Tuesday, October 4, 2022

BSE broke its own its own rules with BTCL IPO – expert

The Chief Executive Officer of the Botswana Stock Exchange, Thapelo Tsheole, has defended the decision to restrict the Botswana Telecommunications Corporation Limited to citizens when the bourse’s own rules allow everyone to buy shares. As the first state-owned enterprise to be privatised, BTCL’s initial public offer (IPO) was launched in December last year. The Public Enterprises Evaluation and Privatisation Agency has valued BTCL at P800 million with its shares split into 800 million units at the value of P1 each.

The government has offered 44 percent of its BTCL shareholding to citizens and citizen-owned companies through the IPO, has retained 51 percent and committed 5 percent to citizen workers. Through this formula, government retained 408 million shares while 40 million were reserved for the citizen workers of BTCL and 352 million made available for Batswana. Non-citizens don’t feature anywhere and at BSE’s Inaugural Listings Conference, the Managing Director of Investec Asset Management, Martinus Seboni, asked why BSE had to break its own rules by restricting the BTCL IPO to citizens. This, he pointed out, went against the openness it touts about itself.

In response, Tsheole said that this kind of positive discrimination was necessary and not peculiar to Botswana. He gave Mauritius and South Africa as examples of countries that have also exercised this discrimination in order to economically empower their citizens. With regard to the latter, Tsheole referred to the Black Economic Empowerment programme – a racially selective programme launched by the South African government to redress the inequalities of apartheid era. Contributing to the discussion, Tsametse Mmolai, who is BSE’s Listing and Trading Manager, said that the stock exchange works hand in hand with the government to develop the capital market.

In the particular case of BTCL, he said that the shareholder (being the government), had a specific goal with what it wanted to achieve by selling the shares ÔÇô empower its citizens ÔÇô and that it applied for a waiver which was granted by BSE’s Main Committee. Justifying the latter’s decision, Mmolai said that if privatisation comes with certain conditions, the Committee will have to play along.

However, Tsheole did admit that the restrictions have a “level of impediment” and revealed that “going forward, there is a possibility that the restrictions will be removed.” The privatisation process is being spearheaded by PEEPA whose chief mandate is to develop privatisation strategies and implementation plans for cabinet approval.


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