Saturday, October 31, 2020

Intrigue and deceit in CMB saga

The intrigue behind the misappropriation of more than P477 million in public servants’ pensions that was administered by liquidated Capital Management Botswana (CMB) deepened last week with its directors and investors trading accusations.

The plot unraveled at a creditor’s hearing held at Travel Lodge in Gaborone before Masters of the High Court, Chipo Gaobatwe and Nomsa Moatswi.

CMB Director Rapula Okaile was the first to draw blood when he threw Kawena PTY Ltd Managing Director Clementino Dos Santos under the bus, claiming that the money that Botswana Public Officers Pension Fund (BPOPF) had invested in the entity did not belong to pensioners but to Dos Santos.

Replying later, whilst being interrogated by Advocate Stefan Vivian who represents BPOPF, Dos Santos distanced himself from such claims. As the interrogation unfolded, he lost his cool and accused Okaile of having “been smoking some interesting stuff.”

Earlier on when being interrogated by Panayiotis Stais who also represents BPOPF, Okaile also threw his bosom business partner Timothy Marsland to the wolves saying the latter should take responsibility for some of the controversial transactions that occurred at the asset management firm.

The controversy started after CMB won a bid to partner with BPOPF, which resulted in Botswana Opportunities Partnership (BOP), an investment company in which CMB was the general partner while BPOPF was the limited partner and sole investor. 

According to Stais, Okaile wrote a letter to BPOPF that they must pay immediately because “shares on the stock exchange are climbing.” Funds were then deposited into CMB Fund 1, an affiliate of CMB.

“Millions of Pula are paid and they are not paid to BOP. They are held for several months and they are sold to BOP. A profit of P15 million did not go to BOP,” he said.

The inquiry also heard that at one stage funds from BOP were used to buy its own shares.  Stais said shares were migrated from Johannesburg Stock Exchange to Botswana Stock Exchange. The shares valued at P143 million, he said, were sold to BOP.

Asked by Stais to comment on this, Okaile said “our job is to identify skills in the market. Mr. Makgathe (Motswedi Securities founder Martin Makgatlhe) was employed to do a technical job.  We paid him a fee. That was to buy shares from the stock exchange…”

A visibly agitated Stais who was interrogating Okaile from his office in South Africa via a virtual conference told the latter to take responsibility as the director of CMB.

“This does not help us…you are the director of the company and not Makgathe…”

Okaile interjected by stating that “It will help. I didn’t deal with these specific issues because we had employed the service of a broker….”

Stais was not impressed.  

“Let me tell you why I’m concerned. CMB had requested for a drawdown of P150 million to buy shares. CMB had migrated shares using BOP money.  Do you accept that P143 million remained; the remainder was not issued to buy shares.”

Replying Okaile said “When we were still buying shares from the market then came the litigation.”

The inquiry also heard that CMB also purchased shares valued at P20 million.

“It did not pay the dividends to BOP.  Mr. Okaile does not know what happened to the missing money,” said Stais.

The inquiry also heard that there was a drawdown of P100 million for entities called Cell City and African graduate Institute of Leadership and Enterprises (Agile).

“What happened a drawdown of some millions of Pula for Agile,” Stais asked.

Okaile said it was used for setting up an institution called Agile University. He explained that two professors who were assisting with the establishment of the institution were drawing salaries from that; it was P4 million.

“What happened to P46 million?” Stais asked again.

Replying, Okaile said “It is either with the liquidator or BPOPF.”

“The P4 million spent on salaries of the two gentlemen, did you ever pay it to BOP,” Stais sought to know.

“We paid it back to BPOPF,” said Okaile.  

Stais sought to know if Okaile or CMBD sold the interest from investment in Agile to a third party, to which Okaile answered in the affirmative.

Asked who the interest was sold to, Okaile said “That part was done by Tim. I can refer to him.”

“In your affidavit you said the interest was sold for P50 million,” asked Stais to which Okaile replied thus, “The third party is known by Tim, not that I don’t know about the transaction.”

Stais sought to know why the P120 million in respect of an entity called Kawena Holding transaction was not paid or returned to BOP.  

Okaile pointed out that “You are now talking about funds that do not belong to BPOPF but to Dosantos.”

Stais shot back “Can you say what happened to P120 million?”

Okaile stood his grounds as he insisted that “Those funds do not belong to BPOPF, but to Dosantos.”

At this stage, the exchange between the two men boiled over, prompting Moatswi to intervene.

“Mr. Okaile, can you try to answer the questions as they are put to you,” she said.

Stais asked Okaile to explain what happened to P120 million that was paid to Dosantos.

“That could be explained by him,” he said.

Stains insisted and added that “You can’t tell us what happened to these funds?”

Okaile said, “You are talking about P120 million that belongs to Dosantos.  The moment BPOPF draws down for Kawena, its not its money but to Dosantos.” Dosantos later denied this argument in a separate interrogation by Vivian.

The inquiry heard that there was a drawdown of P150 from BPOPF funds in the account of CMB Fund 1 to be invested in Manor Squad.  Stais sought to know who gave Okaile the authority to give Dosantos funds to invest it in manor squad.  

Okaile said “That was a discussion between Tim and Dosantos.” 

When interrogated by Vivian, Dos Santos said he and other shareholders owned an entity called Sherewa and other shareholders were keen to sell their shares. The result was that a knew entity called Kawena Holdings was set up. He became its director and held 40 percent while the remainder went to BOP.  He said a payment of R32 million from Kawena to Sherewa was used to purchase shares of other shareholders with Dosantos in that entity. 

The company did not have a bank account. It purchased all the shares by Dos Santos, his partners and took all the shares to Kawena Holdings.  Vivian wondered how Dos Santos became a director without having invested cash. He also wanted to know if Dosantos injected any cash, to which the other man answered in the negative.

“They (CMB directors) paid 34 million Rands and not P150 million,” Dosantos said.

Vivian told Dos Santos that “Mr. Okaile said it was your money, the P150 million,” to which Dosantos said “It was not my money, that remained BOP money.”

Vivian said Sherewa assets were worth more than R32 million but less than P150 million, to which Dosantos agreed. Asked if was aware of manor squad transactions as alluded to by Rapula, Dosantos said that he was not aware of such an entity.

“Let him show me a document. Its an absolute lie. He (Okaile) must have been smoking some interesting stuff,” said Dos Santos. 

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