Senior officials at the Ministry of Finance and Development Planning have started calling for a detailed forensic audit of the entire operations of Botswana Development Corporation (BDC).
The Ministry of Finance is the line supervising ministry of BDC, a Government investment arm created to oversee the economic diversification programme through investing in large scale projects on behalf of Botswana Government.
With a multi-billion Pula portfolio spread over diverse sectors like property, manufacturing, hotels and service industries, Botswana Development Company is by far easily Botswana’s biggest investor and financier outside the mining sector.
Prompted by suspicions surrounding some of the large scale investments recently overtaken by BDC, officials at the ministry say they want to determine the corporation’s bill of health beneath the surface fundamentals.
Memories of how Government was forced to recapitalize BDC just over a decade ago are still fresh among ministry officials who say given the prevailing economic conditions, government would not be in a position to bail out BDC should disaster strike at the corporation.
Big projects recently undertaken by BDC include the Seven Star steel pipe manufacturing plant in Palapye that was supposed to supply pipes for the multi-billion Pula North South water carrier project II.
While the tender for the water carrier project is still a subject of dispute between the procurement agency and the Ministry of Water Resources, BDC has in the meantime exposed itself to the tune of P120 million towards the construction of the plant.
Concern has also been raised about Lobatse Tile, a large scale project into which together with Government of Botswana, BDC had pumped P170 million before the project went belly up.
Information passed to the Sunday Standard indicates that the audit proposed by the ministry will primarily focus on systems and procedures at BDC as well as transparency of the corporation’s governance structures.
With the vultures beginning to hover some officials at the ministry also want the BDC board to revisit circumstances under which the current Managing Director of BDC, Maria Nthebolan, was appointed.
Results from the human resource consultants who conducted the recruitment exercise of the BDC Managing Director indicate that of the three contenders who had applied for the job, Nthebolan was not the preferred candidate.
The applicants were Nthebolan, James Kamyuka and Thapelo Matsheka.
The recruitment consultants had recommended Matsheka, who was at the time a Chief Executive Officer of CEDA ÔÇô Citizen Entrepreneurial Development Agency.
After a thorough assessment of the contestants, the human resource consultants had this to say about who best qualified to become the BDC Managing Director: “Overall James Kamyuka indicated marginal performance in both exercises and is not recommended for the role. Maria Nthebolan, based on her interview performance came extremely close to meeting the overall requirement from both exercises and is therefore recommended for the role. Thapelo Matsheka indicated adequate performance in both exercises and distinguished himself as the strongest candidate for the role. Thapelo Matsheka is recommended for the role as the preferred candidate.”
It is not clear how cabinet, which is the appointing authority, ultimately settled for Nthebolan over Matsheka.
In another matter, a recent report of which Sunday Standard is in possession shows that BDC has overpaid a Chinese contractor, Fengue by P100 million for a glass manufacturing plant also in Palapye.
An audit by consulting engineers has also revealed that BDC money amounting to P9 million was illegally diverted to finance an oxygen making project at a site adjacent to the glass manufacturing plant.
Although the oxygen making project has nothing to do with BDC, the corporation’s money has been used to foot the construction of the plant.
Investigations by Sunday Standard have revealed that an executive of Botswana Development Corporation is a shareholder in this oxygen making machine project.
How BDC money was used to finance what is effectively a privately project not related to the corporation remains a mystery that not even the consulting engineers doing the audit could fully explain.
“Please note further that the schedule of paid invoices includes an invoice for Oxygen Making Machine… Oxygen making is not part of the turnkey contract and is being built outside the site as we witnessed at the site meeting. This invoice should therefore not have been paid by BDC,” say the consulting engineers.
The auditing engineers have also discovered that although BDC has paid over 90 percent towards the equipment shipping, very few equipment items have actually so far arrived at the glass manufacturing site. It would be interesting to watch how calls by officials at the Ministry of Finance for a full scale audit of BDC pan out, given the fact that the Permanent Secretary, Solomon Sekwakwa, is Chairman of BDC, while the Minister of Finance, Ken Matambo, is the immediate past Managing Director of the corporation.
A long time Managing Director, Matambo retired from BDC a few years ago and shortly thereafter took up a cabinet position as Minister of Finance.
Matambo is currently facing criminal charges related to conflict of interest emanating from his tenure at Botswana Development Corporation.