In an unusual and extreme capital markets case, one of the local companies, Capital Management Botswana (CMB) is at the centre of investigations after it allegedly attempted to defraud atleast P70 million from the Botswana Insurance Fund Management (BIFM).
The Botswana Insurance Fund Management is listed at the Botswana Stock Exchange and it’s a subsidiary of the Botswana Insurance Holdings Limited (BIHL) group which also trades its shares at the local bourse.
On the other hand, Capital Management Botswana (CBM) is a subsidiary of Capital Management Africa which a few years back held close to 50 percent shareholding in BIFM Capital.
Details emerged late Friday this week that following the failed fraudulent financial transaction attempt by CBM to cash-up atleast P70 million from the defraud BIFM, the latter reported the case with the country Serious Crime Squad (SCS). The SCS is currently led by Senior Superintendent Officer Commanding Phenyoetsile Nnanaakoko who confirmed the matter to the Sunday Standard.
This week when BIFM got notification of Of about P70 million by CMB, BIFM then followed processes and procedures in place and immediately reported the matter to the country Serious Crime Squad (SCS) led.
“This is a fairly newly reported case and we are kick-starting intensive investigations. It was reported this week and we will follow processes and procedures,” said Nnanaakoko.
BIFM Chief Executive Officer (CEO) Neo Bogatsu confirmed on Friday the alleged attempted fraud of financial transaction matter and she further stated that the matter has been reported to Botswana Police’s SCS Fraud Division. Bogatsu remained cagey on revealing the company’s name that allegedly attempted to defraud BIFMP70 million by mid January 2018 from BIFM’s corporate account at RMB, a subsidiary of FNBB.
“The BIHL Group can confirm that we are investigating a matter that involves one of our investments. Given the nature of the incident, we have notified the relevant authorities to investigate accordingly, as this is in line with our own governance policy. As this matter is with the authorities, we are unable to comment on it in the public domain,” said Bogatsu.
She further said that internally their Group in South Africa, Sanlam Group is also informed about this incident which is currently before the police.
“We are relaying on the authorities for investigations which are ongoing and let the law take its course,” she said.
Historical records show that Capital Management Africa (CMA) and BIFM owned BIFM Capital with BIFM holding 51 percent. The two entities separated in 2012 when BIFM bought CMA.
Bifm is also leading in asset management and manages in access of P23.9 billion in assets across equity, fixed income, real estate, liquidity and alternative investments. The company has also invested in non-traditional assets like in the healthcare industry, tourism sector through KYS Investments, and property development activities.
Attempts to contact FNBB and RMB when BIFM held the account, through the media inquiry failed on Friday as the bank did not respond to the inquiry.
Meanwhile, the same company CMB for the past few days this week has been placed under statutory management after NBFIRA acting in terms of Section 46 (4) (a) of the Securities Act No. 26 of 2014 appointed Peter Collins as Statutory Manager of CMB.
In the same week, CMB then approached a different Court to contest statutory management by NBFIRA without serving or notifying NBFIRA with official court documents. It emerged that on Thursday CMB’s statutory management was then withdrawn by the court.
Industry players observed that CMB could face possibility of liquidation notification as a result of one financial business transaction and will automatically impact on financial soundness of the company.