I wish to thank you for according me an opportunity of right to reply following the malicious article that was published in the Sunday Standard news paper dated 6th February 2022.
It appears you have been furnished a report that was done following an investigation by BAMB which unfortunately did not contain my views.
What I can state for a fact is that, there have been two investigations by DIS and OP both of which generated reports. The two reports more or less came out with the same findings and recommendations that there was NO wrong doing on my part as BAMB CEO. BAMB were infact told to reinstate me back to my former position as CEO.
Since BAMB board didn’t get their expected out come from the two reports, which are that there was some wrong doing, they have since refused to accept the report and its recommendations.
Instead they carried out their own “investigation” headed by Tumelo Keitumetse, their head of Internal Audit. It is very clear that they wanted to generate an outcome that will go with their deep rooted hatred for Morakaladi.
By taking their report to Sunday Standard, the hope is to drive and support their narrative that there was corruption on my part and therefore justified in reneging on my contract.
What they also didn’t disclose is that two Board members have since been fired for the manner in which they handled my contractual issues. Mrs Ruth Mphati, former chairperson of the Board Audit Committee and Ms Zibo Nthobatsang former Head of HR Commitee. The former’s term was still left with over 6 months while the latter still had 2 years left.
That is why the report they brought will not have Ms Mphathi’s signature on it as she was fired last year.
It is therefore my strongly held view that the so called report has been doctored to tarnish my name and give substance to the substantive appointment of Benjamin Ditsela.
What they also kept away from you is that Benjaim Ditsela, their prefered appointee for CEO position failed his interview. It is on record that he came a distant third after two other candidates names withheld.
Regarding the main contents of the article, I wish to respond as follows;
1. USE OF 30 MILLION SGR FUNDS.
This is a factual point, it is true that during my tenure, some funds that were coming from the ministry were appropriated towards operational side of BAMB. This however was a prearranged and agreed arrangement with the then PS of agriculture since the ministry owed BAMB over 80 million and the ministry was not yet in a position to pay its debt.
The agreement was that the money should be reflected as a debt to the SGR since the pressing matter was to facilitate the operational side of BAMB. That money has been captured accordingly.
2. P 280 MILLION OWED TO SGR.
Yet again this is a fact. BAMB during my tenure traded and rotated the Strategic Grain Reserve stock to the tune close to BWP 280 million.
For the record BAMB manages on behalf of government through an agency agreement. This agreement has provisions that allow for trading with the SGR stock at a set commission provided necessary approvals are sort and granted. That is how this debt came about. The reasons behind such trading was based on the precarious financial position that I found BAMB in 2018, owing financial institutions close to BWP 300 million with outstanding receipts well over P 180 million.
Commercial Banks were calling for payment as all of these loans had prescribed, the bulk of outstanding receipts were due from the Ministry of Agriculture. As part of the recovery strategy, management efforts focused on aggressive collection and sales both locally and developing the export market.
The foregoing was against the backdrop of BAMB silos full to capacity with sorghum some of which was bought as far back as 2014 from South Africa but with little to no sales. So the sales efforts got in action and sorghum started moving. All these efforts assisted BAMB to liquidate all their debt from financial institutions resulting in cost cutting from high interest rates and hefty installments. Between 2018 and 2021, BAMB managed to pay off the P300 million and consolidated its facilities with one bank with only BWP 49 million being the only exposure.
The trading in SGR was therefore a business decision to rather owe the shareholder and avoid hefty loans but keep the business afloat and profitable. In 2019/2020 financial year BAMB posted a P 70 million profit out of these efforts.
An audit process was carried out towards the end of my tenure that verified the SGR account and its debtors. The Head of Internal Audit chose to carry his own audit again after my departure to fullfill his team’s motive.
3. UNPROFITABLE SALES
This is a drive by the Head of Internal Audit to falsify reports using dubious means to achieve his drive to discredit the former CEO.
The context to sorghum sales is that the product attracts very thin margins due to costs associated with procuring the product from Pandamatenga and transporting it to the southern parts of the country. The article spoke of two contracts that are sighted as unprofitable and suggested corrupt practices.
Facts around these sales are as follows;
a) Farmwise – this is a South African based company that we identified and had an appetite for Sweet Red sorghum from Botswana. For us at the time this was a perfect opportunity to generate the much needed cashflow and enter the export trade.
