A De Beers document, marked “Strictly confidential”, details how Louis Nchindo and De Beers masterminded the retirement of former President Ketumile Masire, his succession by former president Festus Mogae and the retirement of current president Lt Gen Ian Khama from the Botswana Defence Force to take up the Vice Presidency of Botswana.
The confidential document, which was put together on December 28, 2007, when the Directorate of Public Prosecutions (DPP) laid charges against Louis Nchindo, sets out a plan on how to protect De Beers from the fall out of the legal battle.
The author of the document, a De Beers insider whose name has been passed to The Sunday Standard, takes issue with the fact that Louis Nchindo “was a member of the BDP Executive Committee and is generally credited with being the kingmaker. The author can, on instance, verify the subject’s role in respect of one incident. In 1996 the author was requested by the accused (Nchindo) to proofread a document detailing a strategy to stabilize the party by doing away with factions that threatened to divide it.
In essence the strategy took the form of a recommendation to the party (de facto Cabinet) to facilitate the departure of former head of state (Sir Ketumile Masire) by introducing an attractive retirement package. The strategy further acknowledged that in his stead the current leader (Festus Mogae) would be installed as is provided in the Constitution and that for succession planning the then head of the army (Lt Gen Ian Khama) be requested to take early retirement and then brought into the Cabinet as the Vice President.”
The De Beers confidential document further states that: “As it happens, all this has come to pass proving his intimate involvement in BDP politics.”
De Beers, which had been helping President Ketumile Masire, provided the money to buy him out of the presidency. At the time, Masire’s debts to Standard Chartered Bank, National Development Bank, BAMB and other sundry liabilities had ballooned to millions. It is understood that he would not leave the State House knowing that his creditors would be waiting for him.
De Beers then put together a bail out plan that would ensure that the president retired in peace. By July 1998, four months after he had retired in office, De Beers and Masire were putting finishing touches to the paper work that would have close to P 4 million transferred from a De Beers company in Panama to GM Five.
By 31 July 1998 at a GM Five meeting attended by Sir Ketumile and his wife Gladys Masire, it was resolved that the De Beers off shore company, Clairemont Corporation, would acquire 3 700 000, 7,5 redeemable cumulative preference shares of P1.00.
According to the minutes of the meeting, “It was resolved that the proceeds from this issue would be used to discharge the company’s indebtedness to Standard Chartered Bank, National Development Bank, BAMB and other sundry liabilities and may not be used for any other purpose except as provided above.”
By August 12, 1998, GM Five company secretaries, Price Waterhouse Coopers notified Bank of Botswana of the P 3, 7 million which would accrue to GM Five as a result of sale of its shares to Clairemont Corporation of P.O Box 272, 9490 Vaduz, Liechtenstein.
By August 24, the Bank of Botswana Principal Bank Examiner, H. L Gibbs, wrote to Price Waterhouse Coopers granting permission for the allotment of GM Five 3 700 000 redeemable cumulative preference shares to the De Beers offshore company.
In a deal that smacks of money laundering, all legal requirements for the sale of shares between GM Five and Clairemont Corporation were met, the underlying transaction, however, was not a sale of shares but a transfer of bail out money from De Beers to GM Five.
In their confidential document, De Beers was worried about the bail-out plan. In a column written “implications” De Beers states that Nchindo “was acting in his own right as a citizen freely and openly affiliating with a political party of his choice. However, in view of his attorney’s tactics to muddy the waters, he may attempt to link the De Beers funding with the BDP leadership transition and suggest that his actions were purposely meant to serve the company interests to give advantage to current Botswana leadership over contenders.
De Beers was worried that, “not only will this influence the local media reports but it could make allegations of conflict of interest and the board failure to manage this more credible (read second lead). The result is a potential reputation damage to the shareholders of Debswana, the party and the integrity of the relationship between the company and the government of Botswana. That said there is little risk to the relationship between De Beers and the Government of Botswana being damaged.
“If the attorneys carry out the tactics, it is also likely that they may lean largely on De Beers because that is where he has the least to loose. One of the unintended consequences of his attorneys implementing the proposed line of defence could be to expose the Government of Botswana and in so doing risk alienating the future leader (Ian Khama) and the party colleagues whose confidence he still enjoys. It is for this reason that members of the party caucus have been lobbying the leadership to refrain from carrying out full investigations and so avoid they too being implicated.”
De Beers felt that this was an opportunity to “show common front through a joint response by the partners (De Beers, Botswana Government) to be lead by the Permanent Secretary in the Ministry of Minerals Water and Energy Resources and the Managing Director of De Beers, in their capacity as Chairman and deputy Chairman of Debswana presents itself.
“It may also be useful for the powers that be on either side of the partnership to have a one-on-one and share a perspective on the matters only the two have been privy to.”