Thursday, July 18, 2024

Lottery licence winner in “dirty tricks” boardroom brawl

Botswana’s old boys club which has been awarded the controversial multimillion Pula lottery licence is embroiled in a “dirty tricks” boardroom brawl, forcing at least three shareholders to resign. Allegations of dirty tricks, deceit, back stabbing and violations of corporate governance standards are flying fast and thick as Growmine Africa, a consortium comprising former President Ian Khama’s nephew Dale Seretse Ter Haar, Sefalana Group Managing Director Chandra Chauhan, Collins and Newman & Co senior partner Parks Tafa, Botswana Development Corporation CEO Moatlhodi Lekaukau, Botswana Football Association boss Mclean Letshwiti and businessmen Percy Raditladi, Chairperson of Botswana Chinese Chamber of Business Association, Bing Liua and Puma Energy threatens to implode. Three Growmine Africa directors Ter Haar, Lekaukau and Raditladi have reportedly tendered their resignation letters as the bad blood in the country’s old boys network boils over.

Sefalana, which owns 40% of the country’s lottery operator designate has so far had the worst of the boardroom brawl, accused of dirty tricks, dishonesty and violations of corporate governance standards.The Growmine Africa controversy last week spilled over into the Sefalana boardroom after the bitter Grow Mine Africa Managing Director Percy Raditladi dragged Sefalana shareholders; Botswana Public Officers Pension Fund (BPOPF), Motor vehicle Accident Fund and Debswana Pension Fund and the Botswana Stock Exchange (BSE) into the fray, in a last-ditch effort to prod them to reign in Sefalana Managing Director Chandra Chauhan. A confidential memo passed to the Sunday Standard has revealed how Sefalana Group Managing Director Chandra Chauhan last Thursday moved swiftly to assure jittery shareholders and financial regulators that the besieged Growmine would navigate the choppy waters. The letter was addressed to Botswana Stock Exchange, Botswana Pubic Officers Pension Fund, Motor vehicle Accident Fund and Debswana Pension Fund. States the letter:“It has recently come to our attention that a submission has been made to you on 19 October 2020 evidently by the current managing director of Growmine Africa Pty (ltd) an entity in which Sefalana has 40% shareholding.

DIRTY TRICKS 2
Maclean Letshwiti

“The aforementioned submission was made on Growmine letterhead by Mr Percy Raditladi without knowledge or consent of the Growmine Board.  We have reviewed the content of the aforementioned submission and found that it to be one sided, containing a plethora of inaccuracies and matters that have been incontrovertibly taken out of context,” he said.According to Chauhan, “From the inception of Sefalana’s involvement in Growmine, we have committed every effort to establish a transparent and bonafide regulatory compliance structure and in doing so we have challenged a number of matters that have been brought to our attention, Mr Raditladi is disgruntled by this.”He added that “It is both inappropriate and regrettable that information that is confidential to Growmine and its shareholders has been used to motivate what is undoubtedly a personal agenda. We will be addressing these matters with Mr Raditladi in the coming days and further announcement in that regard will be made in due course where required.

In the mean time we would like to reassure all our shareholders and stakeholders that we will continue to do what is lawful and right for the Sefalana Group.”It emerges from documents passed to the Sunday Standard that Raditladi had reported Chauhan and the Sefalana Group to Botswana Stock Exchange, Botswana Pubic Officers Pension Fund, Motor vehicle Accident Fund and Debswana Pension Fund for allegedly ill-treating him and violating corporate governance standards.According to Raditladi, the fallout started when Growmine Africa was selected as the preferred bidder for National Lottery bid. He said a shareholder identified as Idehill owned by Tafa did not pay for the loans to be converted into shares and did not sign a shareholders agreement.  This had an impact on the minority shareholders as there was insufficient funds. “I was sent to liaise with Mr Tafa to pay for Idehill. I continued to provide services to the company (Growmine) and I was owed over P374 000 which had an impact on my financial obligations. He said his fees were later paid by shareholders among them Sefalana after 13 months.

“Since that time Mr Chauhan has started treating me in a very rough approach and it got even more difficult as suddenly my old matter with BancABC starting rising, handled by a Sefalana Law Firm,” he said. He added that whilst waiting for an evaluation of the National Lottery License there was again a challenge as Idehill was still unable to meet capital called and refused to provide the signed shareholders agreement which was needed for clarity by the Botswana Gambling Authority.He said upon announcement of Growmine as the preferred bidder Tafa called him to come and collect the shareholder’s agreement and he part-paid his capital call by P 1 million. Raditladi then delivered the agreement and the money to Chauhan. “He shouted at me in his office and instructed me to return the P1million and the signed shareholders agreement,” alleged Raditladi. He said since then “he has been badly treated by Chauhan.“To my surprise, when Ithuba Solutions took Gambling Authority to Court of which Growmine is a Respondent, I was authorised to sign resolution as managing director signed by Chauhan as Director. I continue with the services in the best interest of BPOPF, MVA Fund and Debswana Pension Fund,” alleged Raditladi.

He said upon announcement of preferred bidder of Botswana First National Lottery, Sefalana Holding Company allegedly misinformed the public on BSE that it owns 40% of Growmine.“There was however a board resolution that after 17 January 2020, all shareholders who have not paid capital calls will be diluted and that upon award if local shareholders are unable to meet their capital calls they will be diluted. Mr Chauhan even signed a resolution with Sefalana directors that if Sefalana is to finance National Lottery, shareholders will be diluted,” alleged Raditladi. Meanwhile Ithuba Solutions which had participated in the tender alleges that there were some irregularities in awarding it. The company which has some roots in South Africa states in court papers that it was discriminated on the basis of citizenship among others. It states that Discrimination based on citizenship is permitted only where a reservation scheme has been created by the minister and that may only occur in certain circumstances.

“No such reservation scheme governs this tender, and Ithuba has been discriminated against on this (impermissible) basis. Indeed, the issue of citizenship appears to have been the sole pre-occupation of the Gambling Authority and it overshadowed every other consideration in this tender, to the extreme detriment of the technical aspects which the legislation emphases as the primary consideration,” the company states in court papers. It states that some confidential information was also leaked to another competitor during the tendering process, hence the awarding of the tender to Growmine was invalid. The company also argued that the Gambling Authority disregarded the Public Procurement and Asset Disposal Act and its own Gambling Act and Regulations. 

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