Monday, December 6, 2021

Kgafela stalls the process to interview Reserve Bidder for lotto license

The Minister of Trade Mmusi Kgafela has written to the Gambling Authority (GA) Board of Directors ordering them to halt negotiations with Reserve Bidder Ithuba Solutions over the awarding of the National Lotto License, Sunday Standard has learnt.

This follows the decision by the GA to terminate negotiations and revoke the status of Grow Mine Africa as the Preferred Bidder. The company has however appealed the decision to the Minister claiming unfair treatment by the regulator.

Kgafela is reported to have met the Board this week where he informed them of the appeal, saying the GA should halt the process to engage in negotiations with Ithuba Solutions pending the appeal.

“The Board of the Authority wishes to inform the nation that the Negotiations with Grow Mine were unsuccessful and consequently the status of Grow Mine as the Preferred Applicant has been revoked,” GA said in a statement recently.

The Authority said the decision followed Grow Mine’s failure to satisfy a key, non-negotiable requirement as per the Request for Applications for the license to operate the National Lottery as well as a key undertaking made in the company’s application and in presentations to the Evaluation Committee.  

“As a consequence of this revocation, the Board has resolved to invite the Reserve Applicant to negotiate the License to operate the Botswana National Lottery.” Hardly had the ink dried on the announcement when Grow Mine approached the Minister to air their grievances about the matter. Kgafela then approached the Board to inform them of the appeal. It is understood that central to the decision to drop Grow Mine is failure by the company to raise a funding guarantee of at least P100 million which was one of the requirements.

While Grow Mine reportedly claim they had been given a short notice within which to raise the funds, those close to the negotiations say that is preposterous as the company had known from the onset that such was a requirement for the .awarding of the license.

“I think they had hoped to be awarded the Licence first and use it to attract sponsorship to raise the funds,” and observer told Sunday Standard.

The company has had its fair share of internal disputes between Board of Directors with some directors quitting, major shareholders accused of abusing minority shareholders, and company attorneys replaced.

The internal conflicts resulted in court battles with one of the former directors Percy Raditladi being hauled before the Francistown High Court in late 2020. Raditladi had earlier written to among others Botswana Stock Exchange, Gambling Authority and other shareholders complaining about what he said was violation of corporate governance standards.

Efforts to get a comment from GA Chief Executive Officer Thuli Johnson proved futile as he said he would not discuss the matter while they were still in discussions with the concerned parties.

Sunday Standard has been reliably informed that GA had already written a letter to the Reserve Bidder Ithuba Solutions with the aim of starting negotiations for a possible award of the tender. Ithuba Solutions earlier this year unsuccessfully challenged the decision by GA to appoint Grow Mine as the Preferred Bidder at the High Court and Court of Appeal respectively.In setting out their grounds for the appeal Ithuba Botswana had outlined various pieces of legislation which they said were flouted in the process of determining the eventual winner.

The company cited in their Filing Notice the Gambling Act and Regulations, as well as Public Procurement and Asset Disposal Act (PPADA) and Regulations guiding the awarding of such tenders.

“It will become apparent that the entire process adopted by the Gambling Authority throughout the course of this tender was contrary to both the letter and the spirit of the relevant legislation.”

It is not clear when Minister Kgafela will decide on the appeal by Grow Mine Africa, trading as Dineo Tsa Pula.

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