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Fresh information has revealed how Capital Management Botswana (CMB) tried to falsify records and staged investment committee meetings in an attempt to cover up how they played fast and loose with public service pensioners money.
An interim report by the CMB statutory manager, former High Court judge Peter Collins stops short of suggesting that up to P200 million of Botswana Public Officers Pension Fund (BPOPF) money entrusted to CMB to invest may have been diverted to line pockets of company directors.
The Statutory Manager who has warned that, “my suspicion is raised concerning criminal activity on a massive scale which eclipses isolated breaches of financial laws” says he is “pessimistic about the recovery” of the money and not even confident that the P200 million investments were actually made or that the assets bought “were genuine investable assets in the first place.”
The preliminary report reveals that the trail of at least P 200 million of pensioners’ money went cold as soon as it was disbursed by BPOPF. Indications are that the trail is unlikely to heat up even after last week’s Appeal Court judgment which gave Collins the authority to probe CMB’s books of accounts.
The report further reveals that P150 million of pensioners money entrusted to CMB to invest in Kawena Distributors “is most likely unrecorded on the balance sheets (or bank statements) of BOP, CMB, CMBFI or elsewhere. I suspect it has found itself into South Africa (perhaps Mozambique) through various unauthorized transactions. I will be delighted to be proved wrong.”
The statutory manager revealed that in the course of his investigations he came across two questionable agreements between CMB and Kawena Distributors which were among the files of CMB lawyer, Desai of Desai Law Group. Desai has however distanced himself from the two agreements. The statutory manager further turned up information on how CMB tried to persuade Desai into doctoring the agreements. Raising questions over the two documents, the Statutory Manager stated that he had not seen any paper work supporting the CMB agreements with Kawena Distributors. “I am reasonably certain that no paperwork exists as attorney Desai informed me that his firm was not the author of either of these agreements and furthermore, if I understood him correctly, he was approached by the directors and managers of CMB in January 2018 with a request to prepare fresh legal documentation with retrospective effect in order to validate implementation which had already taken place. Correctly, and professionally, Mr Desai would not countenance this.” He concludes that, ‘for the purpose of this interim report I fear that the value of BOP’s investment in Kawena may be zero.”
Staged Investment Committee Meeting
It has also emerged that CMB may have staged a BOP investment committee meeting as a cover to embezzle funds under the pretext of investing in African graduate Institute of Leadership and Enterprises (Pty) Ltd. Although the meeting that recommended a drawdown notice to BPOPF was allegedly convened in Johannesburg 10 September 2016, CMB had three months earlier on 22 June 2016 already sent a drawdown notice to BPOPF for P50 million “to underwrite the establishment of African graduate Institute of Leadership and Enterprises (AGILE) with a view of acquiring 75% of AGILE.
The statutory manager says he is not confident that the money was invested in the project. “An examination of the statutory records of this entity reveals that the shareholding is split between BOP (60%) and two individuals: Colin Stuart Rowley (20%) and Rasoave Rijamampinina (20%)” The South African duo had from time to time served on the BOP Advisory Board or Investment Committee. Their addresses on the Share certificates give an address in extension 12 Gaborone which is the address CMB director Tim Marsland uses when in Gaborone. “.... the funds were drawn down nearly 2 years ago, and from elementary questions I have asked in the Gaborone community, there is no evidence at all of any business school being established in Botswana by this name or anything similar. As there is no money in the CMB bank accounts I fear that there is nothing at all to show for this P50 million draw down. For the purpose of this interim report I value BOP’s investment in AGILE as zero.”
Other Peoples’ Money
The report further reveals how CMB played fast and loose with other people’s money. On 22nd June 2016 CMB sent a drawdown notice to BPOPF for P50 million to acquire 50% of Cell City (Pty) Ltd. Again the drawdown pre dates the BOP Investment Committee meeting which decided to recommend it by some three months. Following the acquisition approached CMB for a loan of P 20 million which was provided in three trenches. The Cell City Managing Director discloses that he was however bothered by CMB Director, Tim Marsland’s reckless attitude. He is quoted in the report saying Marsland ‘was disinterested in the terms of the loan e.g. period, coupon rate etc. His attitude was one of unrestrained largesse....” the Cell City Managing Director “felt sufficiently troubled by this uncommercial behaviour ( no documentation) that he himself designated a 5% interest rate to the loan and began paying it periodically to CMB.”
The Statutory Manager further states that, “I think this is a valuable asset for BOP. I suspect that the asking price for the entry may have exceeded fair value. Profitability is to be admired. Exiting the investment may be problematic on account of private company pre-emptive rights issues. Only for the purposes of ball-parking value (and with no expertise attached) I suggest BOP thinks about returnable present exit value in the region of P30 million P40 million. I could be mistaken – upwards or downwards – and will call expertise to my side when needed.”