Ask many small citizen businesses what their worst nightmare is and they’re likely to respond with three words: The Old boys club. Citizen upstart investors trying to crack it in the corporate world spend sleepless nights worrying that “the big boys” may steal their business ideas. Those who seem to be cracking it have to keep looking over their shoulders for “the big boys” who may try to muscle in on their turf.
The case of Mosele Legal Services versus Botswana Insurance Company has that eerie touch of David and Goliath about it, and more: cloak and dagger intrigues, larger-than-life characters, money, power and politics. And Mosele Legal Services are having the worst of it.
The latest twist in the tale turns on a disagreement over who owns the 20 000 legal insurance policy holders whose subscriptions are worth millions of Pula. According newspaper reports “the battle now is about which of the two companies will retain the thousands of policy holders. One local newspaper this week quoted an order from BIC lawyer, Tshiamo Rantao, saying that Mosele was to act as agents for (BIC) for purposes of provision of legal insurance services to “our clients.”
Base Sebonego of Mosele Legal Services on the other hand is up in arms that BIC is trying to wrestle away “our clients which we have worked so much to recruit.” Base Sebonego and Macbain Kaang directors of Mosele Legal Services developed the legal aid insurance product and initially approached GIB, the only Botswana insurance company to underwrite the policy. When GIB collapsed last year, they then approached BIC.
Rantao, however, insists that Sebonego is mistaken saying, “We are the insurer and any agreement that the policy holders have, have with BIC not Mosele.”
Sebonego and Kaang are punching above their weight. The two upstart and youthful businessmen have neither the surnames nor the clout behind them.
Worse, they have already suffered a run of bad publicity. They are squaring off against BIC and its citizen partners, 21st Century Investments, a consortium of Botswana’s business, legal and political giants among them former President Festus Mogae, the Chief Justice Julian Nganunu, former minister Charles Tibone and a number of corporate heavy weights. Besides, Mosele Legal Services who are 100 percent citizen owned are the last of a dying breed in an industry that is in the stranglehold of foreigners. The only Botswana insurance company, GIB, collapsed last year amid allegations that it was hemorrhaged by fraudulent motor vehicle insurance claims.
Mosele Legal Services directors are also worried that industry regulators are biased against them. Non-Bank Financial Institutions Regulatory Authority (NBFISA) Chief Executive Officer, Elaina Gonsalves, whose role, among others, is to adjudicate insurance industry matters, is the wife of BIC Claims Manager, Noel Gonsalves.
The ongoing fight between BIC and Mosele has served to underscore the conflict of interest. Mosele Directors have appealed to the Office of the President to intervene, charging that Mrs. Gonsalves was reluctant to intervene in resolving the issue.
Mosele’s case, however, is not helped by their run of bad press. What the public knows of the two youthful directors has been gleaned from newspaper reports portraying them as fraudsters who were involved in money laundering. The fact that the courts have dismissed the claims as unsubstantiated rumours has done little to help their cause, and until now, they have been cast as the bad guys and BIC as the good guys.
In their letter to the Office of the President, Mosele Directors claim that BIC has waged a smear campaign against them which is part of their clandestine bid to wrestle away their clients. “As recently as March 2008, the Botswana Insurance Company has manifested an indication to usurp the scheme from Mosele Legal Services through clandestine and covert means. They have recently dragged Mosele Legal Services to court on outrageous and unfounded allegations. They have sent letters of demand to the press causing confusion to members of the public and with inimical potential to the continuance of the scheme. They have overtly indicated that Mosele Legal Services members belong to them and have indicated that the relationship will terminate mid July 2008.
Mosele Legal Services had negotiated an underwriting deal with Eagle Insurance and until last week all seemed to be going well. Eagle Insurance has, however, gone back on the deal and Mosele has been left in the lurch. Industry insiders, however, believe that 21st Century big shorts may have used their influence to dissuade Eagle Insurance from entering into the deal with Mosele.
Unless Mosele raises an underwriter before Mid July, the Chief Executive Officer of Non-Bank Financial Institutions Regulatory Authority, Elaina Gonsalves, will close them down for operating illegally and their 20 000 clients would be inherited by BIC. Mosele would be the latest casualty in the long list of citizen insurance industry investors who have had to close down, surrendering the insurance industry to foreigners.
It would also be a blow to young aspiring entrepreneurs who try to enter the business world without the benefit of patronage from their parents and “The Old Boys Club” as it were.
