Former Kweneng District Council Chairman Geoffrey Sibisibi did not pay a cent for his 40 percent stake in Bluthorn. Despite investing a whopping 53 million Rand to set up the company, founder Eune Engelbrecht simply just donated almost half the company to Sibisibi.
Speaking before the Master Chipo Gaobatwe and creditors recently at the Gaborone High Court Engelbrecht was at pains to justify the donation.
Records from the scandal, which has seen district councils, trade unions, and individuals lose hundreds of millions in investments, indicate Engelbrecht and Sibisibi were Bluthorn’s founding Directors at 60 and 40 percent shareholding respectively.
Sibisibi would later transfer his shares to his daughter Kelebogile Sibisibi.
Asked by the moderator, attorney Sipho Ziga to explain just what Sibisibi did to earn the shareholding, Engelbrecht could not provide a definitive answer suffice it to say the then Council Chairman acquired the shares through ‘sweat equity’.
“So, I’ve never sold shares in Botswana. It’s always been sweat equity related,” the Bluthorn founder told Court.
“How did Mr. Sibisibi …and ultimately Kelebogile Sibisibi then become shareholders,” Ziga repeated his question, to which Engelbrecht responded “They were issued shares Sir…It’s a donation. It’s sweat equity. For work and contribution to the larger group. I mean, that’s how I normally did it, Sir. I know it’s against the grain but….” When asked to specifically state what it is he meant by ‘sweat equity’ that the Sibisibi’s did to earn the shares the Bluthorn founder could only say “…I suppose the big thing, the big motivation at that stage was localizing because it wasn’t a multinational company owned outside. And idea was to localize the group.”
Ziga was however still not satisfied: “But the question I’m asking is, I’m particularly concerned with how they became shareholders. I know you wanted to localize, and you’re saying that was sweat capital, meaning they had to work for the shares they got. Here’s what I’m trying to establish, what work they did. Okay.”
Engelbrecht attempted to divert attention from the Sibisibi question by speaking about other eventual directors in Martinus van der Merwe, and others but Ziga would have none of it.
“No, no, no. I’m just speaking about the shareholders. Because you said at the beginning, the shareholders were yourself at 60% and Kelebogile Sibisibi at 40%. And I’m trying to establish how the subscription happened, such that the shareholding became like that,” the moderator asked again, to which Engelbrecht again responded: “Sweat equity Sir. I don’t know how else to explain to you that ideas when you, I suppose, it’s like you start a business and you all work together to get to a point where it’s quite valued.”
Ziga was still not satisfied with this response. “You’re answering the question, but you’re not answering it fully. Say, you then work for a company. And what I’m trying to establish is what work your co shareholders did. You paid 53 million, isn’t it…then what did the 40% shareholder contribute to this venture? If it’s work, what work did they contribute,” he asked again. And the respond was still lacking in clarity. Engelbrecht said it was difficult to explain the “sweat” he spoke about. “I mean, I’m not trying to repeat the question. It’s just I mean, let me give you an example, Bluthorn Fund Managers, I think there was 30 or 40% shares that were issued to two employees. And I’m sure they can recall as well, I mean, one of my biggest things at that stage, or arguments that I had. When you expect people to support local businesses, and help them make money and help get rich, how do you get people involved in the business to actually feel that they are worth something or enough and able to help other people.”
The Bluthorn founder could not provide documentation to support his claim that Sibisibi or his daughter worked for the shares as he implied.
“I think one of the biggest problems is, you know, everything that was electronic, doesn’t exist anymore. You know, we don’t have emails, we don’t have anything. I mean, the server that was left in the care of the strategy manager was wiped… it’s not that easy to go back and just look for certain records because we don’t have email addresses. We don’t have records of emails. I mean, it’s very difficult,” Engelbrecht said.