Troubled BONA Life To Recover Its Assets

Mpho Mokwape | Monday November 26, 2018 14:35

On Friday Bona Life was granted a lifeline to recover its assets by the court after they launched an application to put the assets holder under liquidation. Gaborone High Court Judge, Justice Christopher Gabanagae granted the order to Bona Life for the winding up of its assets holder to recover its pensioners’ money in the sum of P66 million. The urgent application that was filed a few weeks ago was seeking for the provisional winding up of CMB Fund 1 as the insurance company tried to protect its assets from going under liquidation through asset manager, CMB. Bona Life is a sole creditor of CMB Fund 1, which its parent host is CMB. CMB, which is already under liquidation, is the asset manager for Bona Life and according to court documents CMB Fund 1 is indebted to them in the sum of P133,500,000 or alternatively P66,000,000. Before the order was granted, Bona Life through their advocate instructed by Pepsi Makgalemele argued that should CMB Fund 1 go under winding up under the parent host CMB it will lose its assets to fellow creditors despite being the sole creditor on the fund 1.

In that regard, Bona Life was petitioning court through their chairperson and director, Martin Dingake on grounds that CMB Fund 1 was unable to pay its debt.

Bona Life argued that should CMB Fund 1 not be placed, on an urgent basis, into the hands of a liquidator, the harm and prejudice that will inevitably follow will be irreversible. “Bona Life seeks to protect the interests of the pensioners and beneficiaries of life insurance policies, whose money was paid into the bank account of CMB Fund 1,” argued the insurer. The insurance company also submitted that unless a halt was brought to CMB Fund 1 on an urgent basis, there would be nothing left for the pensioners and the said beneficiaries.

Bona Life said they had been requesting CMB Fund 1 since a year ago to pay back the money, but failed to do so despite promising that the money was there.

“There is no proof whatsoever that the money is there, they have failed to pay since November 2017 and are still having to pay. Even so they have not provided any evidence either in a written affidavit that indeed the money is available,” protested Bona Life.

Further the insurance company has explained that CMB Fund 1 was unable to pay this debt meaning it was factually and commercially insolvent, as envisaged in section 368 (c) of the Companies Act.

On the other hand CMB Fund 1 refused with Bona Life money saying the assets are safe and secure.

Through their advocate instructed by Gabriel Kanjabanga, they said there is no need for liquidation or urgency because pensioners need not worry, as their money was secure and that there was no danger to it. “We have never refused to return the assets, but we have assured Bona Life that everything was in order and that the assets are secure.”

Meanwhile, at the backdrop of the sour relationship between the parties is a complex matter. CMB Fund 1 was designed to protect the assets that are acquired on behalf of Bona Life.

This means that it was designed as a special purpose vehicle (spv) which in the event that either CMB on CMB Fund 1 were liquidated, the ownership of the assets would remain with Bona Life.

Accordingly the contractual agreement was that CMB as the parent host of CMB Fund 1 would acquire assets on behalf of Bona Life as its asset manager, of which the assets would be housed and registered in the name of the spv, CMB Fund 1, to be registered and utilised for the sole benefit of Bona Life.

The case is set for February 19, 2019 for confirmation of the winding up order.