Saturday, April 4, 2020

Allegations of economic crime at BPOPF should be investigated thoroughly

The goings on at the Botswana Public Pensions Officers Fund (BPOPF) should not be allowed to die quietly.

There is all likelihood that, with a little bit of investigations, skeletons are bound to fall out of the closet.

We hope that the much talked about probing of the Fund by the Registrar of Pensions will be accorded the same stature that is given commissions of enquiry.

Clearly, there is a lot to investigate, and we can only hope and pray that the net will be cast as wide as possible, not only through use of well qualified and capacitated people, but by inviting for submissions as well.

The importance of the Botswana Public Officers Pension Fund to the economy of Botswana cannot be overemphasized.

To get a proper feel of how important the Fund is to Botswana’s economy, we should just take a look at the combined investment management and administration fees paid by BPOPF during the last year (20006) alone.

The figure is somewhere in the region of P150 million.

Clearly, this means the amount paid since the first mandates were issued seven years ago stand at around P1 billion.

There is no debate of what P1 billion can achieve for Botswana’s economy in diversification and other developments in seven years.

It is for these reasons that Batswana, not just those who are members of the Fund, have a right to be concerned whenever allegations of corruption and trustee ineptitude and impropriety are raised.
The allegations of impropriety raised against the Fund’s trustees are very serious.

More has to be done before the Fund can regain its honour.

One area that has to be examined over and above how the Fund is managed is the extent to which trustees are well versed with their fiduciary duties.
Given the basic nature of some of the mistakes they have made, there are serious suspicions regarding the capacity of most of the trustees.

One of the starkest and most elementary mistakes made by the trustees has been their failure to issue each investment manager with a properly articulated investment policy statement.

It also has to be clearly spelt out what criteria the Fund employs in its choice of investment managers.
In here will be addressed of how it has come about that Alexander Forbes found themselves being both asset managers, advisors and consultants.

To what extent does this failure to diversify expose and concentrate the Fund’s risk.

It clearly has to be determined that if indeed Alex is doing all these tasks, then who performs or will probe Alexander Forbes with due diligence on behalf of BPOPF.

The answer is that given its multifaceted roles, Alex might end up probing itself.

In here lies suspicions of a conflict of interest, a scenario beefed by the case of directors sitting on several arms of the business.

It is, of course, important that people commissioned to investigate BPOPF are people thoroughly qualified to do the job.

But just on the face of it, it does not seem that trustees of BPOPF maintained the requisite detachment between themselves and the Fund’s service providers.

Even on face value, there is a lot of apparent conflict of interest that still has to be clarified.
Issue has been made of the relationship between one of the asset managers also doubling as the Fund’s property developer.

That evidently raises eyebrows.

Clearly, there is a lot of circumstantial evidence that there is more than meets the eye at the BPOPF.
Again, we can only welcome the decision by the Registrar of Pensions to institute an enquiry, with the hope that not only will the enquiry shed more light into the operations of the Fund, but also improve what are in some cases clearly rotten examples of corporate governance.