However we had to compete with other sorghum from the rest of the continent and even as far as Brazil. The deal was as such structured with thin margins but most importantly using our own transport to avoid getting into a loss-making situation out of the deal. That indeed happened. What the Head of Internal Audit at BAMB did during his own investigation was to ignore the fact that BAMB trucks were used to deliver this product to keep costs low and instead used rates for private owned
trucks to portray a bleak outcome. This is not only unethical but also misleading not only the public but the shareholder as well.
b) Sefalana – this client for the first time ever signed up a sorghum contract for twenty thousand metric tons of red sorghum in 2019. The value of the contract was about BWP 60 million. The same principle applied to costing based on use of BAMB trucks to cut costs. Sefalana went a step further to pay BAMB BWP 10 million in advance as the cashflow situation at the time was in the red. Annual reports and other records are there to prove this. The first few loads to Sefalana were delivered combining BAMB trucks and private trucks as delivery of BAMB new trucks was set back six weeks due to covid outbreak. However as soon as the trucks arrived, BAMB used their trucks to deliver on this deal. Here yet again Head of Internal Audit applied private rates wholesale and ignored existing records.
4. SHORTAGE OF SORGHUM
The article goes on to speak about shortage of sorghum grain, blaming this on reckless trading of the SGR. The truth is that indeed BAMB has run out of sweet red sorghum grain, however this was not entirely as a result of over trading. The reason the country has run out of sorghum is as follows,
a) During ploughing season 2020/2021, the country’s biggest producer of sorghum, Pandamatenga Farms, experienced unprecedented amounts of rainfall pushing the ploughing season very late. Even after ploughing, more rain was received damaging large tracks of planted fields.
The end result was that out of the projected 60 000 metric tons from Pandamatenga, only 20 000 tons were harvested. Leaving a deficit of 40 000 tons of grain.
Unfortunately at the time when BAMB had to focus their attention on harvest and business related issues, management only focused on the departure of Morakaladi and trying to find fault and justifying his purging. To date 12 months later they are still at it.
Issues of grain shortage are very normal for a grain board such as BAMB due to natural factors like drought or flooding. However if management gives attention to personal issues which in this case is embarrassing Morakaladi, they lose the opportunity to come up with alternative sources of grain. It was only late in the season when millers complained about lack of sorghum that they started searching for large quantities of sorghum grain sending panic in the market and driving prices out of control.
We have had experience with yellow maize deficit from local harvest, but we were able to forecast this in good time and secure alternative supplies while prices were still reasonable.
5. HIGH COST OF TRANSPORT
Every year at BAMB the cost of transport goes hand in hand with the size of harvest.
Sorghum is the biggest cost driver during harvest time as it has to be transported by road from Pandamatenga to the southern parts of the country. During the period under review, the country experienced a bumper harvest of close to 60 000 tons of sorghum compared to the previous year where only about 29 000 tons were realized, followed by 20 000 tons in harvest period 2021.
Of note also is that at the time when there was bumper harvest, BAMB had not received its new fleet of trucks as a result of COVID issues. It was for this reason that private trucks were used to cover up for truck shortage and were terminated once the trucks arrived.. The Head of Internal Audit is aware of this and has a report to that effect.
6. 47 MILLION LOSS YEAR 2020/2021
This is also factual, however this has nothing to do with pricing or reckless trading. BAMB like every business went through a tough trading period during covid as sales were low.
What was not disclosed in the article is that 50% of the said 47 million loss, were write-offs on overdue amounts owed to BAMB by the Ministry of Agriculture. This is in line with the new IFRS reporting standards. The Internal Auditor is aware of this and also the fact that the previous year BAMB posted a profit of 70 million.
As I conclude, I wish to state that, all these stories and purported reports are the makings of BAMB new management and Board who are hellbent on tarnishing Morakaladi’s name.
BAMB board has never even once called me for a meeting/hearing to clarify any of their suspicions during my tenure and past my tenure for the simple reason that they do not want to hear the truth. They have peddled half-truths to the shareholder and are now working around the clock to feed the nation twisted facts.
I therefore challenge BAMB Board and Management for an open question and answer forum so that all their concerns can be factually answered. Beyond this, I see their actions as malice which does not only mislead the public and shareholder but also a waste of tax payers money.
* Leornard Morakaladi is the immediate past CEO of BAMB (Botswana Agricultural Marketing Board)
