Former Debswana Managing Director, Louis Nchindo, masterminded a number of bail out schemes designed to help former president Ketumile Masire whose company was heavily in debts and ultimately buy him out of the presidency ÔÇô De beers revealed this week.
De Beers gave Masire financial assistance under questionable circumstances while he was in office and are believed to have paid him to step down as president of Botswana.
Sunday Standard can reveal that De Beers helped set up a ghost company called Clairemont Corporation, which they used to transfer close to P 4 000 000 to former president Ketumile Masire’s company, GM Five, under the pretext that they were buying into the company. It is understood that De Beers was using the money to buy Masire out of the presidency.
The deal came after De Beers had funded a consultancy by University of Natal and Markdata director, Professor Lawrence Schlemme, to help the Botswana Democratic Party (BDP) win the 1999 elections. The consultancy recommended transfer of power from Masire. It is understood that Masire was, however, reluctant to step down because he was heavily in debts. De Beers then helped register a company in Panama under the name Clairemont Corporation. A fictitious sale of shares between GM Five and Clairemont Corporation was staged to help transfer P 3 700 000 which would be used to settle GM Five debts.
Proceeds from the fictitious sale were used to settle GM Five’s loans with Standard Chartered Bank, National Development Bank, Botswana Agricultural Marketing Board and other sundry liabilities. De Beers maintain that the whole scheme was put together by Nchindo and they did not benefit anything out of it.
Sunday Standard can further reveal that De Beers provided financial aid to Masire from as early as his first term in office right up to his last term.
De Beers, through one of its directors, Peter Layden, former Debswana Managing Director Louis Nchindo and a South African Lawyer, Len Fisher, who had handled the De Beers patent dispute with GE years before helped put together a financial bail out plan for Masire who was facing financial difficulties on the eve of the 1984 elections.
As part of the rescue plan, De Beers procured an expatriate farm manager for GM Five (a company in which former president is both owner and chairman). De Beers also helped secure a P 186 228 bank loan for GM Five from Barclays Bank. In his second term in office, GM Five owed De Beers close to P 1 million.
Sometime around September 1987, GM Five asked De Beers to reduce the total amount owing of P805 910 by the costs associated with the farm manager of P164 466 and the amount paid directly to Barclays of P186 228 leaving a net amount owing of P455 216. GM Five proposed to round the figure up to a round P500 000.
As part of the deal, De Beers would place a moratorium on the repayment of the loan (P500 000) for a period of five years. There after the loan would be repaid over five years in equal annual installments. At the time, the loan was to be paid, that was when the consultancy which was funded by De Beers recommended that Masire should step down.
Masire, however, could not step down allegedly because GM Five was heavily in debt. De Beers stepped in and put in more money into GM Five through Clairemont Corporation.
De Beers this week confirmed bailing out Sir Ketumile. In a written response, De Beers spokesperson, Chipo Morapedi, stated that “while it is difficult to comment on the specific sequence of events that occurred more than 25 years ago, it is true that, given the company’s investments and experience in managing farms at the time, we were able to provide management assistance and a loan facility to former President Sir Ketumile Masire.”
The statement from De Beers further said, “The purpose of the loan was to help the then head of state by relieving him of the burden of debt and providing him with resources for the farm to be independently managed and so enabled him to attend to the duties of his office and matters of national interest.┬á Louis Nchindo put the idea to Sir Ketumile and also recommended the assistance to the company. This was done in his capacity as an employee of the company at the time. In the present day and age, the De Beers family of companies operates in a completely different environment with clear policy guidelines governing donations and for disclosure.”
In response to queries on how De Beers used Clairemont Corporation as a conduit for bail out money meant for GM Five, Morapedi stated that, “equally, it is true that De Beers was once again approached by Louis Nchindo to grant financial assistance to the former Head of State shortly after his retirement.
Not only did this specific transaction take place after Sir Ketumile left office it was not at all linked to any negotiations between the company and the Government of Botswana for current or past commercial arrangements. As such, De Beers did not benefit from the transaction in any way.”
Former president Ketumile Masire and his wife Gladys Masire convened a GM Five board meeting on 31 July 1998 where they agreed on an allotment of 3 7000 000, 7,5% redeemable cumulative preference shares of P1.000 each to Clairemont Corporation. This was three months after Masire stepped down as president. Both Nchindo and Masire could not be reached for comments. ┬á
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