CMB bosses face investor firing squad
Mbongeni Mguni | Friday January 18, 2019 18:00
The firm’s provisional liquidator, John Little, has reportedly issued subpoenas for CMB directors, Tim Marsland and Rapula Okaile as well as possible “others” who will only be known on the date of the enquiry.
The face-off will be held before the Master of the High Court in Gaborone, as part of the fact-finding provisions of the Companies Act.
“The creditors whose claims have been confirmed by the Master will have an opportunity to examine and cross-examine the directors,” said attorney Tshiamo Rantao, who is representing the Manual Workers Union, in their claim. “They are obliged to be there and if they are not, then the Master exercises the relevant powers. That is the process under the law.”
Another legal expert close to the matter told BusinessWeek that the February 12 to 14 enquiry was an interrogation to discover facts around the circumstances leading to the liquidation of CMB. While ignoring the subpoenas carries criminal consequences, one of the directors, Marsland, is reportedly in South Africa where Botswana warrants do not apply. His appearance can only be guaranteed by extradition, which BusinessWeek is informed has not been considered.
“We know the two directors must be there, but there are indications the liquidator could also require other people to come forward and answer creditors’ questions. “We won’t know until the day. “It’s possible one of the directors may not pitch up or that their counsel may find a way to postpone the enquiry. No one wants to be put in that situation,” one expert told BusinessWeek. One avenue to skip the forthcoming face-off would have been if the directors’ appeal to rescind CMB’s liquidation was heard before the February 12 date. However, it is understood that High Court Judge, Mercy Garekwe has set the rescission hearing for March 7, after the dates set for the interrogation.
On Wednesday, attorney for the CMB directors, Gabriel Kanjabanga confirmed that his clients had received notices to appear before creditors next month.
He said the rescission application was still pending before Justice Garekwe. The CMB case involves the “disappearance” of hundreds of millions of pula invested by the Botswana Public Officers Pension Fund (BPOPF) and Bona Life. A statutory manager appointed by the Non-Bank Financial
Institutions Regulatory Authority (NBFIRA) published a report claiming the asset manager, under the guise of managing funds for the BPOPF and Bona Life, lost hundreds of millions of pula through bad investments, alleged fraud and personal enrichment, via a complex web of directorships and shady entities. The two entities alone are collectively seeking the return of more than P550 million. Other creditors include Lobatse Clay Works, Yarona FM, the Manual Workers Union, Grant Thornton, BIFM, Mascom, Botswana Telecommunications Corporation Limited and others who are collectively claiming more than P62 million.
The list of claims also includes First National Bank Botswana credit cards, bills from stationary providers, IT experts and the staff members who went for months without pay in the period towards CMB’s closure.
Directors in the matter have denied any wrongdoing and say all amounts were fairly invested in line with the agreements made with the pension fund and the life insurance firm.