�BCL killed deliberately�

Pini Bothoko | Tuesday July 25, 2017 16:09

“I believe that BCL was killed deliberately for whatever reason, but where is the smoking gun? There is a piece of incontrovertible incriminating evidence in all this? The decision by the government to take P1 billion from BCL in 2014 is the smoking gun! The choice needs to be seen in the context of the agreements in place between the government and BCL over 50 years,” Keorapetse said.

He stated that from the start there was a strong developmental role for the company identified by government and from the onset, the government has been the custodian of BCL’s financial security.

He said BCL was never formally a parastatal or a public enterprise in the sense of making huge profits to pay dividends and contribute to boosting government revenue.

He said even when there were significant private sector shareholders in the early years, the government structured BCL in such a way to set it up as a recipient of government funds or funds raised by the government indirectly for BCL from multilateral and bilateral financial partners.

“The company was never set up as a normal commercial enterprise, with the flexibility necessary to be able to raise other money and determine its own financial fate. It was an immensely complicated financial structuring, enshrining BCL as a unique entity, and a bulwark of the country’s economy.

He said in exchange for the implicit and explicit backing of government, they (the government) never showed any intention other than to roll over BCL’s debts to the state and BCL became dedicated to providing a functioning operation that provided 5,000 jobs.

He added: “From 2002 onwards, government increased its influence to complete control and ownership of the company, which crystallised with 100% control in 2008 after the departure of all external funders”.

He stated that in the years that metal prices were high BCL managed to build up some cash. He added that in the days when there was more private sector influence at BCL, the proceeds from the good times were used to invest in the company.

Keorapetse said it is important to be noted that contrary to popular perception, BCL was in fact not given any money by government from 2002 onwards as all debt dated before then. He said the company had not been an active drain on the fiscal for 14 years when it was put into liquidation in 2016. “By 2014, after the preceding price boom years, BCL built up its cash reserves. It should have been allowed to use this money to invest in the business, for the inevitable downturn in prices like it had before,” he said.

Kebonang had told Parliament that the financials of BCL Group had not improved in spite of cash injection of up to $100 million in April 2016. He added that at the time of provisional liquidation, projections by management were that by March 2017, a further P2 billion cash injection would become necessary in order to continue the operations.

He said this when commenting on the statement on the provisional liquidation of BCL and its subsidiaries by the Minister of Minerals Resources, Green Technology and Energy Security, Sadique Kebonang in Parliament yesterday.“I believe that BCL was killed deliberately for whatever reason, but where is the smoking gun? There is a piece of incontrovertible incriminating evidence in all this?

The decision by the government to take P1 billion from BCL in 2014 is the smoking gun! The choice needs to be seen in the context of the agreements in place between the government and BCL over 50 years,” Keorapetse said.He stated that from the start there was a strong developmental role for the company identified by government and from the onset, the government has been the custodian of BCL’s financial security.

He said BCL was never formally a parastatal or a public enterprise in the sense of making huge profits to pay dividends and contribute to boosting government revenue. He said even when there were significant private sector shareholders in the early years, the government structured BCL in such a way to set it up as a recipient of government funds or funds raised by the government indirectly for BCL from multilateral and bilateral financial partners.

“The company was never set up as a normal commercial enterprise, with the flexibility necessary to be able to raise other money and determine its own financial fate.

It was an immensely complicated financial structuring, enshrining BCL as a unique entity, and a bulwark of the country’s economy.He said in exchange for the implicit and explicit backing of government, they (the government) never showed any intention other than to roll over BCL’s debts to the state and BCL became dedicated to providing a functioning operation that provided 5,000 jobs.

“The debts were more akin to grants, thus entrenching the reality in the minds of the company, the government and Botswana citizens that BCL occupied a special, protected place in the Botswana economy,” Keorapetse said.He added: “From 2002 onwards, government increased its influence to complete control and ownership of the company, which crystallised with 100% control in 2008 after the departure of all external funders”.He stated that in the years that metal prices were high BCL managed to build up some cash.

He added that in the days when there was more private sector influence at BCL, the proceeds from the good times were used to invest in the company.Keorapetse said it is important to be noted that contrary to popular perception, BCL was in fact not given any money by government from 2002 onwards as all debt dated before then. He said the company had not been an active drain on the fiscal for 14 years when it was put into liquidation in 2016. “By 2014, after the preceding price boom years, BCL built up its cash reserves.

It should have been allowed to use this money to invest in the business, for the inevitable downturn in prices like it had before,” he said.Kebonang had told Parliament that the financials of BCL Group had not improved in spite of cash injection of up to $100 million in April 2016.

He added that at the time of provisional liquidation, projections by management were that by March 2017, a further P2 billion cash injection would become necessary in order to continue the operations.