Latest information suggests that Capital Management Africa (CMA) has acquired Fleming Asset Management Botswana through its subsidiary Capital Management Botswana (CMB) for P22 million.
CMB currently runs Botswana Public Pensions Fund (BPOPF)’s other private equity fund, Botswana Opportunities Fund (BOP) which has grown to P880 million from P500 million.
The CMA transaction of acquiring the underperforming Fleming Asset Botswana is reportedly to be 50 percent and have taken place last week at a giveaway price tag of P22 million.
When contacted CMB Chief Executive (CEO) Rapula Okaile said BPOPF was not affected by this transaction adding that any governance issues would be addressed post closure of the transaction.
“The details of the transaction are subject to normal confidentiality clauses,” said Okaile.
He believes that Flemings is a prime fund manager with a proud track record spanning several decades. He also stated that CMA was engaging with, and seeking, suitable potential citizen shareholders to inject vigour into Flemings, post the challenges Flemings has faced in 2016.
Last year, BPOPF announced a huge step of terminating all its contracts with Fleming Asset Management Botswana.
When contacted, BPOPF CEO Boitumelo Molefe said the transaction was purely CMB’s decision, adding that the fund was aware of the transaction.
“BPOPF will continue conducting itself in a responsible manner and good corporate governance for the benefit of its members,” said Molefe.
Quizzed on the P22-million CMA acquisition transaction of Fleming Asset Botswana, Non-Bank Financial Institutions Regulatory Authority (NBFIRA) expressed shock over the deal.
NBFIRA Deputy CEO (Regulatory) Sriram Gade stated that they had not received any application or request in that respect from any of the entities mentioned in the questionnaire. Gade is of the view that this then implies that if any such transaction is in the offing, it is still at a discussion stage among the buyers and sellers.
“All transactions involving a change in controller, shareholder, a merger or an acquisition must be approved by the Regulatory Authority,” he stated.
Gade cited Section 4 (1) (b) of the NBFIRA Act 2016 which states that regulated entities are aware of their reporting responsibilities to the Regulatory Authority as guided by Schedule 1 clause 4 (1) (f & g) of the Market Intermediaries Conduct of Business Rules which prescribes that: “A market intermediary shall provide the Authority with four weeks advance written notification of the following matters: any change in controller or shareholder; and a substantial acquisition”.
Competition Authority also uninformed
The transaction has also not been notified with the Competition Authority, the authority confirmed on Thursday.
Director Communications and Advocacy, Gideon Nkala said “we will take necessary steps and inquire whether the alleged transaction has indeed happened and whether it meets the threshold for merger control.
Nkala stated that for a transaction to be notified to the Competition Authority, it has to be an acquisition of control as per section 52 of the Competition Act, adding that the transaction would have to meet thresholds for merger control as per Section 54 of the Competition Act, read together with Regulation 20 of the Competition Regulations.
According to Section 54 and Regulation 20, a merger is notifiable if the annual turnover in Botswana of the target enterprise(s) exceeds P10 000 000 and also the assets in Botswana of the target enterprise(s) exceeds P10 000 000.
“The enterprises concerned would, following implementation of the merger, supply or acquire at least 20 percent of a particular description of goods or services in Botswana,” he said.