Audit of CEDA�S P200m Venture Fund complete
Pauline Dikuelo | Friday June 23, 2017 18:00
Addressing the media this week, Thamane said they had to conduct an audit on the CVCF following the end of its 10-year lifespan to review the activities of the Fund since inception.
“We indicated that we wanted to do an audit because initially there was an agreement that CEDA was supposed to take 49% stake in each investment, but there were times where the Fund would go beyond that which then forced us to consolidate them to CEDA structures,” he said.
According to Thamane, this has however delayed the Agency’s financials as they are waiting for the results of the audit. CEDA has for the past four years failed to produce their consolidated financial results due to pending results of the Fund’s report.
Under a 10-year deal, VPB was in 2003 tasked to manage the P200 million funds and invest in different economic sectors through either debt or equity.
At the end of the 10-year lifespan of the Fund, some of the companies invested in had been liquidated, while the fund managers had managed to exit some of the investments.
Some of the companies in the CVCF portfolio included Delta Dairies (liquidated), AON Botswana, PG Timbers, Mabule Breweries, Airway Express, ZS Botswana, Builders Merchants Botswana, Tannery Industries Botswana (liquidated) and Biz Capital. The minimum amount for investment under the fund was P500,000 with a ceiling of P30 million.
Earlier this year, CEDA indicated that it was at the tail end of divesting from all companies that were held under the Venture Capital Fund. The Agency indicated that they currently have three companies left at various stages of their business cycles.
Initially, the CVCF had targeted a 23% rate of return on investments. An external audit carried-out by PricewaterhouseCoopers (PwC) Botswana for the year ended March 2014, also questioned the CVCF’s decision to provide interest-free convertible loans to collapsed Delta Dairies when CEDA’s investment guidelines stipulate that financial assistance should be provided at subsidised rates.
PwC also queried the decision to take up a 94% stake valued at over P100 million in the dairy company when the guidelines only allow maximum investment of P30 million in a single entity.
According to the Auditor General’s report for the year ending March 2016, CEDA’s accounts for the financial year were not ready for submission as the audit was still in progress.
“I have, therefore not been able to include my comments on the accounts of the Agency for the year under review in this report,” said the Auditor General.