Saturday, October 31, 2020

High Court confirms BCL liquidation mess

The Botswana government intends to have identified a new owner of the defunct BCL mines by December this year but such efforts might be derailed by what appears to be a ‘big fight’ between the liquidator and senior management team at the copper mine.

While the appointed liquidator – Trevor Glaum is reportedly working from Capetown, South Africa instead of Selebi Phikwe, a manager at the mine has been suspended and awaits disciplinary hearing.

The Master of the High Court – Michael Motlhabi who appointed Glaum in mid-2019 as the liquidator has confirmed the suspension of the unnamed manager. Motlhabi said the suspension will allow a further enquiry on what he calls a ‘labour matter’.

“At this stage I am unable to comment any further on this as there are currently on-going labour-based investigations being conducted,” said Motlhabi.

On the arrangement of the liquidator working remotely, Motlhabi said that on the day to day communications take place via telephonic and electronic or video conferencing facilities between the on-site team and the liquidator and his advisors.

Motlhabi also confirmed that indicative offers have been received from several interested bidders and that they are currently being assessed by an independent technical advisory consultancy appointed for that specific purpose.

In early September Lefoko Moagi – minister responsible for minerals told Parliament that the government has identified three possible investors who are interested in bringing the BCL mines back to life. The process of choosing new owners, Moagi said, is expected to be completed by December 2020.

Faced with the dwindling commodity prices, and rising operating costs, the cash-strapped Botswana government made an abrupt decision to close BCL Group, made of BCL limited and Tati Nickel Mining Company, in a provisional liquidation by order of the High Court of Botswana on 9 October 2016. The government owns 100 percent of shares in BCL, and BCL’s wholly owned subsidiary, BCL Investments Pty Ltd, holds an 85 percent stake in Tati. The remainder of the shares in Tati are directly held by the Botswana government.

The liquidation process was later marred a fallout between former minerals minister Eric Molale and Nigel Dixon-Warren, the court appointed liquidator. Relations were strained in early 2018 when both parties clashed on the duration of the liquidation process, with the government piling pressure on Dixon-Warren to come up with a definite date on the winding up of BCL assets. However, the liquidator said it was a complicated process that could take up to seven years to conclude.

This did not go down well with the government which was facing criticism from other quarters as to why it has been spending huge amounts of money on the liquidation process while also the major creditor. Since 2016, government spent over P1.1 billion towards BCL, with a larger proportion of the funds paying former employees’ benefits, and the rest towards the care and maintenance of the mines.

By late 2018, relations between Molale and Dixon-Warren had deteriorated following a series of disagreements. The most glaring was the decision by the liquidator to axe half of the care and maintenance staff that were retained during the liquidation process. This happened after Molale had told parliament that he had spoken to Dixon-Warren and pressed upon him that he should not retrench any staff.

In December 2018, Molale told parliament that relations between him and the liquidator have irretrievably broken down. Molale disclosed that he had kick-started the process to have BCL removed from liquidation and put under judicial management to give the government more leeway in what to do with BCL rather than deferring to the liquidator, who under the liquidation process, can only be removed by Registrar and Master of High Court in terms of the Companies Act.

Dixon-Warren later resigned as BCL’s liquidator in May 2019. The registrar of the High Court later appointed South Africa based firm Sanek Trust Services – led by Glaum as BCL’s new liquidator.

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