Four Directors of the Botswana Insurance Holdings Limited are at the centre of a brewing controversy and shareholder disquiet over the purchase of P30 million worth of shares in a subsidiary of the Group.
MacLean Letshwiti, Keith Jefferies, Regina Vaka and Victor Senye formed a consortium and bought a stake in BIFM, which is an asset management arm of BIHL.
Other shareholders are up in arms against the purchase, which they say amounts to illegal corporate practice.
BIHL, which is listed with the Botswana Stock Exchange, is the fifth largest company on the bourse following on the heels of the four commercial banks that are the blue chips on the market.
Letshwiti is the Chairman of BIHL; Dr Jefferies is the Non-Executive Director responsible for investments.
The other two; Vaka and Senye are co-Chief Executives, with Senye heading the Asset Management wing (BIFM) while Vaka is head of Botswana Life.
Senye confirmed to Sunday Standard that together with the other directors he bought 10 percent of BIFM from the majority shareholder Sanlam.
He said because of the low value of the overall stocks, they did not have to inform the Botswana Stock Exchange about the transaction.
“I do not know what the disquiet is all about because this is part of citizen economic empowerment that we have been fighting for over the years,” he said.
The other shareholders of BIHL, however, do not buy Senye’s story of empowerment.
They say if Sanlam wanted to dispose of a portion of their shareholding they should have followed the procedure of going to the open market so that every interested person could have tried to buy a stake.
“Through this self dealing transaction, fiduciary officers of BIHL have usurped corporate assets. Shareholders, apart from Sanlam, were not aware that any piece of BIFM was up for sale. No cautionary or shareholder letter or circular was sent out to alert other shareholders that part of the assets they own were being carved out to a special group of the company’s officers,” said one shareholder of BIHL who talked to Sunday Standard on condition of anonymity.
“The price paid by Sanlam and this group of officers for the piece of BIFM, whether fair value or not, is not the biggest issue. The real issue is why would profitable and well reserved BIHL secretly sell part of its core assets to a select group when anyone can get exposure to those assets through holding BIHL shares? What should have happened is that all shareholders were to be alerted that pieces of assets they own were up for sale, whether majority shareholder consent is needed or not. This then should be announced in the papers to attract as many buyers as possible so that the assets are sold at the best possible price,” continued the shareholder.
Speaking for the consortium, Senye said everything was done above board. He said the people who benefited form a part of what he called the “Retention Committee” which is led by the Chairman.
“Some other directors were invited but they said they were not interested. So we decided to go ahead with just the four of us and Sanlam agreed,” said Senye.
He said what is important is to know that the consortium’s shares are only limited to BIFM and do not cover Botswana Life.
Sanlam owns 54 percent of BIHL with the remaining 46 percent owned by such investors as the Botswana Public Officers Pension Fund.