The Board of Letlole La Rona property company has been caught napping after it emerged that they unknowingly triggered company provisions that would see the company make a payout of P30 million to executives.That happened after a change of the Board make-up.Faced with a huge bill to executives, Letlole Board has responded by suspending the Chief Executive Officer Chikuni Chenjere Mutiswa and instituting an investigation of the company documents – chiefly those that led to the company being lumbered with a P30 million bill obligation.
A clear suspicion among the Board of Directors is that the executives have connived and might have tempered with documents.On the other side, there is a counter suspicion that this is a clear and typical case of malignance on the part of a Board that does not read documents that they approve or append their signatures to, which by the way is rife in Botswana including among large companies that are publicly listed.The Board says preliminary investigations have already borne out their fears and suspicions.As a consequence, the Board has engaged the services of LTI Consulting to undertake a thorough investigation into issues of documentation and all matters related and leading to the P30 million claim.
The investigations will centre around a long-term incentives program called LTIP that was conceived to make some guarantees, obligation and, rights to the company, to management.The program among other things guarantees a calculated payment to executive management in the case of a substantial changes in the ownership of the company, delisting or in the case of the Board undergoing substantial changes.The agreement with company executives was signed December last year.Since then the company has experienced a massive surge in its stock price.And there has also been substantial changes in the make-up of the board which took place up to April 2020 when executive management lodged in a declaration making the case for their payment claim.
According to contents of LTIP seen by Sunday Standard the five-year program has a number of trigger mechanism that would necessitate incentives payout to executives.These include change in control of company, change in Board makeup, performance of management as well as in the incident an executive resigns or is fired.Management lodged their claim after the makeup of the Board substantially changed.After management lodged their claim there was a dispute with the Board leading to suspension of Chief Executive.In her suspension letter, Board Chair Boitumelo Bogopa says that the company has prima facie evidence that there has been tempering with documents.
“As you are aware the Company has been investigating the circumstances surrounding the execution of the long-term incentive plan (LTIP) Policy. The initial investigations have revealed that there is a prima facie case of misconduct against you. The investigations are still t5o be completed however the Board has resolved to place you under suspension with immediate effect pending the conclusion of investigation. You shall remain suspended until further notice,” writes Ms Bogopa in her letter to the CEO.
Indications are that there will be a strong push back by the suspended CEO.