The Botswana Public Officers Pension Fund (BPOPF) is reportedly in the process of rescuing embattled life insurer Bramer Life, which was recently placed under statutory management by the Non Bank Financial Institutions Regulatory Authority (NBFIRA).
Sunday Standard investigations have revealed that the local life insurer with get a new lease of life from the multi-billion Pula BPOPF. Bramer Life Insurance (Pty) Ltd has also confirmed it is in the process of finalising a deal in which it will sell shareholding to BPOPF, a development that will enable the company to continue operating. Statutory Manager of Bramer Life Insurance (Pty) Ltd, Nigel Warren-Dixon of KPMG said in an interview that they are in the process of finalising a deal that will enable the insurer to continue operating.
“Commercial transactions by nature are confidential and cannot be conducted through the media until they are concluded. A media briefing will be arranged shortly to update the public on the status of Bramer Life,” said Warren-Dixon.
He further revealed that the Bramer Life license is endorsed as not transferable and remains the property of NBFIRA, while British American Investment Co (Mauritius) remains Bramer Life’s technical partner.
“A technical partner provides such support as required by the business from time to time depending on the plans of the business. But the majority shareholder stake is available for sale,” he said.
Currently the shareholders of Bramer Life are Sikalesele-Vaka and Bramer Group of Companies. Contacted for comment, BPOPF acting Chief Executive Officer (CEO) Lesedi Moakofhi said she is not aware that BPOPF is in the process of acquiring a stake in Bramer Life.
“Making commitments into a private equity fund, you become a limited partner and as a limited partner you do not make investment decisions of that Fund. If you do you lose your limited liability status,” said Moakofhi.
She pointed out that at this point in time BPOPF does not get involved or has not been updated on in investments by appointed equity funds. She added that such update would normally been have been done at investment committee level and the board, and that it has not been done as yet. Bramer Life was placed under statutory management after its Mauritian parent company; BAI Co was liquidated in the wake of a P6.7 billion financial scandal. BAI Co, which owns 80 percent of Bramer Life, was placed under conservatorship in Mauritius while the banking licence of its sister company, Bramer Banking Corp limited (BBCL) was revoked. At the time, Sikalesele-Vaka expressed confidence that her business will remain profitable in the long run despite the crippling scandal.
“Bramer Life Insurance is an independent company registered under the laws of Botswana and regulated by NBFIRA. We were issued with a license after due diligence and a thorough vetting process that took close to a year. Our business operates independently from any of the sister companies in Mauritius. We have a separate Board of Directors and management team that runs the Botswana operation,” she said.
The Mauritian Central Bank pulled Bramer’s license after it found strong evidence that the company was engaged in a Ponzi scheme that exceeded $690 million. Mauritian Prime Minister Anerood Jugnauth was quoted in the media saying investigations were underway to determine the depth of the ‘unprecedented financial scandal.’ The lender came under scrutiny after an on-site examination conducted between Jan. 22 and Feb. 20 uncovered a ‘number of significant deficiencies,’ among them ‘large withdrawals of deposits’ that affected its liquidity and capital. But Sikalesele-Vaka maintained that Bramer Life was never involved in the operations or decisions of the Mauritius-based bank and was not accountable for the events unfolding there.
“Yes, we enjoyed the advantage of being part of a parent company because we leveraged on the strength of the brand to penetrate the market. Unfortunately, in this case the brand affected Bramer Life negatively,” she said.
She further explained that Bramer Life Insurance is in charge of its operations and has never relied on Bramer Banking Corporation to generate profitability. While she admitted that the liquidation of Bramer Banking Corporation will have a negative impact on the Bramer brand, Sikalesele-Vaka said it will not affect the profitability of Bramer Life.
“The most significant risk in this case is brand association because we carry the same name. Other than that, Bramer Life is autonomous; it runs its operations from Botswana and will be able to move forward even if Bramer Banking Corp is liquidated,” she said. “We were fortunate because this incident was discovered earlier; a later discovery might have had more serious implications. We are working closely with NBFIRA to take appropriate action to ensure that the public interest is protected.”