BDC files dumped in a shack
Bame Piet | Thursday January 16, 2014 17:16
The company's provisional liquidator Nigel Dixon-Warren confirmed this week that the documents were written in Mandarin (Chinese) and interpreters have been hired to assist.
Dixon-Warren was appointed provisional liquidator by the Lobatse High Court last November after the BDC board chairperson Blackie Marole applied for liquidation on grounds that the company was failing, with no prospects of resuscitation.
Dixon-Warren has already started work and says his preliminary findings are shocking, and present a maze of dealings that resulted in hundreds of millions spent but unaccounted for.
'It is going to be a long journey, there is a lot of work to be done, a lot of stuff to be uncovered and millions to be recovered. The worst challenge is that there are three companies here, but it is not clear which of the two Fengyue companies were doing what. The biggest challenge will be to find the guys, but even more difficult would be to recover the money from them,' said Dixon-Warren, noting that there is also a Fengyue company from British Virgin Islands in the picture.
In the court papers seeking liquidation of the company, BDC cites FGM and Shanghai Fengyue Glass Company Ltd as first and second respondents respectively, and the reason advanced for liquidation is that the two parties are rudderless; no longer exist and the respondent's substratum is no longer there.
The BDC chair also stated that, 'an inquiry is required into the business, trade affairs and property of the respondent to investigate and unearth information pertaining to serious and persisted concerns relating to possible mismanagement and/or misappropriation of funds and possible corruption of the respondent's management and of state officials'.
In the court papers, BDC argues that FGM has failed to comply with the contractual pre-requisites. The agreement was that BDC, as minority shareholder (43 percent shareholding), was to contribute P309 million to the P539 million project and provide a corporate guarantee in favour of a commercial bank to back a P100 million loan.
Furthermore, BDC alleges suspicious transactions; evidence of corporate mismanagement, unauthorised payments and suspension of construction works, and calls for a commission of inquiry to investigate.
The parastatal states that P539 million has been spent on the project, 'yet it is only 40% completed (with an estimated present value of P440 million). A further estimated P765 million is required for its completion. This must of course be viewed against the total estimated cost of P539 million for the project as recorded in both the Subscription Agreement and the Shareholders' Agreement'.
Marole's December 19 petition states that the BDC Board resolved to conclude, and on or about January 15, 2012, the then Managing Director Maria Nthebolan concluded a further loan of P190 million.
'Several of the condition precedent recorded in the Board resolution and incorporated in the Heads of Agreement have not been fulfilled, in particular the failure by Shanghai Fengyue to again provide, amongst other obligations, a performance bond for USD10 million'.
Marole states that a request for P335 million additional funding was unrealistic, and provided for less than half of a recent professionally -estimated additional P765 million. He says that the second loan of P190 million was concluded on April 3, 2012 yet Shanghai has failed to satisfy the condition precedent of the loan by failing to make payment to BDC of P35 million. 'Most importantly, the Second Loan Agreement does not comply with the Board resolution regarding the provision by Shanghai Fengyue of a performance bond for at least US$10 million. The project cannot be completed without sufficient funds, your petitioner is not prepared to invest any further and Shanghai Fengyue does not have the funds to do so and have confirmed same to your petitioner'.
Furthermore, in the 35-page petition, Marole cites incidents that he emphasises should be investigated, as they are tantamount to fraud, forgery and financial embezzlement.
Meanwhile, interpreters are perusing the uncovered documents hoping to get leads.