Sunday, September 20, 2020

Gov’t on a witch-hunt against Nchindo – De Beers secret report

A confidential report, presented to the De Beers command by De Beers Botswana CEO, Sheila Khama, suggests that the Slaughter & May investigation may have been a witch-hunt against former Debswana Managing Director, Louis Nchindo.

The report says the investigation was discriminatory and was conducted in bad faith.

The Slaughter & May investigations form the basis of criminal charges which were filed by the Directorate of Public Prosecutions against Nchindo, his son and other former Debswana executives.

De Beers is unhappy with the way the investigation was conducted and feels that the government approach suggested “lack of trust between the shareholders of Debswana and by so doing positioned De Beers as the potential partner to the MD [Nchindo’s] alleged misconduct and the GRB [Government of the Republic of Botswana] as the victim. “

In a paper presented in 2008, Khama, who was one of the people interviewed by Control Risk Group commissioned by Slaughter & May, states that, “the tone and content of the interviews themselves clearly show that the object of the exercise was to audit the former MD’s conduct and much less the operations of the company in any commercial material fashion”.

The paper states that, “instead of focusing on the longer-term issues of good governance, it appears that the exercise gave way to a short ÔÇô term process of proving criminal culpability”.

Khama further notes that from a De Beers/Botswana government relationship perspective, it appears that the Botswana government “carried out this process in bad faith (at worst) or (at least) lacked the courage of its convictions”.

The paper further states that perhaps because the consultants who carried out the investigations were prejudiced by the government’s brief, views and belief by the government of Botswana that De Beers or its Chairman, Nicky Oppenheimer, were party to, or privy to Nchindo’s conduct, “ the tone of the report appears to fault De Beers without concrete evidence. In the same vein the report is fairly lenient towards the representatives of the GRB on the board of Debswana.”

The paper cites a number of examples:
“The report describes the MD (Nchindo) as having usurped power but one could easily have described this as the board abdicating responsibility.

“The report states that the GRB representatives are disadvantaged (on the board) of Debswana because they do not work in the industry full time. I think a better way to put it could be that the source of this position of weakness is the GRB’s policy to select nominees mainly from the civil service.”

Khama argues that “by expressing (prematurely) the GRB’s expectations of what prevailed at Debswana and by also inadvertently revealing what outcome the GRB expected the client effectively undermined the potential value of what was clearly a necessary exercise by not creating an environment in which the consultants could form an independent view.

The paper points out that by excluding Botswana government representatives in the Debswana board from the review exercise, it is clear that the government of Botswana “unintentionally suggested lack of trust between the shareholders of Debswana and, by so doing, positioned De Beers as the potential partner to the MDs alleged misconduct and the GRB as the victim. The result being that, instead of the process helping to bridge genuine areas of divergence, the process has served to validate the perception of an unhealthy relationship. In view of the court case and the media attention, care must be taken to address these matters and to do so with a view to ensuring that the former MD (Nchindo) is not the beneficiary of lack of coordination.”

Khama’s apprehensions are perhaps the most glaring example of a disconnect that is said to exist between the De Beers representatives and those of Botswana Government on the Debswana Board of Directors.

De Beers is represented by professionals that work fulltime for the diamond industry while the Government of Botswana is represented by such people like the Permanent Secretary to the President and the Governor of the Central Bank.

As part of his farewell speech when he retired from Debswana, Nchindo underscored this point.

Ever a brash strategist, the man could not hide his disdain for some of Debswana directors, saying some of them were people who had failed at their day jobs.

This did not go down well with some of them.

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Sunday Standard September 20 – 26

Digital copy of Sunday Standard issue of September 20 - 26, 2020.