Wednesday, June 7, 2023

Lobtrans collapse shakes banking industry

Botswana’s three biggest banks are expected to suffer a crippling hit following the unexpected liquidation of one of Botswana biggest companies, Lobtrans.

Details are beginning to emerge of how the collapse of Lobtrans, under a P300 million debt, may hemorrhage First National Bank Botswana, Barclays Bank and Standard Chartered.

The country’s biggest truck operator went on its knees this week and already there are fears the Bank of Botswana may have to intervene to rescue the country’s financial sector which stands to be badly hurt.

Lobtrans owes a number of local banks millions of Pula in loan money, estimated to be around P300 million.
The truck company was placed under judicial management this week, sparking fears that many of Botswana’s banks end of year results will be negatively affected.

All the banks owed by Lobtrans are listed with the Botswana Stock Exchange.
Analysts were this week united that the Bank of Botswana would have to intervene to save what can easily degenerate into Botswana’s worst financial crisis.
The chunk of the sum owed by Lobtrans is due to FNB Botswana.

Standard Chartered Bank Botswana and Barclays Bank, who are also exposed and are said to be the ones that initiated the judicial process.

This week the Head of Public Affairs at Standard Chartered, Thabi Letsunyane, confirmed to The Sunday Standard that the bank has already suspended one of its branch executives at the Lobatse Branch pending investigations.

The suspension is meant to ascertain what could have happened that such huge financial oversight could have occurred. Unconfirmed reports indicated that Barclays Botswana had also taken the same route to suspend one of their executives.

In the meantime, Lobtrans workers went without a month’s salary.
A former partner at Deloitte and Touch├®, John Stevens, has been appointed provisional Liquidator by the High Court.

All interested parties with an objection to permanent liquidation of the company have been asked to present themselves before the Honorable Court on 22 February 2008 to show cause as to why the envisaged process of liquidating Lobtrans should not be taken to finality.

Lobtrans owns the country’s biggest trucking fleet and until this work was showcased as an example of Botswana’s potential to succeed in cross border international business.

The fleet which ferries fuel from Durban into all BP fuel stations across the country is also the mainstay supplier to Debswana diamond mines.

Lobtrans Pty. Ltd, both with Lobatse Cash Store 1961 had been arraigned before the High Court in Lobatse by Barclays and Standard Chartered Banks for urgent hearing whereupon the court directed that the duo be placed into provisional liquidation.

Letsunyane confirmed, “The Lobatse Branch Manager has been suspended pending investigations into some transactions involving Lobtrans.”
Addressing shocked employees on Friday at the premises, Stevens told them that their company had died.

“The Company that employed you died yesterday. Whatever contract or anything that had to do with Lobtrans has ceased and I, therefore, cannot speak on behalf of a non existent company.”

Information turned up by Sunday Standard investigations indicates that Lobtrans, part of the Asmal Group, owed monies to the tune of P270 million to various creditors. Stevens told the workers that he was arranging for a lifeboat to pay for the workers’ January salaries. Monthly salaries are in the region of P750 000.

“I am aware that some of you have not yet gotten you January salary. For that reason, I have arranged some money in the banks for your payments.”
He also assured them that their benefits such as gratuities would not be affected in the short term.

Stevens further told the distraught crowd that he had appointed Unitrans, another locally recognized transport company, to continue to run the Lob-Trans fleet pending finalization of the relevant legal processes.

He said there are mainly two reasons for the arrangement: first, in order to raise more money to pay the creditors and to keep business going and, secondly, the arrangement would have the effect of employing part of the now redundant staff.

Mike Steel, General Manager of Unitrans, had this to say, “We will save more jobs.”

Steel said they also expect to take a sizable part of the operational and support staff, enough to have the fleet running. He said interviews will be conducted with a view to restoring full operations on Monday.

In the meantime, former Lobtrans employees have been advised to reapply.
According to Steel, those who become lucky and find a job with Unitrans will be on new contracts and terms of employment.

He said should the liquidator decide to sell Lobtrans tankers, his company will be interested.

In total, Lobtrans employed about 300 people. “I served this company since 1987, and for me to be left in limbo like I never mattered is simply hard to understand,” Mosepele Moswai, a married supervisor with three children.

To highlight the seriousness of the situation, one of the former company managers, Isaac Botlhole, asked Stevens during his address, “Does it mean that we are dumped, just like this without regard to what the job meant to our families?” To this the Liquidator responded, “I am sorry I didn’t do it but that’s what it is, unfortunately.”


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