“Once the money was in the Recon account, it was used to purchase properties,” reads one part of the judgement by Justice Omphemetse Motumise that relies on the testimony of a financial investigator from the Directorate on Corruption and Economic Crime.
The money in question was controversially withdrawn from the National Petroleum Fund at the instance of the former Director of the Department of Energy, Kenneth Kerekang, and deposited into the bank account of Recon Security Training. Trading as Basis Points Botswana, Recon was owned by Bakang Seretse, an investment manager and businessman. Officially, the money was meant to buy oil stocks for Botswana Oil, a state-owned enterprise which manages the government’ strategic fuel reserves. In his 98-page judgement, Motumise says that the money was instead used to buy “high-end luxury items” for Seretse and his associates.
In his capacity as Director, Kerekang instructed Bank Gaborone to open an account in the name of the NPF “for transaction purposes for oil stock.” The money was transferred in three tranches (P6.2 million, P10 million and P43.7 million) between July and December 2016. The first was “fees for various advisory services”, the second for “advance for the procurement of oil stock” and with the third (which occurred six months later) was instruction to close the account “due to the dormant nature of the account and the need to consolidate accounts with our transaction advisor/investment manager.”
It was then that what Motumise describes as “a spending spree” began in earnest. The following items were bought: a P1.7 million Maserati Ghibli S; an P881 000 Mercedes Benz B250; imported furniture worth P2 million; P3.6 lease area; P5.3 million to rebuild a house in Extension 11, Gaborone; P1.7 million for a residential plot in Thema 1, Lobatse; P6 million for a plot in Gaborone West; P1.2 million Toyota Lexus LX450 Diesel V8; P293 000 Toyota Rav4 2.2 GX; P178 000 Ford Ranger 2.2 TDCI; P793 000 Volvo XC90 T6; P529 000 Land Cruiser 4.5 V8 Turbo Diesel; P455 000 as top-up for a Mercedes Benz worth P650 000; P285 000 Toyota Hilux SC 2.4 GD6; P167 000 Mercedes Benz with fitted extras; P70 000 Ford Figo; R134 000 Rolex Just 41 wrist watch; P142 000 Rolex CTY/SS GMT Master wrist watch; assorted gym equipment worth P311 000; P1.1 million farm and gardening equipment; P26 000 lawn-mower equipment; P145 000 VW Polo; P280 000 Toyota Hilux; P3 million Rolls Royce Phantom; P155 000 Subaru station wagon; two 630 2WD farm tractors and two DICLA trailers; and a 380V KVA Ultra Silent generator. The value for the last two items has not been disclosed.
“From the sheer size of the funds, it is manifest that by any account, their recipients came into fabulous fortune and wealth for no value to the public purse in return. The pattern and character of the expenditure tells the story of the acquisition of manner of assets, many of them high-end luxury items for Basis Points, Mr. Seretse and companies and individuals associated with him or Basis Points, at a frenetic pace. It was a spending spree! The evident intention was to exhaust and dissipate the funds. Before long, the account was left desolate, with no investment to show for the NPF or a single drop of oil in sight. The public purse was thereby impoverished.”
Of the individuals mentioned in the judgement, the one to whom a substantial amount of acreage is devoted, is Kerekang’s wife. This is with regard to the Gaborone West plot which she and her husband bought from Riaz Khonat of Algo Industries. Some three months after the Recon account was closed, Seretse telephoned Khonat’s father to make arrangements for viewing the plot in question. Thereafter. Seretse showed up with Kerekang and after viewing the plot, he (Seretse) proposed to buy it for P5.4 million, excluding VAT. A deal was sealed and through Rahim Attorneys (representing Algo Industries) payment of P6 million (VAT inclusive) was made. After this transaction Kerekang’s wife came around to not only view the property but finalise the deal by collecting the keys and building plans.
In his judgement, Motumise questions why the Kerekangs received “a benefit of this magnitude or any benefit at all from Mr. Seretse or his company, purchased with funds which Mr. Kerekang had authorised to transferred to Basis Points, another one of Mr. Seretse’s companies.” The judge provides the answer himself: “The answer is plain. That transaction was, in common parlance, a kickback, or in terms of the Corruption and Economic Crime Act, valuable consideration, received by Mr. Kerekang, as a reward for transferring the funds to Basis Points.” He expands such conviction a paragraphs later by stating that “the duo had acted fraudulently or deceptively by obtaining money from the NPF, under the guise that it was for investment when they knew that their intention was to convert it for their own use, or that of the companies in which they were interested.”
The state’s case was that Kerekang was not authorised to open a bank account and deposit NPF funds into it; that he and Seretse committed serious crime-related crimes of corruption, cheating the public and money-laundering; and that a document originating from the Directorate of the Intelligence and Security Services was fraudulent. The state sought and obtained an order for the forfeiture of properties that it maintains were “proceeds of crime.” Since November 2018, the properties in question had been placed under state custody.
Conversely, the defendants’ case was that the property in question was bought with “innocently derived income” for consultancy work that Basis Points did for DISS. Motumise rejected this explanation, maintaining his position that the whole scheme was shot through with fraud from start to finish.
The defendants are appealing the judgement.
