PPADB’s rejection of DIS request sparked P250 million corruption scandal

18 Mar 2018

Before there was Khulaco in the National Petroleum Fund (NPF) scandal, there was a company whose name has not featured anywhere until now – Ki-Tech Group.

On its website, Ki-Tech Group says that it was established in 2007, is based in Gaborone and specialises “in the complete software solutions, supplies and installation of information Technology products and services to commercial, industrial and public developments.” What it doesn’t and can’t reveal is that it also happens to be in the good books of the Directorate of Intelligence Services (DIS).

Last year, the spy agency sought permission from the Public Procurement and Asset Disposal Board (PPADB) to directly appoint Ki-Tech Group to build strategic fuel storage facilities across the country. For reasons that will become clearer later in this article, it is important to remember that money for this project would have come from the consolidated fund. Public procurement law allows direct appointment of a supplier but smelling a rat and given the amount of money involved (hundreds of millions of pula), PPADB rejected this request, insisting that a supplier be identified through open tendering. For reasons that some will speculate on any how, DIS itself didn’t want to open up the job to everybody else and so the two parties stalemated. One advanced by a source is that the dark forces behind this project feared that open tendering, which gives PPADB the final say, eliminated the certainty of their having to select a bidder of their choice. 

It was at this point that DIS approached another government department – the Department of Energy which manages the NPF and would later source P250 million. This money is now the subject of a corruption case that has attracted the attention of the Directorate on Corruption and Economic Crime and the Financial Intelligence Agency. At this point, Ki-Tech Group had fallen by the wayside but this company may be worth a second look, if only to try understanding why DIS so badly wanted it to carry out a multi-million pula project and why PPADB may not have been comfortable with it.

If PPADB ran an online background check on the company, it would have turned up a website that lists 10 subsidiaries. However, only two (Petrocoms and Thulisizwe Group) are hyper-linked. Likewise, a drop-down menu on the home page lists eight countries in which the company does business. Oddly though, no contact details are listed for all other countries except Botswana. Ordinarily, a company that is “a leader in the construction industry in Botswana & South Africa” would have contact details for its operations in both countries but there are none for the latter country.

The DIS job would apparently have been carried out by Petrocoms which, on its own website, lists “tank fabrication and construction”, “pipe laying”, “tank foundations” and “petrol stations” among things that it does.

“We have worked throughout South Africa & Botswana installing numerous tanks, tank farms, fuel depots, filling stations etc. We have the ability to work locally, adapting to local conditions, enabling us to positively perform in the vast array of remote and challenging areas of Southern Africa,” says the company’s website, never once revealing projects it has handled or the names of the challenging areas of Southern Africa where it has worked.

The “Services List” is divided into three categories: mechanical construction, tank farm and civil construction. The first and third categories have four items each and the second five. However, if you click on any one of those items, no information comes up. Clicking on “Corporate” in the menu bar yields a page that highlights the company’s social corporate responsibility in unpolished language. The last two sentences read: “Petrocoms has been priviledged and satisified to work in different communities. It is with great pleasure and enthusiasim that Petrocoms prides itself in initiatives that give back to the community. Perenial donations to schools including ICT equipment, clothes and blankets for Non-profit groups may apply for assistance.” The communities in which the company has done work as well as the schools it has donated to are not mentioned by name. While the company says that it can “boast a long list of past and present satisfied customers”, it doesn’t name a single one and the pictures that illustrate the editorial content appear to have been harvested off the Internet.

After the Department of Energy approved the request for funds, it received instructions from DIS to release such funds to a company called Khulaco. At this point, the purpose for the funds had changed from building fuel storage facilities to buying armaments. Khulaco is owned by an asset manager called Bakang Seretse who until last year was more commonly known as the Managing Director of Kgori Capital. However, there has been media speculation that Khulaco is actually another one of DIS’ many front operations. In a case whose intrigue deepens by the day, Seretse has been charged with money-laundering alongside former Director of the Department of Energy, Kenneth Kerekang as well as Botho Leburu, a business associate of his at Khulaco.

In its last 2017 edition, Sunday Standard carried an impeccably-sourced story that asserted that, contrary to what has been placed in the public record, the P250 million never bought any armaments but “ended up in the pockets of some people.” An extension of this assertion is that special funds like the NPF have become soft targets for government officials who steal public money. While the Minister of Finance and Economic Development, Kenneth Matambo, recently assured the nation that special funds are safe, a source says that is far from being the case.

“Actually, it is a lot easier to steal money from special funds than from the consolidated fund,” says a source who illustrates his point with the NPF saga. “The fuel storage facilities would have been built with money from the consolidated fund. However, it was extremely difficult to get the money because the process involves a lot of oversight, including that of PPADB. That is not the case with special funds which are not strictly controlled. That is why it was easier to get the P250 million from the Petroleum Fund.”

Recently filed court papers would seem to confirm information that the money was diverted for personal use. According to such papers, Seretse alleges that the P250 million was divvied up between members of cabinet, including both President Ian Khama and Vice President Mokgweetsi Masisi.

For people who have been hoping for a clean break with the past, Masisi’s alleged association with this corruption has been a source of deep depression. However, for what it is worth, the incoming president has protested his innocence. It is yet unclear how Masisi acquired the money in question (P2 million) but one theory is that Seretse may have given him the money personally but funded his 2017 campaign for the chairmanship of the Botswana Democratic Party.