Tuesday, October 19, 2021

Debswana bosses used public trust to launder CSR black money

A Debswana manager has resigned while another one has been suspended for diverting millions from the company Corporate Social Responsibility (CSR) budget to line their pockets. Sunday Standard investigations have turned up information that the duo fabricated CSR spending and used a local Village Development Committee (VDC) to launder the black money. Between P3 and 4 million was reportedly siphoned from the Debswana CSR budget, routed through a VDC in the Central District and later transferred to a private company account. The company is jointly owned by the former Debswana employee and an unidentified VDC member. 

Debswana’s Corporate Affairs Manager Matshidiso Kamona has confirmed the allegations. “Debswana’s internal processes detected suspected fraudulent activities in a small number of transactions related to the Company’s Corporate Social Investment (CSI) programme,” she said. According to Kamona, Debswana then notified the Botswana Police and also undertook a full internal review. “Whereas two people are so far implicated, one is an employee and has now been suspended from duty, while the other left the Company earlier this year,” she said.     She added that “As a responsible corporate citizen, Debswana is committed to upholding integrity in the conduct of its business including reporting any suspicious activities to the police.” Kamona said Debswana’s internal review identified further controls to strengthen our governance approach, all of which have now been implemented to ensure this does not happen again. “Our shareholders have entrusted us with the responsibility to mine diamonds in a safe and sustainable manner in order to produce commercial returns that will be beneficial to all. This calls on all employees, business partners and external stakeholders to abide by the highest standards of governance and ethical behaviour,” she said.

Kamona further stated that Given that the matter is still under investigation, we are not in a position to comment further until investigations have been completed and the next course of action has been determined.   “Debswana remains committed to continue investing in Botswana’s future through the CSI programme to ensure that communities benefit from the legacy of diamonds,” she said. Botswana Police Service Public Relations Officer Assistant Commissioner Witness Bosija confirmed that they were investigating the case.

According to Bosija one of the suspects who is a former employee of Debswana is likely to be arrested and appear before court after investigations have been completed.   Debswana Mining Company- a joint venture between the government of Botswana and mining giant De Beers- keep its financial statements secret which observers have described as an unacceptable gesture that works against the ideals of corporate governance and transparency. Despite its being a major player in the economy of Botswana, Debswana does not publicise some key financial information, a scenario which Jefferies has described as unacceptable.

A new report by the Natural Resource Governance Institute (NRGI) recently raised a red flag over Debswana’s secretive financials. The report states that while Debswana appears to have good corporate governance structures in general, the rules describing how the company operates are less clear than those of most other State Owned Enterprises (OEs) evaluated in the RGI. Debswana is the largest contributor to Botswana’s Gross Domestic Product (GDP) and has to date chosen not to make its financial data, including income. The company is however generally viewed as public as it is partly owned by the Botswana government and Anglo American through DeBeers which is a publicly listed company. Currently Debswana shares most of its operational data through a shareholders annual report. Other key financial figures are usually accessible through the parent company, Anglo American which is listed at the Stock Exchange. 

 

RELATED STORIES

Read this week's paper