Thursday, June 20, 2024

Botswana Lotto on hold as Ithuba challenges tender award

Ithuba Botswana, a subsidiary of Ithuba Holdings, the operator of South Africa’s national lottery has challenged Botswana Gambling Authority’s decision to award the multi-billion Pula lottery license to Grow Mine Africa. Ithuba Botswana have filed a notice with the High Court in Gaborone to challenge the tender award.The company, selected as the ‘Reserve Applicant’ in the process, wants the Court to review and set aside the Gambling Authority’s decision. license was awarded to Grow Mine Africa in June this year three years after the tender was floated in May 2017.

The Gambling Authority were expected to be at advanced stages of completing a National Lottery License Agreement with Grow Mine. Ithuba Botswana wants the process to be suspended pending their application for review.In setting out their grounds for the appeal Ithuba Botswana outlined various pieces of legislation which they say were flouted in the process of determining the eventual winner.The company cited in their Filing Notice the Gambling Act and Regulations, as well as Public Procurement and Asset Disposal Act (PPADA) and Regulations guiding the awarding of such tenders.“It will become apparent that the entire process adopted by the Gambling Authority throughout the course of this tender was contrary to both the letter and the spirit of the relevant legislation.”The company argues that the Gambling Act stipulates the steps and time periods to be followed in the grant of a lottery license. The provisions, they say, make it clear that the award of a lottery license is a public process, requiring extensive engagement with the public, and it confers rights on the public to object to applications and have those objections ventilated.

“In terms of section 34(2) of the Gambling Act, read with Gambling Reg 67, the applicants for a license are required to publish their applications in two consecutive issues of the Gazette (or stipulated newspaper), affording the public 30 days from the last publication, in order to object to the applications.”The court papers go on to state that there has to be a period of investigation in accordance with the Regulations saying the Gambling Authority is required to conduct a thorough investigation into each applicant’s background and determine their suitability.“The Regulations confer extensive special investigative powers on the Gambling Authority, including the power to summon witnesses, a clear indication of the proactive role of the Gambling Authority….Following that investigation, the Gambling Regulations contemplate that the Gambling Authority sets a date for a hearing for each and every one of the applications for a license.”

Ithuba Botswana argues that the entire process in relation to public participation in the tendering process was entirely dispensed with. That there was no publication of the applications, no public investigation, and no public hearings where the Gambling Authority could entertain objections to the applications.“This is most apparent in that the identity of bidders remained elusive until only after Gambling Authority had taken its decision to appoint Grow Mine. ”The company also contends that the Gambling Authority’s disregard for legislation also extends to the PPADA and PPADA Regulations.They say the Board failed to examine tender instructions and conditions of contract contained in each bidding package prior to issuing of a Tender Notice contrary to PPADA and PPADA Regulations. The specific procedure regarding the opening of bids was also not followed, the company says.

The evaluation methodology prescribed by PPADA Regulations which requires that the scores in relation to the technical and financial evaluations be added together to yield the winning tender was also not followed according to the court papers. Ithuba Botswana also cite among their grievances, “refusal” by the Gambling Authority to allow bidders to supplement their bids following the extensive three year delay in awarding of the tender. The affidavit, citing several other irregularities in the lotto tendering process, was deposed by Ithuba Solutions’ Chairman of the Board of Directors Todd Mangadi. The company claims the Gambling Authority “double counted” the issue of citizenship. Ithuba Botswana is a consortium led by Ithuba of South Africa and two locals in Mangadi, and Benson Madisa. Ithuba had set aside 10 percent of shareholding for the disabled and women.

Up to a point the proven technical expertise of Ithuba Botswana and the promising shareholding to incorporate minority groups had given the group a head-start and a lead in the score card. But towards the end things started to shift as Grow Mine Africa overtook Ithuba Botswana. The single largest shareholder in Grow Mine Africa is Parks Tafa, a senior partner at law firm Collins Newman & Co who owns 10 percent through one of his companies. The technical partner is a Mauritius company who will effectively be managing the business. Other partners include Sefalana, businessmen Carthage Mathage, Moathodi Lekaukau, and Mclean Letshwiti, and businesswoman Tumie Ramsdan among others. After Grow Mine Africa won the bid, Ithuba Botswana was made the reserve bidder which effectively means that should negotiations between Botswana Gambling Authority and Grow Mind Africa not materialize, Ithuba Botswana will automatically become the next preferred bidder and assume negotiations.

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