Battle begins to recover pensioners' P550m
Mbongeni Mguni | Friday October 26, 2018 13:07
Provisional liquidator, John Little will on Monday face a room full of restless creditors, who are expected to include the Botswana Public Officers Pension Fund (BPOPF) and Bona Life. The two entities are collectively seeking the return of more than P550 million.
A statutory manager appointed by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) suspects the asset manager, under the guise of managing funds for the pension fund and the life insurance company, lost hundreds of millions of Pula through bad investments, alleged fraud and personal enrichment, via a complex web of directorships and shady entities.
Lobatse Clay Works, which has a workforce estimated at 500, was due for a P62 million cash injection by a CMB-controlled fund, which was to take up 80% equity in the company. The 26-year old firm suspended operations earlier this year as a result of cashflow troubles.
Yarona, meanwhile, was due to receive P17 million from CMB under a June 2017 equity deal that would have seen the asset manager take up a 30% stake in the media group and also provide P13 million in loans. The media group only received P13 million and issued a letter of demand through its lawyers in March for the balance of funds agreed to.
Earlier this year, the asset manager fought and lost a protracted legal war against statutory management by NBFIRA. NBFIRA’s statutory manager, Peter Collins recommended CMB’s liquidation, noting that it was irredeemably insolvent and that the assets that could be found were “deteriorating rapidly”.
Yesterday, legal experts close to the matter said most of the major players in the case against CMB had already finalised their proof of claims.
“The first meeting of creditors is to prove claims and also consider the provisional liquidator’s report.
“Some creditors however, may opt to follow an alternative route to recover their funds, but courts generally look poorly on such efforts,” one expert said. The statutory manager’s final report into CMB’s affairs paint a complex jigsaw of BPOPF and Bona Life funds passing through related entities and directorships, into sometimes untraceable investments with undocumented value.
Collins dug up records suggesting that Tim Marsland and Rapula Okaila, CMB’s two shareholders and directors, pocketed millions directly and indirectly from the accounts under management.
Marsland and Okaila paid themselves P225,000 and P157,450 respectively as salaries monthly, while also pocketing P7.7 million and P5.2 million respectively between April and September last year. CMB also paid Emsite, a company in which Marsland was sole shareholder, P4 million in February 2017 for professional advisory, introductory and quantity surveyor services.
The asset manager also paid Tunosast, a company in which Okaile is sole shareholder, P4 million in November 2017 without any supporting documentation to justify the payment, the statutory report alleges.
The statutory manager’s report also claims that Siqokoqela Mphoko, son of former Zimbabwean vice president, Mphekezela Mphoko, received about P2.2 million from CMB between April and November 2017 with no supporting documents.
The October 2017 management accounts, Collins says, reflect an amount of P17, 601 owed by Siqokoqela.
Collins, in his report, says from the time his statutory duties were suspended by the High Court in April, to the time they were reinstated by the Court of Appeal in July, Marsland and Okaile had withdrawn P2.4 million from an account linked to funds from BPOPF and Bona Life.
The account, by August, had P65, 000 down from P7 million in April.
Creditors due at Monday’s meeting also include the National Amalgamated Local and Central Government and Parastatal Workers Union who leased CMB its offices in the CBD and are owed P1.6 million. Grant Thornton is also owed P644,068 for various services.
CMB, through Marsland and Okaile, have challenged the placement of the firm under liquidation and are suing to have the decision set aside.