Thursday, October 28, 2021

CMB financial scandal branches off into a new controversy

The embattled Capital Management Botswana (CMB) is facing fresh accusations that it withheld information from an inspection team from the Non-Financial Bank Institutions Regulatory Authority (NBFIRA).

NBFIRA is also threatening to take action against the Chief Executive Officer of (CMB) Rapula Okaile for allegedly obtaining a report compiled by CMB’s statutory manager, Peter Collins illegally.

Collins was appointed the statutory manager after NBFRIA received complaints from CMB’s clients among them Botswana Public Officers Pension Fund and Bona Life.

In her affidavit before the court, the Director of Capital Markets of NBFIRA, Juliana White states that Collins’ report was not provided to Okaile and that she had not shared either the document or the contents of the document with Okaile or for that matter with CMB. 

“The document appears to have been obtained from the Applicant in an unlawful manner (and certainly not with the Applicant’s consent) and I’m in the process of investigating precisely how Mr Okaile may have obtained the document. The Applicant’s rights remain reserved, in full,” she said.

She said the document was evidently attached and referred to by CMB in order to demonstrate that an inspection had been completed by NBFIRA which the regulator for some reason (and improperly) not disclosed to the Court.

According to White, she was in charge of the NBFIRA team that led the inspection and it was not completed and proved to be a futile exercise because information pertaining to companies other than Capital Management Botswana (Propriety) Limited (CMB) was withheld from the inspection team.

She said relevant information only came to the attention of NBIFIRA from various other sources such as a report from Bona Life.

“In any event, the Regulator is permitted to rely on all available information (and not only an inspection report, as suggested by Okaile) in order to decide on the appointment of a statutory manager,” said White.

Notwithstanding, White said, CMB’s attempts at withholding information, the inspection team was able to obtain a collate information that pointed to and illustrated the non-compliance on the part of the CMB. 

She said the appointment of the statutory manager was prompted by a consideration of all the relevant information and not certainly limited by what was contained in the report on the inspection as the CMB appears to contend.

“I addressed the report to Collins in his capacity as the statutory manager in order to share with him the results of the inspection (for whatever it was worth). It was (and  it remains) the applicant’s (NBFIRA) position that this information could be of potential information and that it might have been of some assistance to the statutory manager and as such, that it was proper and indeed, the report on the inspection was only finalised on 12th February 2018 after the current application has been launched,” she said.

By the current application, White was referring to an urgent application by NBFIRA to the High Court to have Collins confirmed as statutory manager for CMB.  

“This was in no way intended to be a substitute for information that had come to the attention of NBFIRA which resulted in CMB being placed under statutory management. It is in that context that the so called report (report compiled by Collins) should be understood,” she said.

She said there “is in the circumstances also nothing sinister regarding the existence of the report and the same token, nothing improper pr untoward regarding the fact that the report gad been provided to the statutory manager. The report in any event, does not (and) detract from the obvious need to appoint a statutory manager.”

She concluded thus “For the sake of completeness I states that First Respondent (CMB) has obtained a copy of the report without the applicant’s period permission, the rights of the applicant (NBFIRA) remain reserved in full.”

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