Internal documents at the privatization agency, PEEPA have surfaced highlighting corporate governance concerns that the management had during the early stages of the privatization of Botswana Telecommunications Corporation.
BTC has recently been privatized.
Under the recently announced scheme Government plans to offload 49% of its shareholding to citizens.
BTC, which has since had its name changed to BTCL will also be floated on the Botswana Stock Exchange.
Documents, of which Sunday Standard is in possession of point to the discomfort among PEEPA staff, led by the then Chief Executive Officer, Joshua Galeforolwe that one of the PEEPA Board of Directors at the time, Parks Tafa was conflicted.
Tafa and his law firm were part of a consortium, led by Standard Bank of South Africa that was bidding for transaction advisory services for BTC privatization.
Galeforolwe and his team state that their fears emanated from the fact that as a Board member Tafa had enjoyed access to various PEEPA reports on BTC privatization.
To allay their fears PEEPA executive team sought advice from IODSA (Institute of Directors in Southern Africa.)
IODSA are specialists on corporate governance.
Another opinion was also sought from a retired High Court judge, Peter Collins of Collins Consultants.
Both confirmed that indeed Tafa was conflicted.
“In giving advice, the IODSA was also requested to give due regard to the fact that the director concerned has had access to the information and participated in the approval of the BTC privatization strategy which included the consideration of Government’s further liberalization initiatives of the telecommunications sector,” reads one of the PEEPA documents.
“It is also noting that the director’s firm had been short-listed with another bidder, the Deutsche Bank, which later withdrew from submitting detailed tender proposals.”
Tafa it turns out was also a director of Stanbic Bank Botswana, which is a subsidiary of Standard Bank of South Africa.
In its opinion the IODSA confirmed that there is a clear conflict of interest as the director concerned has had inside knowledge of the transaction which places him ahead of other bidders.
“Unfortunately for the PEEPA Board, even if the conflict could be appropriately managed and it could be proved that the director concerned did not leak confidential information to the consortium, the perception f the public and competing bidders will always be that the process was flawed, and that the Standard Bank consortium had unfair advantage in that they had access to confidential information that was not available to other bidders,” said IODSA in its advice to PEEPA.
“If PEEPA were to award the contract to the standard bank consortium this could open the organization and the Board up to legal challenges which could be difficult to defend. If the director concerned has broken his fiduciary duty of confidentiality by passing on the information to the consortium he too has placed himself at considerable personal risk,” continued IODSA.
A letter from Tafa’s consortium said he had made all the necessary disclosures and declarations. The “Parks Tafa has not seen any submissions by bidders other than the Standard Bank Consortium. And Parks Tafa has not consequently compromised himself or the consortium by his involvement in our bid,” said a letter from the Corporate Finance Director at the Standard Bank of South Africa, Tshakalisa Matiwaza.
For his part, Peter Collins wrote to PEEPA that “… on the basis of the documents with which I have been briefed, there is a prima facieconflict of interest by the bidding consortium in question as outlined in your letter asking them to show cause. If there is no response to the letter then, a prima facie case will be become proven. If there is a response then one needs to pay close attention to it and re-visit the issue.”
Tafa is a prominent lawyer and senior partner at law firm, Collins Newman & Co.
Among many prominent clients in the country which includes commercial banks and parastatals, Tafa has President Ian Khama, the ruling BDP, and the Khama family as some of his top most clients.
Talking to Sunday Standard Tafa said the current dispensation under which BTC is being privatised is different from the old one where his law firm was bidding with Standard Bank.
Under this new one Collins Newman & Co is involved but in partnership with Deloitte.