Friday, December 4, 2020

National Lottery winning bidder challenged

The future of Botswana’s first National Lottery hangs in the balance as the Gambling Authority threatens to launch an investigation into how it selected Grow Mine Africa as the preferred bidder.

This was after the Authority received a complaint filed by one of the former directors of Grow Mine Africa, Percy Raditladi calling into question issues relating to corporate governance at the company. Raditladi resigned on 22 October after alleging violations of corporate governance at the company.

In a letter dated 5th November, Thuli Johnson, the chief executive of the Gambling Authority informed the Chairman of Grow Mine Africa, Chandra Chauhan that the “Authority has received a letter, through the Virtual Data Room (VDR) that has been also distributed to other institutions and appears to be in the public domain from Percy Raditladi, representing himself as the chief executive of Grow mine (Pty) Limited, t/a Dineo tsa Pula.”

According to Johnson, “The letter raises a number of corporate governance issues related to your application for the National Lottery Licence including issues directly related to the application itself.”

Johnson informed Chauhan who is also the managing director of Botswana Stock Exchange listed Sefalana that: “As you are aware, the Authority is scheduled to enter into negotiations with yourselves which may result in the awarding of the National Lottery Licence to yourselves having been selected as the preferred applicant. Therefore, the issues that have been raised in the documentation received are deeply concerning us.”

He said it is in this context that the Authority requires “your response to the issues and your full and thorough explanation pf the allegations that are made in the letter and other documents attached to the letter.”

At the core, Johnson said their concern related to the veracity of the assertions and commitments made in Grow Mine Africa’s application document that were the basis of evaluation and adjudication.

“Some of the issues we would like you to address specifically are the following; one of the allegations in his letter is the suggestion that a change and dilution of shareholders and the percentage holding of each as provided in the application document place in June 2020 and is still ongoing. We require you to confirm if this is the case and to provide confirmation of paid up shareholders and what their percentage shareholding is,” said Johnson.  

The Authority requires that a schedule of payments made by all shareholders be made available to it.

“The schedule also details the total amount of contributions that each individual and entity were expected to make available and a letter from each shareholder as to how and when they have funder their contribution,” said Johnson.

He said the documents from Raditladi also suggest that the relationship with “IGT and the technology provider had in fact not been finalised at the time of submission of the licence application and at this time. Please confirm or refute this and provide the contract documents including the terms and conditions of the relationship and the services to be provided between the parties.”

Johnson said it also appears to the Authority from the documentation received from Raditladi that fundraising required to conduct the national lottery (“the Project”) has not been completed and remains uncertain.  He therefore requested Chauhan to address this issue demonstrating the committed funds for the Project and your ability to execute the Project if awarded.

“You are indeed aware of the guarantees that the Authority would like in place as well as the investment funds required to enable the project to proceed,” said Johnson.

The Authority further required responses to the above and to the other issues raided by Raditladi in so far as they relate to the requirements for officials of the applicants to be ‘fit and proper,’ which is a key requirement for the licence to be awarded.

“This letter is a letter of enquiry. Where there is potential harm to the reputation and the execution pf the National Lottery, the Authority is required to ensure that these events are immediately investigated and mitigated against. We assure the applicant that the Authority has in making this request rendered no opinion or made any assumptions regarding the application of DTP (desktop publication). However, these issues are considered serious enough to warrant our inquiry,” said Johnson.

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The Telegraph December 2

Digital edition of The Telegraph, December 2, 2020.