Monday, October 26, 2020

Makgatlhe calls for more effective regulation

Martin Makgatlhe, the chief executive of Motswedi Securities and a long-time campaigner for non- banking financial institutions authority, warned that the body should be equipped both financially and in human resources for it to be credible.

“This is not a new thing. The regulation is long over-due. I think for it to create trust and confidence it has to be effective,” he said. “Our business is based on trust simply because we are dealing with large sums of money.”

His comments come right on the heel of the non-banking financial institution bill, which is aiming at tight regulation of all the financial institutions falling outside the Bank of Botswana’s mandate.

The bill is aimed at trying to bring the sector to some order and ensure that it is crime free after certain rogue organizations were caught in the act.

The sector manages billion of unsuspecting Batswana money.

“It is in our favour that we do have stiffer regulation because the current regulation is not clear and specific in terms of penalties. It only says that the body (committee) might impose a fine, but does not say how much and, as such, it is not effective.

However, there has never been serious act that show that the regulations were violated,” he said.

However, in the early 2000s there was a case of insider trading and a few years ago Afri-Tourism collapsed following some alleged swindling by some of the top executives of the company. But due to the loose law, which was largely administered by the Botswana Stock Exchange committee, they could not be prosecuted.

“For the legislation to be effective it must be clear and have some specific penalty. And what is being done is that we (stakeholders) are working on some improvements. You must understand that over the years the number of players who entered the market with different characters, tactics and plans and understand that this is done with the aim of improving the system,” he said.

The move come after some of the players in the market were in the last accused of having been involved in cases of being involved in cases of insider trading and mis-selling of shares.

He also indicated that for the regulation to work it must have some teeth and to be adequately resourced in terms of finance and with some investigators and financial experts.

“ We need financial experts who can trail the audit and they have to be very good at investigations. And because of the complexity of the transaction you need experts and these people do not come cheap. Otherwise you have to outsource before you compromise the integrity of the whole organization,” Makgatlhe added.

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