The Auditor General has stopped short of confirming Batswana’s fears of sleaze at the disbanded multi-million Pula Citizen Entrepreneurial Mortgage Assistant Fund, which was hatched at a Botswana Democratic Party (BDP) Central Committee meeting nine years ago as a secret plan by the party leadership to use public funds to save businesses of some seven party leaders from being auctioned off.
In his report for the financial year ended 31 March 2008, the acting Auditor General, R.B Sebopeng, notes that, “the latest available accounts of the Fund, which have been incorporated into the annual Statements of Accounts for the year under review, are for the financial year ended 31 March 2006 indicating that the accounting for these funds is far from satisfactory.”
The acting Auditor General further states that, “in the past, concerns had persistently been raised that the audited accounts of the fund were not being submitted for incorporation into the annual statements of accounts for the benefit of the national assembly, and for possible examination by the Public Accounts Committee as per Standing Orders of the National Assembly.
“In the last year’s report, it was reported that an investigation was being conducted into operations of the fund and that at the conclusion of that investigation a report would be submitted to the Minister responsible for finance for his consideration. A report has since been submitted to the minister.”
CEMAEF is also being investigated by the Directorate on Corruption and economic Crime following recommendations by the Ministry of Finance and Development Planning.
Sunday Standard has also been informed that attempts to incorporate CEMAEF into CEDA are stalling because the company that had been administering the Fund has not handed over its books of accounts.
Tens of citizen companies are fighting for survival after they were ruined by alleged corruption at CEMAEF.
Patrick Ketsitlile, Managing Director of N&N Fund Managers, the company that won the tender to administer the government fund, is the central figure in what could become one of Botswana’s biggest political and corruption scandals ever.
Allegations against Ketsitlile range from conflict of interest to money laundering. A reconstruction of Ketsitlile’s rise shows that he was an ingenious dealmaker who hatched interlocking companies that exploited loopholes in the fund and trampled the norms of running public businesses more often to serve his desire for wealth.
This inside account of Ketsitlile’s career is drawn from interviews with government officials and associates who went into equity partnerships with CEMAEF and a number of official documents. For example, at some stage while the fund was managing the 25 citizen-owned companies, it became necessary to appoint someone to manage their properties, do rental collection, maintenance, management of lease agreements, cleaning and security.
Ketsitlile formed a company called Panama Investments and awarded it the contract to manage all properties of assisted companies joint ventures with CEMAEF. He later formed another company called Cadeaux (Pty) Ltd, which he contracted to carry out repairs in all properties of assisted companies in joint ventures with CEMAEF. Sunday Standard investigations have been able to establish that N & N Fund Managers, Panama Investments, and Cadeaux shared the same workers. All three companies operated from the same office and were all managed by Ketsitlile.
Investigations further revealed that both Panama and Cadeaux (Pty) Ltd were given CEMAEF jobs without having to go to tender.
Sunday Standard investigations also turned up information that Panama and Cadeaux at times claimed money for jobs they had not done, like the upgrading of the electrical system and repair of the roof at Harbour Investments. It also emerged that a BMW X5 and Land Rover Discovery driven by Ketsitlile and his wife belong to N&N Fund Managers but have been registered under a company called Intercontinental Merchants (Pty) Ltd, a company owned by Ketsitlile and one Devdeven, who is co-manager of N&N Fund Managers. It is understood that Intercontinental bought the vehicles as agents for N&N Fund Managers and Intercontinental is paid a monthly fee for the cars.
Scores of citizen investors who were hoping the fund would help them are, however, having the worst of it. Most see themselves paying hefty monthly installments to support the network of companies set up by Ketsitlile while their mortgages are stuck in one place.
CEMAEF board chairperson, Ina Kanji told Sunday Standard, “I m not in a position to comment about the activities of CEMAEF and if there are any investigations conducted by DCEC you better ask them.”
When asked about the disappearance of the alleged millions, she replied that “I do not know anything”.
Since the beginning of last week, The Sunday Standard team tried to track the manager of CEMAEF, Mr Ketsitlile, at his office in Commerce Park but he was never at the office.
The multi-million Pula fund has been a lightning rod of controversy since it was hatched at a Botswana Democratic Party (BDP) Central Committee meeting nine years ago. It was initially a secret plan by the BDP to use public funds to save businesses of some seven party leaders from being auctioned off. Among businesses which were to be saved were those of some Cabinet ministers and BDP Central Committee members.
The party secretly set up a task force comprising Education Minister Jacob Nkate, Trade Minister Neo Moroka, then Managing Director of BP and former minister, Joy Phumaphi. The task force report was to be presented to the then party Chairman, Ponatshego Kedikilwe.
The task force, however, recommended against the proposed bail out plan, arguing that government did not have enough money to go around all cash strapped citizen entrepreneurs. The task team allegedly established that it would take about P17 million to bail out the seven BDP leaders who were facing loan foreclosures. They cautioned the party against extending the facility to a few party members, saying it could turn into a political scandal.