The French writer Honoré de Balzac wise-cracked in the 19th century that “behind every great fortune there is a crime.” While Sefalana Group Managing Director Chandra Chauhan who is listed among Botswana’s five richest men may not be a criminal, part of his fortunes can be traced back to very suspicious decisions by a hodgepodge of public officers who have helped him maintain decades long grip on the government’s multi- million annual supply of Tsabana and Malutu tenders.
Foods Botswana, a Subsidiary of Sefalana Group has dominated the P400+ million tender for decades, winning 80 percent of the contracts in the last 20 years.
Sunday Standard investigations, based on a vast trove of confidential documents, revealed that Foods Botswana, has profited from highly suspect decisions by what appears to be an ecosystem of shady officials at Ministries of Agriculture, Local Government, and Health & Wellness who are subverting competition.
Sometimes their excesses involve breaking the law, and sometimes they are within the bounds of the law. And sometimes the legality of their actions isn’t clear, but the common thread is that their decisions unfairly stack the deck against Foods Botswana competitors.
Their crimes involve among other things, cooking up fake reports to unsettle competition, helping the Sefalana subsidiary horde sorghum supplies to starve competitors of Tsabana and Malutu inputs, selling sorghum to Foods Botswana at a loss while competitors pay an arm and a leg and generally orchestrating a series of manoeuvres to throw a shade over Foods Botswana competitors.
Although he benefited from the questionable decisions, Sunday Standard, could not find any evidence that Chauhan personally influenced or was in on the questionable manoeuvres by the public officers.
Indications are that recent audit findings by the Botswana Agricultural Marketing Board (BAMB) are merely a part of a larger and more complex sleaze to give Foods Botswana a leg up.
The report demonstrated how Foods Botswana enjoyed preferential treatment from BAMB management who sold sorghum grains to the company at a loss.
It also indicated how this relationship with top management has allowed Foods Botswana to hoard sorghum in order to meet the demand for the manufacturing of Tsabana and Malutu, while starving smaller millers out of business.
Such has been Foods Botswana’s dominance of the Tsabana and Malutu captive market that the Sefalana Group Managing Director has developed a sense of entitlement to the contract. Chauhan does not think twice about throwing a shade over his competitors. While this seems rough and ready at first glance, there’s a good deal of business rationale behind the combative strategy – it helps him maintain the stranglehold over the lucrative supply of Tsabana and Malutu tenders.
Sunday Standard investigations have unearthed a 2015 letter written by Chauhan and addressed to “The Director” at Public Procurement and Asset Disposal Board (PPADB) explicitly expressing his displeasure about another local miller being awarded a slice of the multi-million Pula pie.
In the letter, Chauhan makes reference to the ‘Supply and Manufacture of 9,840 Metric Tonnes Sorghum Soya Weaning Food (TSABANA)’ which contract was awarded to Foods Botswana (55 percent), and Ultimex Holdings (45 percent) at the value almost P100 million each.
The Sefalana Group MD makes several attempts to discredit Ultimex Solutions, pointing to certain procedures in which he claims Foods Botswana fared better than the competition.
“We can assure you that, Foods Botswana is currently the only manufacturer in Botswana that has the necessary skill, the respective plant and equipment as well as the capacity to manufacture this product,” the letter reads.
“…Ultimex has no such facilities and attached are a photo of their premises, which in our opinion are extremely unhygienic and will seriously hamper the production of vitamin enriched sorghum soya meal, which is meant for feeding children under the age of 3 years and for adults as part of government food relief services.”
The letter also goes on to confirm fears raised by the BAMB audit report that Foods Botswana continued to hoard sorghum supplies, consequently eliminating competition:
“In order to assist BAMB to meet its cash flow requirements, we have also paid them for 10,000 tonnes of sorghum in advance of taking delivery from them.” Chandra writes about how in return BAMB would store the sorghum on behalf of Foods Botswana.
“…We paid them almost P30 million in advance and the sorghum grain is currently in storage at their Francistown silos.”
Chairperson of the Sorghum Millers Association Motlhagodi Molomo told Sunday Standard that they were told sorghum grain reserves at BAMB were specifically reserved for Tsabana manufacturers. This is despite evidence suggesting there is only one Tsabana producer benefiting from the reserves.
