Wednesday, December 1, 2021

NBFIRA at ease as Bifm-BPOPF saga unfolds

In August 2010, the Non Bank Financial Institutions Regulatory Authority (NBFIRA) approved Botswana Insurance Holdings Limited (BIHL)’s appointment of Tiny Kgatlwane as Chief Executive Officer (CEO) of its subsidiary, Botswana Insurance Fund Management (Bifm). Fast forward to 2015, after diversifying and growing Bifm’s income and actively leveraging off the company’s market leading position, Kgatlwane has been ousted as Bifm CEO after the company lost its P9billion tender with Botswana Public Officers Pension Fund (BPOPF). She will leave her plum post at the end of this month. Sunday Standard reporter Kabelo Seitshiro tracks back to the Regulator, NBFIRA, to discuss implications of Kgatlwane’s shock ouster and the role of the regulator in the saga.
 
Oaitse Ramasedi, CEO of NBFIRA on Friday confirmed that Tiny Kgatlwane has parted ways with Bifm. The BIHL Group terminated Kgatlwane’s contract as CEO of its subsidiary Bifm after the latter lost a lucrative fund management contract with BPOPF. While Kgatlwane’s contract was to end mid 2015, BIHL opted to part ways with her immediately and she will cease to be Bifm CEO end of February. Meanwhile Bifm Chief Financial Officer (CFO) Neo Bogatsu has been appointed Acting CEO.

The NBFIRA Act requires non-bank financial institutions to inform the regulator in the event of departure of a senior employee. Accordingly, the regulator confirmed that he received a letter from Bifm notifying him of Kgatlwane’s exit from the top post.
 
“The letter did not have details of why she is leaving Bifm. So I can’t say whether what has been published in the media is true,” said Ramasedi.
 
He explain that Bifm, as a fund management company, falls under the purview of NBFIRA, which regularly checks its operations and conducts on-site inspections.

“For our off-site inspections, the company has to give us regular reports, which can be submitted monthly, quarterly or annually.”
However, Ramasedi said there is a difference between investigation and inspection. He said it is not for NBFIRA to question why Kgatlwane’s employment contract was terminated, though the regulator is at liberty to investigate if it suspects that such termination had something to do with improper conduct or flouting of set rules and regulations.

“We don’t interfere in employee-employer relationships especially when the employer or employee terminates contracts for their own reasons. But, from the regulatory point of view, there are times where such termination impacts on regulatory aspects and that’s when we intervene,” he said.

Ramasedi also revealed that NBFIRA has had no problems with the 12 fund management companies that are registered locally, including Bifm.

If NBFIRA identifies any problems in the way the companies are being managed, it has the right to put them under statutory management.

“As I speak to you, no companies have been put on statutory management,” he said.

BPOPF is the country’s largest pension fund with assets totalling P45 billion. The total industry assets are worth P65 billion, with P45 billion belonging to government while P20 billion is shared by the remaining 93 registered pension funds. While NBFIRA requires pension funds to submit their investment strategy as a way of ascertaining whether pensioners’ finances are safe, it does not instruct pension funds on who to appoint as their fund managers.
 
“Irrespective of the size of the fund we expect all pension funds to submit their investment strategy and demonstrate how they are going to grow the money. We do not really approve their business strategy but merely check to make sure that the strategy is good and the clients’ money is safe,” he said.

“However, we don’t go to the extent of instructing pension funds to give such and such a company so much business. So we really can’t comment on BPOPF’s decision to terminate its contract with Bifm because it was an operational business decision.”

This past Thursday, Botswana Stock Exchange (BSE) halted trading on BIHL shares. The trading halt was made to allow for dissemination of further information through the BSE regarding reports about a BIHL subsidiary in the local press. On Friday, Bifm said it was not in a position to discuss clients’ information with third parties due to existing confidentially agreements.

“Our focus at Bifm remains on delivering value to clients and we will continue to serve our clients and customers to the highest levels,” read the Bifm statement.

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