Thursday, July 7, 2022

“Congratulations for breaking the BIHL/BIFM story”

Dear Editor

Congratulations for breaking the story on the BIHL/BIFM affair in which the ‘gang of four’ purchased P30 million shares.
This is what Botswana needs more.

I am pleased because this cuts across moral, ethical and governance issues that we need to keep our eyes on.

Firstly, it is laughable that MacLean Letshwiti should be crying crocodile tears that he ‘turned the company around and this is what he gets’. Give me a break! And forgive if I don’t shed tears for you. Let us be clear, he was employed and he was paid to do a job, and in the process if he did his job well and turned around the fortunes of the company he may have received a performance bonus for it. If he didn’t, then he should have been bright enough to have negotiated a performance bonus in his contract. He should not come back years later with the expectation or entitlement to have a first bite at the cake.

What is evident in Botswana is that there is a small clique of ‘4×4 top of the range station wagon brigade’ who have senior positions in parastatal and private sector companies that control vast amounts of money and are prone to use loopholes to exploit things to their benefit. There may be nothing illegal in their actions but they stretch the envelope to the limits.

It is strange that they can get a loan for P30 million, (P7.5 million each). Not many of us can get that amount let alone a measly P75 000 without securing everything we own only to be turned down because we are a bad credit risk. Unless we can offer more…..

True the bank will have taken the shares as security because they are valuable, but let us suppose …… Now this is pure conjecture and supposition and not based on any fact.

Barclays Bank Botswana is in a fix; it has lost millions in the LOBTRANS saga. Their shares on the stock exchange are falling, and the balance sheet does not look good either. So how about getting a lump sum deposit/investment fund deposited into the bank? This makes the balance sheet and liquidity look better. Oh yes, BIHL has lots of investment funds (billions), why not get a lump sum invested for, say, 5 years. The bank benefits by turning the money around through lending and the investing company gets a return on investment and everyone is happy. I scratch your back and you scratch mine.

Remember this is only supposition. But let us look at this further. There may be other areas where wheeling and dealing goes on in our corporate boardrooms. Botswana is a small community and, therefore, it is a breeding ground for conflict of interest, poor corporate governance, moral and ethical issues and a culture of entitlement at the top when it is the same small elite group of individuals that serve in multiple boards.

There are issues of insider trading too, when a nod and a wink from a good buddy is enough to buy or dump shares, leaving the poor individual investors to lick their wounds. You don’t believe it? Ask ENRON.

As a newspaper, you have to dig deeper because there was a noticeable closing of ranks that leads me to think there is something a lot deeper and not kosher in this affair.

Oupa Modike



Read this week's paper