The board of local property group, Letlole la Rona, has suspended its CEO, Chikuni Shenjere-Mutiswa for possible misconduct involving the group's long-term incentive plan.
According to Investopedia, a long-term incentive plan is a company policy that rewards employees for reaching specific goals that lead to increased shareholder value. In a typical policy, the employee, usually an executive, must fulfill various conditions or requirements.
In a notice to investors earlier today, the group, which boasts properties last valued at about P819 million mainly in the industrial and retail sectors, said the CEO’s suspension was with immediate effect.
“The suspension follows preliminary findings arising from an investigation into issues relating to the company’s long-term incentive plan,” the directors said.
“Mr Shenjere-Mutiswa’s suspension is with full benefits, pending the outcome of further and full investigations.
“The ambit of the investigation extends to the review of all relevant company policies and the board will update the market on additional findings as and when appropriate.”
Letlole chair, Boitumelo Mogopa said the alleged acts of misconduct relate to events around March this year.
“The preliminary findings of possible misconduct arising from the investigation relate to circumstances around the company’s Long-term Incentive Plan during or around March this year and possible acts or omissions by an individual in a unique position of power.
“It by no means reflects the integrity of the board,
“For us it remains business as usual as due process takes its course,” she said.
In March, Letlole finalised the acquisition of six industrial assets in Gaborone, Phakalane and Lobatse for P174.4 million. The assets were acquired from Western Industrial Estate, a company related to LLR via the common shareholding by state investment agency, the Botswana Development Corporation (BDC). The BDC holds 45.3% equity in Letlole la Rona and 100% equity in Western Industrial Estate, which develops and manages industrial properties.
At the time, Letlole said the deal would be funded off its own balance sheet, which was boosted by P235 million in proceeds from the sale of hotels to another related company, Cresta Marakanelo.
Commenting on the deal at the time, LLR directors said the industrial properties would grow its presence in the industrial rental sector and offer an attractive initial net yield of 9%, “thus enhancing shareholder value in a real estate market where securing investment grade properties is challenging”.
Letlole directors said Botshelo Mokotedi, the head of risk at BDC, had been seconded with immediate effect to hold the fort as acting CEO while the board completes its investigation.