NBIFRA left clutching air in P400m row
Mbongeni Mguni | Friday February 9, 2018 12:41
NBFIRA, responding in part to complaints by the Botswana Public Officers Pension Fund (BPOPF) over a P400 million dispute with CMB, last Wednesday placed the private equity firm under statutory management and appointed veteran attorney and former High Court judge, Peter Collins as statutory manager. The statutory order included the freezing of CMB’s accounts and takeover of all affairs.
CMB, which at some point managed P477 million of BPOPF funds, successfully challenged the move last Thursday before Justice Omphemetse Motumise at the High Court.
Hardly 12 hours after this however, NBFIRA secured the reinstatement of the order late Friday evening before the same judge, who agreed with the Authority’s lawyers that they had not been given enough time to respond on Thursday.
Information reaching Mmegi indicates that on Monday, when Collins set about his duties as statutory manager, he found that funds in CMB’s account had been cleared out on February 1, the day that the private equity firm won the initial order against statutory management.
“At about noon today, Monday February 5, I had a meeting with senior personnel of First National Bank where first respondent (CMB) holds its banking accounts. These accounts are linked to a general banking profile for CMB so that the funds are easily transferred through online banking between these accounts.
“I can confirm that on Thursday 1 February, during the period that the first order by Motumise J was extant, an amount of P10 million was transferred from a subsidiary account of first respondent to the latter’s parent company account.
“The result of the transaction means that there is virtually no money left in any of these accounts, certainly nothing of substance,” Collins wrote in an affidavit to the High Court.
The development is the latest in a bitter dispute between CMB and the BPOPF, which dragged all the way to the High Court last December where the pension fund lost and was ordered to undertake arbitration with the private equity firm.
For months last year, the BPOPF had been pressing CMB to return its funds, after cancelling a 2014 contract. The pension fund said CMB had frequently violated the terms of the contract.
BPOPF tried and failed to join the ongoing case by NBFIRA against CMB. Another firm, Bona Life, has also filed complaints with NBFIRA against CMB.
Yesterday, CMB’s lawyer, Gabriel Kanjabanga told Mmegi his clients had not done anything improper.
“Even if there was a transfer, what’s wrong with that? It is their account and they can transfer wherever they want to. They did not do anything wrong or illegal. If you have an account and you transfer your money and that money is not stolen, what’s the problem?
“We will be filing our responses on the dates that we had agreed with their lawyers ahead and we will also respond to that affidavit.
“In the meantime, there are no duties for the statutory manager to perform. His appointment has been challenged in court on a number of grounds. The statutory manager has to wait for the outcome of the court proceedings.
“He wants to defeat the purpose of the application, but he cannot continue as if nothing has happened.
“We are saying when the (order for) statutory management was done, our client was not consulted and we are saying, even the statutory manager is conflicted.
“There are court proceedings going on, so how can he claim that he is the statutory manager, when his appointment is the subject of court proceedings,” Kanjabanga said. On Monday, Collins announced he had commenced his duties, which Mmegi is informed include a search for “suspicious transactions” on CMB’s books.
By law, NBFIRA is entitled to appoint a statutory manager if it appears any institution “is involved in a financial crime, is of unsound financial position or is not complying with a financial services law”.
According to the Securities Act, the statutory manager is appointed to run the institution to “the exclusion of directors and other managers”. The statutory manager also reports to NBFIRA on investigations and progress towards regularising the institution.