“It seems the Tsabana contract is highly protected for someone,” Molomo said. She said millers have had to send employees home as a result of failure to secure sorghum, made even more difficult by a legal instrument limiting the import of sorghum grains.
Attempts by Sunday Standard over the past four weeks to establish which companies have been receiving sorghum grains from BAMB drew a blank as management unequivocally refused to disclose the information.
Having confirmed how Foods Botswana hoards sorghum grains from BAMB, Chauhan goes on to emphasise that companies bidding for the Tsabana Tender are required to source their raw material (grains) locally. He calls for Ultimex Holdings to be “disqualified” if they failed to procure materials locally.
Chandra also attacks Ultimex Holdings over what he calls their inability to carry out regular laboratory tests on all batches of Tsabana prepared, saying this poses a risk to the beneficiaries.
Sunday Standard investigations have however turned up an ecosystem within relevant government ministries and departments which has ensured Foods Botswana’s continued dominance of the Tsabana/Malutu tender. A 2016 attempt by the Ministry of Local Government to discredit Ultimex Holdings over the quality of their product backfired, costing the taxpayer over P20 million in an out of court settlement.
Public official’ shady slight of hand to close out Foods Botswana competitors has however harmed Botswana’s underprivileged children casting them off to weeks of sleeping on empty stomachs as clinics ran out of supplies while the Ministry of Local Government hoarded Ultimex Holdings’ Tsabana at their storage facilities, strategically releasing the food just before expiry date to spark a subsequent recall, with the aim of discrediting the miller (Ultimex Holdings).
The most recent recalling of Tsabana products occurred earlier this year on February 3, 2022 with the Ministry of Heath citing “consumer complaint (caregivers) alleged bitter taste and caking texture”.
The public were advised not to consume the batches listed. A week later Foods Botswana released an advertisement on local newspapers distancing themselves from the batches listed and sharing ‘identification markers’ of their own products.
A source working at the Ministry of Local Government under Finance and Procurement Services has shared with this publication contents of a letter addressed to the Ministry by Ultimex Holdings, raising concerns about shortage of Tsabana and Malutu in the South East District Clinics.
The correspondence makes reference to a meeting between the two parties in which the manufacturer complains that all depots had refused delivery of the product claiming they had overstocked.
This is despite clinics running out of Tsabana and Malutu for weeks. “It was particularly shocking to learn of the shortage of stocks in the clinics in this region given the depots were overstocked,” reads a letter from Ultimex Holdings. “We have since made some checks with the Sebele depot to establish if they had run out of stock, only to find that they were still hoarding a warehouse full of our previous deliveries.”
In yet another embarrassing incident aimed at disqualifying Ultimex Holdings, the National Food Control Laboratory’s attempt to fake results and condemn a batch of Tsabana supplied by the company also failed. The dates on the fake report indicated the product was condemned even before manufacturing.
While the batch was shown to have been manufactured on November 3rd 2020, the National Food Control Laboratory had already condemned it by November 2nd (a day earlier) before even receiving the product. Realising their blunder, the Lab reversed the results on November 30, indicating the product had no pathogens as previously alluded.
Further investigations also revealed how a former Quality Assurance Manager (names withheld) at Foods Botswana is now employed under the Ministry of Health & Wellness (MoHW). The employee, Principal Health Officer (Nutrition) II, now oversees the department of National Food Control Laboratory. The same laboratory that conducts tests on Tsabana and Malutu.
Our investigations have also revealed how a recently resigned Head of Operations (name withheld) at BAMB was also a former Employee of Chandra at Sefalana.
The Head of Operations is responsible for (among other responsibilities) procurement of grains including sorghum at BAMB. He resigned together with others in the parastatal’s executive management when asked by the Board to account for their actions following the audit findings.
Those who resigned from BAMB executive management also include heads of: Commercial and Business Development, Finance, and Human Capital.
The audit indicated how Foods Botswana and Ultimex Holdings were once contracted to receive 20 000 Metric Tons (20 million Kilograms) of sorghum but with incredibly disproportionate estimated expected profit margins. While BAMB’s estimated profits from sales with Ultimate Holdings stood at P7 million, those from Foods Botswana stood at an incredibly lower P258, 000; a whopping P6, 6 million disparity in expected revenue for the same quantity of sorghum supply.
Contacted for comment the Sefalana Group MD refused to respond to our enquirers.
