NBFIRA Wins Round 2 In P477m Row
Mbongeni Mguni | Monday February 5, 2018 12:15
This followed after the High Court reinstated the authority’s decision to freeze the firm’s accounts and hand its operations over to a statutory manager.
Capital Management Botswana (CMB) is involved in an acrimonious dispute with the Botswana Public Officers Pension Fund (BPOPF), which is demanding the return of about P477 million of its assets handed over to the firm from 2014 for investment. The pension fund, which accuses CMB of several contract violations, lost a legal challenge against CMB late December, with the court ordering the parties to go for arbitration.
BPOPF and another complainant, Bona Life, took their grievances to NBFIRA, leading the regulator to place CMB under statutory management last Tuesday. On Thursday, CMB secured a court decision overthrowing NBFIRA’s decision, leading to Friday’s late afternoon showdown before Judge Omphemetse Motumise.
In a ruling after several hours of arguments, Motumise ordered the return of CMB to statutory management, which involves the freezing of its accounts and granting of all powers to statutory manager, Peter Collins of Collins Chilisa. The order will be in place until the matter is heard in full on Thursday. BPOPF’s attempt to join the case was thrown out with costs on the grounds that the pension fund failed to show urgency.
Appearing for NBFIRA, Sipho Ziga argued that the Thursday order was erroneously sought by CMB, adding that his clients had not been provided with enough time to respond.
“A judge may rescind an order without notice to any party involved if he finds it was erroneously sought or granted.
They did not even make a phone call to inform us about the set down time as per the procedure. They did not even disclose to this court that there was another matter in Lobatse coming up on Monday, which will make a determination on the same issue,” he argued.
In Lobatse on Monday, Justice Modiri Letsididi will hear a case in which NBFIRA wants the High Court to make the appointment of Collins and freezing of accounts endorsed by court.
Ziga said if the court would not rescind the order, it would bring the judiciary into disrepute, as there were clear irregularities such as failure by CMB attorneys to issue them notice of set down timely.
“They served us at 12:06, while service was effected at 09:19, three hours later. Yesterday’s order cannot stand as there was no proper application and service, this would challenge the integrity of the judiciary,” he said. Representing CMB, Gabriel Kanjabanga attempted to have the application thrown off arguing that NBFIRA had failed to demonstrate urgency of the matter. “They are talking of the probability that the funds could be displaced.
They say the funds could be taken to South Africa. These are unfounded and should not stand,” he said. Kanjabanga said Ziga had not provided the certificate of urgency and the case could not be heard.
Kanjabanga said he only knew about the matter in Lobatse shortly before the Thursday case and was not given time to write an affidavit demonstrating why he had gotten to know about the case late.
He argued that NBFIRA could wait for the return date instead of approaching court on urgency. According to Motumise’s order, the matter will be heard on February 8, 2018, with CMB to file responding papers and affidavits on February 4, 2018. BPOPF are then to file their response if any on February 6, 2018. Heads of argument are then to be filed on February 7, 2018.
Should NBFIRA succeed, the statutory manager would begin examining CMB’s books looking for evidence of suspicious transactions and other activities.
The section of the Securities Act cited by NBFIRA in placing CMB under management, deals with suspicion of criminal behaviour, insolvency or non-compliance with a financial law on the part of an asset manager.
Should CMB prevail, the firm would continue arbitration proceedings with the BPOPF, a process that pension fund officials say would take far too long for pensioners’ interests.