Letlole la Rona, whose portfolio features industrial, retail, office and residential properties around Botswana valued at P1.21 billion, held an AGM in December. Grit however tried unsuccessfully to adjourn the meeting, citing “an urgent, significant and material matter” requiring the board’s attention before the AGM.
The failed bid was the latest sign of shareholder tensions in Letlole, in which Grit, a Mauritius domiciled entity with roots in London, at some point held 30% equity, second only to founding shareholder, the Botswana Development Corporation (BDC) with 40%.
At the AGM, the re-election one of Grit’s directors on the Letlole board was rejected by shareholders, although the pan-African group still has three out of five seats after the meeting.
“One issue that has been raised is how the BDC, which has 40% equity, does not have a seat on the board, while Grit at one point had four people and just over 20% equity,” an insider told BusinessWeek. “Grit has felt that ahead of the AGM and at the meeting, the BDC and the Botswana Public Officers Pension Fund have been conniving to get take back board control and that this was an urgent matter to be discussed prior to going ahead with the meeting. “However, it is quite possible and proper that shareholders may meet, discuss and agree what positions they want to take on certain issues, without being said to be conniving.” Grit subsequently sold 19 million linked units on December 30, with the majority of these going to the pension fund, which is now Letlole’s second largest shareholder with 26.2%.
BusinessWeek is further informed that shareholders are uneasy about Letlole push into Africa, with concerns that Grit is controlling the expansion and could be the primary beneficiary. At an Extraordinary General Meeting in July however, shareholders overwhelmingly supported Letlole’s investment into a Kenyan property, as part of the African expansion.
Grit executives did not acknowledge or respond to detailed questions emailed to them on the subject, while as at Press time, representatives of Letlole were yet to answer BusinessWeek’s enquiries.
In its announcement of the AGM results, Letlole said the board would consider the Grit’s urgent matter further. “Following these deliberations, the board will provide detailed commentary to all unitholders on the matter, should it be deemed material,” the board said.
The latest issues at Letlole are however not unique as the local property firm has faced tensions of one type or another in recent years at executive and investor level. In 2021, several directors stood down abruptly, with media reports alleging that this was due to external pressure from political actors.
In the year before that, the group’s then CEO, Chikuni Shenjere-Mutiswa, was fired after allegations of gross misconduct.
Despite the troubles, Letlole was one of the biggest gainers on the Botswana Stock Exchange (BSE) last year, with its share price putting on nearly 37%. Since its listing in 2011, Letlole la Rona’s share price has gained a net increase of 125 percent, measured up to Wednesday this week.
The property group was established in 2011 as part of a divestment attempt by the BDC, via an Initial Public Offer and subsequent listing on the BSE.
