It has turned out that Accountant General Emmah Peloetletse was on August 23, 2019 referred to the Directorate on Corruption and Economic Crime (DCEC) by the Botswana Public Officers Pension Fund (BPOPF) Board for investigation on the Capital Management Botswana (CMB) matter.
This was after an unknown whistleblower reported that Peloetlese was a beneficiary of a luxurious jazz festival trip to Cape Town, South Afrcia by the controversial CMB in March/April 2017.
Peloetletse has since been removed from the Board of Trustees of the country’s largest pension fund.
Peloetletse previously served as Chairperson of Fund’s Investment Committee, a very key and influential position within the Fund governance.
It is at the investment committee that appointment of managers are made, as well as important investment decisions within the P64 billion pension fund.
Petloetletse made it to the BPOPF Board of Trustees as a government trustee representative. She is also alleged to have been a strong ally of the former BPOPF chairperson, and suspended Permanent Secretary to the President (PSP), Carter Morupisi.
In a letter to the BPOPF board chairperson on June 17, 2019, Peloetletse confirmed that she was invited by the CMB to a “partly sponsored trip to Cape Town Jazz Festival”.
She said upon receipt of the invitation from CMB, she informed the BPOPF Chief Executive Officer (CEO) Boitumelo Molefhe about the invitation and she did provide her approval.
“I would also like to further highlight and confirm that during the attendance of the festival in question, no discussions were held between myself and CMB management or any other person regarding CMB’s role as an asset manager of the fund,” Peloetletse said.
She denied any corrupt practices or wrongdoing on her part as alleged by the whistleblower.
According to sources privy to the pension fund portfolios, for a very long time there has been a cry on the conduct of the Board of Trustees who have had a tendency to be induced with material benefits to favour certain investment managers.
Cape Town Jazz Festival is a big feature amongst Botswana trustees, who throng the event at the invitation of service providers to the pension funds.
“By accepting a gift to CMB by attending the jazz festival, the Accountant General contravened the gifts policy of the BPOPF.
Other examples abound, showing that this problem is not unique to the BPOPF Trustees.
For many years, trustees have been treated to overseas trips under the expense of foreign offshore managers. At these capitals of the world, Batswana trustees are wined and dined so as to ensure the continuous grip of Botswana pension assets to these foreign managers.
Botswana remains one of the very few countries that has its pension assets majority invested outside, and experts blame the influence and under-the-table dealings with trustees having maintained this worrying problem,”
A chain of correspondence reveals that at the sitting of the BPOPF Board on August 22, 2019, the Board of the Fund, having considered the matter at length, resolved to refer the Accountant General to the DCEC for further investigation.
Prior to that, the Accountant General indeed confirmed the suspicions of the Board by a letter from June 17, 2019 that indeed she had attended the luxurious Jazz Festival at the invitation of CMB. Coincidently, after the said sponsored trip, the BPOPF Investment Committee chaired by Peloetletse increased the CMB assets, which they managed on behalf of the BPOPF. It is alleged that a lot of the rot, which is alleged by BPOPF and the State in a case against CMB happened under the watch of the Investment Committee.
“The allegations against the Accountant General Peloetletse do not bode well for the general confidence in State institutions. That she is being investigated for corrupt practices in the current climate of numerous corruption allegations doesn’t sit well with many that wish to care about our economy. If the very gatekeeper is herself entangled in corruption, this is clearly not right. That CMB being accused of wrongdoing is one thing, but that the Accountant General and the chair of the BPOPF Investment Committee is also alleged to have corruptly benefited from the very said company that she ought to have overseen doesn’t bode well for the many pensioners of this country, let alone the integrity of many government institutions,” the source further said.
He said trustees of pension funds have a fiducial responsibility to look after the interests of pensioners and if found to have done wrong they could be criminally prosecuted.
“There is therefore a need for trustees to be free of conflict of interest. So far it would appear that the country’s most important custodian being the Accountant General has failed this test.
Stronger regulation should go a long way towards addressing this. Unfortunately, Non-Banking Financial Institutions Regulatory Authority (NBFIRA) has been a reluctant player to take on the industry and stop the many reported abuses,” another industry source said.
He explained that apart from the Accountant General, other BPOPF officials, and former trustees are thought to also be investigated.
In particular, the investment manager (name known to this publication) is thought to have amassed wealth through questionable means. It is thought that he has managed to nest a sizable property portfolio and open a healthy bank account in Mauritius.