Saturday, October 31, 2020

CMB case in new twist

The case in which creditors of liquidated Capital Management Botswana (CMB) are demanding compensation has branched off into a new twist.

Its former directors are now fighting with attorney for the CMB liquidator Peter Collins over who will receive about P20 million expected from one of its debtors.

In a letter dated 6th February, former directors of CMB, Rapula Okaile and Tim Marsland, through their attorneys Kanjabanga & Associates have written to Goldwing (Pty) Ltd which owes CMB P20 million detailing their interest in the envisaged payment.

“Our clients understand you have since entered into an agreement with the liquidator of Capital Management Botswana (Pty) Ltd for the repayment of P20, 000, 000.00 (Twenty Million Pula) previously advanced to yourselves,” reads the letter addressed to the Director of Goldwing Pty Ltd.

The letter also stated: “Our clients have interest in the said contract as former Directors and kindly may we request a copy of the said agreement you entered into with the Liquidator.”

Okaile and Marsland also want a report that was compiled by Collins at the time when he was the Statutory Manager for CMB to be reviewed and set aside. They argue that the report is characterised by falsehoods, bad faith and unreasonableness. Collins has been replaced by provisional liquidator, John Little.

In an affidavit, Okaile states that besides baseless accusations of criminality against the “Applicants without hearing them, 1st Respondent (Collins) is shown by the fact that he notes in the report P20  million loan was given to Gold Wing Ltd t/a as Cell City.”

He said “The 1st Respondent further states that Cell City understood the loan to be between itself and Botswana Opportunities Partnership (BOP) and it could not have come from Capital Management.”

BOP was a partnership between the Botswana Public Officers Pension Fund (BPOPF) and CMB established in 2014 which was mandated to invest in private equity. The agreement has since been terminated.

Some creditors who are demanding compensation include the BPOPF and Bona Life. The two entities are collectively seeking the return of more than P550 million.

Okaile said Collins should further “note that Cell City has undertaken to pay the loan and has paid interest of the loan at the rate of 5 percent and the sum of P346 393.42 (Three hundred and forty six thousand three hundred and ninety three Pula forty thebe) has been paid.”

He said though Cell City was prepared to pay the sum of P20 million which albeit came from a separate legal entity being Capital Management Botswana Fund 1(CMB Fund 1) (Pty Ltd, Collins “does not mention this as an asset that would resolve liquidity concerns of Capital Management Botswana (Pty) Ltd if any.” 

CMB Fund 1 is a subsidiary of CMB.

Okaile claims Collins “merely mentions the existence of the loan and the debtor’s preparedness to pay it and does not mention it as an asset that could restore the company (CMB) to solvency as at the 7th June 2018.”

Okaile said what is worrying and clear evidence of bias, bad faith irrationality and improper motive for recommending liquidation of Capital Management Botswana is that after it is placed under liquidation, Collins advised and prepared an agreement with the debtor (Cell City) for the payment of P20 million at P500 000. 00 per month.

“This information was given by Mr. Nabeel Kader who informed me that Cell City have entered into an agreement to pay P500,000.00 to the 3rd Respondent (Liquidator-CMB for the P20 million,” said Okaile.

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