not make economic sense. Ms Vaka opted to report CMB to the Regulator (NBIFRA) as if CMB was running Bona Life. She continued to report CMB to DCEC for an allegedly missing P133.5 Million which was later accounted for with ease.”


CMB TROUBLES WITH BPOPF


According to CMB management the focus moved to BPOPF since there is an alleged P400 Million missing.  “The Courts have been consistent with the fact that the assets for P450 Million have been bought, eliminating issues of misappropriation of funds at the time. The point of contention is to do with those P450 Million assets being disposed for P 50 Million. Effectively CMB is to account for P400 Million worth of assets. This will be very easy to account for in the manner that there is Wilderness Safari at P150 Million; Kawena P150 Million; Cell City at P 50 Million; and Bona Life P 50 Million.”  

AGGRIEVED BY THE COURTS

CMB management says Judges in local courts across the country should always reveal their connections to litigants and lawyers. “These links can be social – they may have been law school classmates or share common friends – political, financial or ideological. In some instances the two may have mutual investment interests. They might be in-laws. While it’s unavoidable that such relationships will occur, when they do create a perception of bias, a judge is duty-bound to at the very least disclose that information, and if it creates an actual bias, allow a different judge to take over.”


Could CMB have found themselves sandwiched by politically connected big shots in their case? The Court of Appeal has ruled for all to read. Meanwhile CMB management has one big fear – they posit that experts in the field are of the view that once the assets are muscled from CMB there is a chance that they could be disposed at close to nothing leaving pensioners with peanuts. CMB is also concerned that the DCEC made sure they are stripped of all their sources of funds so that they cannot afford any legal representation. 

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