Monday, July 4, 2022

Marole becomes the fall guy of an economy in a freefall

Barely a year into his second, five year contract as Managing Director of Debswana Diamond Company, Blackie Marole has been told to leave.

Marole left after a unanimous decision by shareholders that Debswana has not performed over the last few years, The Telegraph can reveal.

Marole was taking over from the swashbuckling Louis Nchindo who died earlier this year.
Marole’s tenure coincided with what has been described as the most difficult economic slump in living memory.

At the height of the turmoil he was forced to close the mines for some time as a strategy of cutting operations costs.

Investigations by The Telegraph have revealed that Marole was asked to leave after Debswana shareholders agreed amongst themselves that their assets could yield a much greater value only if there was management shakeup at the top.

“There was consensus that he was no longer the right man for the job under the circumstances,” said an insider representing one of the shareholders.

There have been speculation in the local media that Marole was pushed by long running board brawls, especially because some senior members of the board have been known to harbour ambitious to get the position for themselves.

But a senior executive at De Beers has told The Telegraph that while there have been bad blood between Marole and some Board members, especially those that represented the Botswana Government, he left not at the instance of the Board but after shareholders said they wanted to take the company to another level.

Debswana is a 50/50 shareholding between Botswana Government and De Beers.

“The general consensus is that Debswana, especially Jwaneng is a world class asset that needs a world class manager,” said a De Beers executive who did not want to be named for fear of annoying the other shareholder.

He said given the value that the shareholders have lost over the last few years it is unlikely that shareholders would want to pick any of the current directors to become MD.

At the height of recession Debswana had to close down its mines as diamond demand plummeted.
On Monday, Debswana announced that Marole was retiring.

His contract was still to run for a further four years.

“The Board of Debswana has announced Managing Director Blackie Marole’s intention to retire from the company after six years of service. Having steered Debswana through many challenges, the biggest of which being the recent global economic crisis, the Board accepted Mr. Marole’s resignation, expressing gratitude for his service and agreeing that it was the right time for new leadership to tackle Debswana’s current and future challenges,” the press release said somewhat flatteringly.

The statement further said he would remain until a replacement had been found.
So far indications are that the position will be delocalized.

“Debswana possesses world class diamond assets and in a post-recessionary environment in which growth in the world’s major consumer markets remains fragile, Debswana must complete a broad Operations Review to secure its long-term future and ensure it is maximizing the value and life of Botswana’s diamonds.”

While the search for a new MD is already on, it does not look like a replacement will emerge any of the Board Directors.

From the Botswana Government side, the directors are mainly civil servants who as it is do not fit the bill of a managing director the shareholders is looking for.

Others would be discounted by the fact that they are running entities that have been underperforming just like Debswana.

The fact that shareholders have come out clearly to say they want a “world class manager” has put paid to speculation that somebody might emerge from among the Board members to succeed Marole.

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