The Department of Transport is being investigated for its part in the Lobtrans multi-million Pula alleged fraud which is shaking the local banking industry.
The Botswana Police Service has opened investigations following reports from the banking sector that officials in the Department of Transport may have helped Lobtrans forge blue books for their fleet of trucks and hide the extent to which the company was indebted to the country’s three commercial banks, Wesbank (a division of the Fist National Bank of Botswana) Barclays Bank and Standard Chartered Bank.
This helped Lobtrans to get refinancing for their fleet, increasing their debt to about P300 million at the time the company was put under liquidation earlier this year. Sunday Standard investigations have revealed that when the banks moved in to attach the Lobtrans fleet they had financed, they discovered that the blue books had been forged to indicate that the trucks were not bonded to them.
This was after Barclays Bank and Standard Chartered bank had stumbled on a Lobtrans kite flying scam that the company used to hide its financial crisis from the two banks. Under the scam, Lobtrans wrote a number of checks moving money to and fro between Standard Chartered Bank and Barclays Bank to create the impression that the company was financially sound.
There are also fears that millions of Pula were bled from the Lobtrans system leaving local commercial banks with very little to salvage from Lobtrans. Lobtrans, the country’s biggest truck operator, went on its knees earlier this year and the fall out of its collapse has already started reverberating in the local banking sector. Two senior managers at Barclays Bank and Standard Chattered Bank are under suspension and more heads are expected to roll.
Barclays Bank last week issued a cautionary announcement warning that its profits may be down by about a quarter from the initial projection.
Meanwhile, the man behind Lobtrans, Abdool Saned Asmal, has filed an urgent application opposing the application by Barclays Bank and Standard Chartered for confirmation of his company’s liquidation. There is also another by Rahim Khan who is acting for Lobtrans employees to seek the authority of the Court to appoint a certain Mr. Zinan from South Africa as their co-liquidator in the matter.
As a result, the case, in which Barclays Bank and Standard Chartered are demanding confirmation of provisional liquidation of Lobtrans PTY LTD and Lobatse Cash Store 1961 LTD for their indebtedness to them, has been postponed to April 3, 2008. The matter was initially set for February 22 and another application by Rahim Khan, on behalf of former Lobtrans and Lobatse Cash Store workers, Reuben Kamushinda of Kamushinda Attorneys, said, “There is a general opinion that there are other options to explore, than liquidation, and thus our client’s instruction that we file opposing papers to oppose confirmation of provisional liquidation and, therefore, needed time to file opposing papers.”
Kamushinda said that they received instruction from Asmal in the afternoon of March 21, the day before the matter was to be heard. According to Kamushinda, April 3 was the earliest date the Court could avail, and was found suitable for all parties.
“Additionally,” said Kamushinda, “the former employees of the company also put it to the Court that they will require at least two weeks to file the relevant papers before the Court, so that in the final analysis a date that suited us all was identified as aforesaid.”
When approached for comment on his involvement in the Lobtrans affair, Rahim Khan, of Rahim Khan and Co. Attorneys, had this to say, “It is true we are representing former employees of Lobtrans and of Lobatse Cash Store in the case.”
However, Khan said that his firm is only acting as correspondents for a South African law company, Honey Attorneys, who will actually be acting on behalf of the employees.
“We have been instructed by the Botswana General and Commercial Workers Union and Botswana Beverage and Allied Workers Union to intervene on behalf of their members who have lost their jobs, stand to loose their terminal benefits if the company’s assets are to be directed solely towards the settling of the banks’ entitlements. “Therefore, (we) have been instructed to file an application seeking the appointment of a co-liquidator, first, to assist the current liquidator, Mr. John Stevens, or whoever shall have been elected in his stead, and second, and even more importantly, to represent the interests of our clients.”
Information passed to Sunday Standard indicates that at least 97 drivers who worked for Lobtrans are members of BGCWU, whilst 48 former employees of Lobatse Cash Store belonged to BBAWU.
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