Wednesday, February 8, 2023

BPOPF investment in Wilderness Safaris raises eyebrows

The Office of the President and Capital Management Botswana (CMB) Tim Marshland, a local bank Executive Chief Officer and prominent lawyer were allegedly complicit in investing millions of pensioner’s money in Wilderness Safaris.

Also fingered in the deal is former Vision 2016 Chairperson and founder of Botswana Stock Exchange listed broker Motswedi Securities. Martin Makgatlhe

While she denied any knowledge of the involvement of the Office of the President, the bank executive and the lawyer  in the shady deal, Botswana Public Officers Pension Fund (BPOPF) Chief Executive Officer Boitumelo Molefe confirmed that pensioners’ money was not supposed to have been invested” in listed equities” or securities(Wilderness Safaris).  

CMB managed a private equity fund named Botswana Opportunity Partnership (BOP) which was a partnership between the CMB and BPOPF.  

“This is one of the breaches that BPOPF stated when we terminated CMB as the General Partner”, said Molefe

Asked if former President Ian Khama was involved in ensuring that a certain foreign investor was not able to buy a significant block (estimated to be 25 percent in Wilderness Safaris) his Senior Private Sectary Brigadier George Tlhalerwa said queries should be referred to government spokesperson Jeff Ramsay.

Molefe explained that the BPOPF Board was not involved in investment decisions regarding BOP.

“The General Partner, CMB made the investment decisions. This is the nature of private equity,” she said.

On claims that the transaction was done in South Africa to ‘bypass the eyes of’ Botswana Stock Exchange (BSE) Molefe said “Wilderness is a dual listed company. I cannot comment on why the transaction was done on the JSE as we do not have the details underlying each transaction.”

She added that “We can only ever get access to the details if Viltry is confirmed as the General Partner. This process will be the subject of arbitration.”

Observers said that more worrying was that an “obscene amount of commission was paid to local broker Motswedi Securities led by founder Martin Makgatlhe to complete the transaction and this cost was borne by Botswana pensioners.”

Replying, Molefe said “I cannot comment on this matter as we are not privy to the details of the transactions. We can only ever get access to the details if Viltry is confirmed as the General Partner. This process will be the subject of arbitration.”

Wilderness Safaris Commercial Director said “We are advised that BPOPF owns a total of 16.2% of the equity of Wilderness, acquired through a series of transactions.”

He added that “Furthermore, we are not able to comment on any roles allegedly played by third parties in transactions relating to Wilderness shares:  any questions in that regard should be referred to the sellers or the buyers of the shares in question, or the third parties themselves.”

For his part, Makgatlhe said the securities industry is a highly regulated one, regulated by both NBFIRA and the BSE.

“Under these regulations are the BSE Members Rules that regulate the activities of the members (brokers) very closely. Included among these are how Members (i.e. stockbrokers) handle clients’ dealings with them, which of course, are of a very confidential nature,” he said.

 Therefore, Makgatlhe said, any BSE Member (including Motswedi Securities) cannot disclose in specific terms, any information pertaining to their clients dealings to a third party. “This would immediately put them on a collision course with the regulators,” he said.

 He said also covered under the strict regulatory oversight, is the commission that brokers charge to clients.

“These commission rates are set by NBFIRA and enforced by the BSE. Therefore any deviation from the norm is a transgression on the part of the broker, and would be picked up immediately by the Exchange, in the first instance, and later by both the Exchange (again) and NBFIRA when a broker submits its quarterly returns to both,” he said.

According to Makgatlhe it is very easy to determine when such transgressions occur, and these would immediately be of interest to the regulators.

“The underlying client would also be able to determine if any of their trades had been executed outside the set ceilings. Therefore only the client (including the underlying owner of the asset), the BSE and NBFIRA are the only ones who can say if such a transgression had been committed, if committed,” he said. On allegations that the transaction was carried out in South Africa at the expense of BSE, Makgatlhe said “please note that Wilderness Safaris (like Choppies) is dual listed on the JSE, with the primary listing being the BSE. Therefore, any stock so listed can trade on any of the counters at any given time, depending on which counter would provide the required liquidity at that specific instance.”

He further stated that “In such cases, shareholders of the company would have given consent that their company can be dual listed (such as happened with the case of Wilderness Safaris), so we suppose the question of whether it benefits them that their shares are dual listed on another exchange can best be put to them.” 


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