Wednesday, January 27, 2021

Canada uncovers Botswana’s P150m e-government corruption

The Canadian corruption buster has charged Imex Systems Inc boss for corruptly winning the Botswana P150 million e-government contract.

While Canadian authorities confirmed last week that they had laid charges against Imex Systems Chief Executive Officer Damodar Arapakota for bribing a Botswana public official to favour Imex system in the award of the lucrative tender, the Directorate on Corruption and Economic Crime (DCEC) in Botswana did not seem to be doing anything about the alleged corruption.

 Details are emerging as to what could have led to the behind-the-scenes negotiations between the Botswana Government and the Canadian company to cancel the P150 million contract for the controversial e-government project.In 2018, Sunday Standard reported that the government was in the process of striking an “in principle settlement” deal with Imex Systems Inc. to pay for costs incurred for failing to sign a contract for its e-government system project.

In a media statement, a copy of which has been seen by Sunday Standard, the Royal Canadian Mounted Police (RCMP) said: “The RCMP National Division Sensitive and International Investigations section laid charges against Mr. Damodar Arapakota for bribing a public official from Botswana under section 3(1) of the Corruption of Foreign Public Officials Act.”

In the statement, Insp. Denis Beaudoin, Officer in Charge of the RCMP International Anti-Corruption Investigative Team said: “It is alleged that Mr. Arapakota, a former executive from IMEX Systems Inc., a Canadian company located in Toronto, provided financial benefit for a Botswanan public official and his family.” He did not mention the name of the Botswana official. A three-week investigation by Sunday Standard shows that the alleged recipient of the bribe has not been prosecuted in Botswana. Beaudoin said that an investigation referred to as “Project Alkaloid” was initiated in October 2018, after the new management of the company self-reported allegations of Mr. Arapakota’s illegal acts to the RCMP.”

He also notes: “Canadian companies may face requests for bribes in many international business transactions, including trade and investment. This case is a good example where raising awareness and providing information to businesses and government officials is a key approach that is proven to help prevent and detect international corruption. IMEX Systems Inc.’s self-report to the RCMP demonstrated their leadership and professionalism towards foreign bribery.”A spokesperson for RCMP had responded to this publication at the time of going to press. Immediate comment from the DCEC was also not available.

Identified by the local media at the time as a company president and chief executive officer Damodar Arapakota had at the time reportedly launched an urgent application with the high court to protect their rights as the government dragged its feet to sign the contract but the case seems to have fizzled out.At the time Sunday Standard reported that the Ministry and PPADB had engaged in a war of words over the project.  The Ministry had insisted that the project should go ahead while PPADB maintained that it should be cancelled. At the time, Permanent Secretary in the Ministry of Transport and Communication Kabelo Ebineng would not be drawn into discussing the matter. “What we are discussing is commercial. We know there is a transaction we are involved in with that company but I cannot comment further than that,” he said. Ebineng had not joined the civil service at the time the controversial tender was awarded.

PPADB Public Relations and Education Manager Charles Keikotlhae on the other hand told this publication at the time that: “Please be informed that the Public Procurement and Asset Disposal Board (PPADB) is constrained to respond to your questionnaire as the matter of your enquiry is still before the courts.” In its update to shareholders, Imex Systems Inc stated in 2018 that it was in dialogue with the Government of Botswana and expects to come to settlement terms in the near future.

“The Company has entered into arbitration discussions with the Government of Botswana to settle the amounts billed to them under the previously announced $14 million contract,” the company said. It added that “both parties are working to resolve this situation in the near term for the approximately $5 million claim that the Company has previously disclosed as accounts receivable in its September 30, 2017 balance sheet.”

The company also revealed that “the delay in filing the 2017 Annual Audited Financial Statements is principally related to the Company requiring additional time to complete a restatement of the audited financials statements for the years ending December 31, 2016 and 2015 due to the Company taking a write-down on the amounts owed to the Company under its contract with the Government of Botswana.” Sunday Standard was unable to establish how the negotiations between the parties were concluded.

Former Transport and Communications Minister, Elias Magosi and now Permanent Secretary to the President was then quoted as saying in a letter awarding the company the project that: “The Public Procurement Asset and Disposal Board (PPADB) at its meeting of the 2016 acceded to the Government Modernization Office (GMO) request to award …tender to Imex Systems Inc. The award is effective immediately and the project is required to be executed in 24 months. You will be invited to come and sign the contract after the festive holidays.”  

In a separate article in 2017, Sunday Standard reported that at least 35 civil servants were hired as Assistant Systems Analysts for the e-Gov office project in the Ministry of Transport and Communications. The expiry date of their contract was September 2018.But, according to the report, the government terminated their contracts on 31st January 2017 citing “normal and established Public Service procedures were not followed by the Ministry in employing you and it has not been possible to regularize your employment.”

The Ministry also added: “There are currently no funds to sustain the payment of your salary and all other applicable benefits that you would otherwise be entitled to.”

“I have in addition to the above on 11/01/2017 called you to a meeting whereat I addressed these issues and pointed out to you the attendant irregularities as well as the financial inability of the Ministry to comply with the contract,” said former Permanent Secretary Elias Magosi in one of the letters addressed to one of the former employees.

Through their lawyers, Motlhala Ketshabile and Company, the former employees stated that their appointment letters were signed by former Permanent Secretary Neil Fitt and copied to the Director of Public Service Management and the Accountant General. The lawyers say that as far as they know, all the public service procedures were followed before they were employed.

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