The Minister of Finance and Development Planning, Kenneth Matambo, helped Shanghai Fengyue Glass Company to get away with fraud by misleading and hiding vital information from the Botswana Development Corporation (BDC) board, a report by the Parliamentary Special Select Committee of Inquiry has revealed.
Evidence led during the inquiry revealed that Matambo, then BDC Managing Director, was part of the BDC trio of Maria Nthebolan, Sametsi Ditshupo and James Kamyuka ÔÇô who have been cited for disciplinary action ÔÇô when they decided to partner with the Shanghai Fengyue Glass Company, despite compelling evidence that the Chinese company was a fraud.
States the report: “Documentary submissions by the prospective Joint Venture Partner, Shanghai Fengyue Glass Co. presented a company with a high net worth amongst other things. It is the evidence of Ms Wilhelminah Baipidi-Maje that soon thereafter, a United Kingdom Information Bureau delivered to them a due diligence report painting an entirely different picture about Shanghai Fengyue Glass Co., notably a company of low net worth. It is this information, which she presented to the then Management Committee, composed of Mr Kenneth Matambo, Ms Maria Nthebolan and Mr James Kamyuka….. Notwithstanding this information brought to the fore by Baipidi-Maje, the BDC management, led by Matambo, went ahead with the resolution to invest with the Chinese company.
The report states, “Confronted with these stark due diligence revelations of a bloated Shanghai Fengyue Glass Co. profile, the management of the BDC does the incredible and pursues the investment with the Chinese Company.” Curiously, Matambo and his charges kept the information away from the board.
This is in spite of the fact that Matambo and his board had earlier assured the board that the Chinese Company’s credit worthiness would be the subject of further vetting, saying “Mr Boyd (Invoice Discounting Manager) was assisting the Division to get information through UK companies”.
The committee further raises questions why Matambo and his management went on “spending more money on a business mission allegedly to verify and prove to itself what ordinarily should be demonstrated by the prospective investor that, it has or it does not have the requisite investment wherewithal”.
The expensive trade missions only revealed further evidence that Shanghai Fengyue Glass Company was bad for business.
States the report: “It has emerged in the evidence of Baipidi-Maje that their trade mission failed to establish a single manufacturing outfit owned, operated and conducted by Shanghai Fengyue Glass Company.” This is despite the fact that “one of the much touted credentials of the Chinese Company is its commercial track record and ownership of several glass manufacturing factories in China and an alleged commercial track record of having established some ten or so glass manufacturing factories in Africa”.
The report states: “As these revelations unfold, and the technical capacity of Shanghai Glass Co. very much in doubt, notwithstanding demonstrable misrepresentations and falsehoods contained in its project proposal to the BDC, the management yet embarks upon an incredible course of business conduct and decides to twin with the Chinese Company, merely as a financial investor.”
The report stops short of indicting Matambo and his management for being complicit to the Chinese company’s fraud. “These disturbing revelations about the Chinese company are not brought to the attention of the BDC board, and it would appear, given the gravity of these matters, this course of conduct to keep the board largely in the dark, is by and large by design.”