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Court slaps BBSL, board with punitive costs for 'deplorable' conduct

BBS Limited (BBSL) and its former board members have been slapped with punitive costs against one of its shareholders for what the Court described as deplorable conduct.

The company and the board were dragged to Court by one shareholder, Pusetso Morapedi who sued the company’s board following a public legal spat between the management and board members.

The shareholder’s argument was that the board withheld crucial information forcing her to seek relief from Court among others being preventing the board of directors from extending their tenure.

However, by the time the matter reached Court, most of the issues raised already dealt with as disclosed by the board in their opposing papers and the applicant in her replying papers resulting in the application being withdrawn.

The only bone of contention that the parties argued before Court was the issue of costs. Lobatse High Court Judge, Mercy Garekwe ruling on the issue of costs said she found the conduct of the board members most deplorable and dishonest and that the Court had to mark its displeasure against such conduct.

“I note that the applicant has simply asked for costs of suits. This matter however is deserving of imposition of a punitive costs penalty for the reasons advanced. The costs of the application are granted in favour of the applicant and as against the respondents on the scale of attorney and own client,” she said. Garekwe explained that the conduct of the board members was most deplorable and dishonest because it would have saved the Court’s time had the board disclosed the resolution of the April 15, 2021 at the earliest possible time, which could have resulted in the non-filling of the urgent application of same at an early stage.

She pointed out that most importantly, the parties would not have appeared at court to argue the matter, more so the issue of costs in the backdrop of the pertinent facts brought to the attention of the Court at a very late stage.

“Not only did the board fail to immediately communicate to the shareholders and the public at large the crucial information but failed to advise the applicant upon being served with an urgent application,” she said.

The Judge further explained that moreover without any reasonable justification, the board knowing the resolutions taken since April 2021 were no longer valid communicated with the applicant and falsely confirmed the existence of such resolutions.

She noted that the false communication from the board came from the contents of their letter of April 18 where they gave an assurance that they would not implement resolutions of April 1, when at that stage they had already rescinded the very resolutions they were making assurances in respect of.

“I cannot fathom nor

trivialise the dishonesty. It was blatant and the only intent I can deduce from such conduct was to place the opponent at a disadvantage and make her operate in the dark,” she said. The Judge further said if there was any justification for the board’s failure to immediately communicate the resolution, which was very paramount, they had no excuse for failing to so communicate upon service on them of the urgent application.

She said the board did call for the withdrawal of the application but failed to disclose the main reason why the application stood to be withdrawn and no explanation was given and that she was however not comfortable to rely purely on the assurances made by the board forcing her to seek a consent order made by the Court.

Morapedi who is also the director of Botswana Centre for Public Integrity a non-governmental organisation focused on governance, filed an urgent application premised on that she wanted to enforce her rights as a shareholder to participate in the appointment of the board of directors, whom she said she had lost faith in from extending their own tenure.

She explained that there was a lot of uncertainty and turbulence at the company, which has caused great anxiety for shareholders and that it had brought great concern as to whether it is managed properly. She said it was critical now more than ever for the shareholders to be allowed to exercise their constitutional and statutory right to elect directors of their choice at the AGM.

“A deferment of the election of directors will deprive the opportunity to vote on pertinent issues in connection with business of the company and furthermore definitively resolve the current impasse so that the business of the company resumes with no interruptions,” she said.

Morapedi pointed that she did not trust the current crop of board members to continue to properly run the affairs of the company because the manner in which they have handled the entire situation showed a blatant disregard for her rights and interests as a shareholder which the board was appointed to uphold, advance and protect.

She explained that the resolution taken by the board on April 1, was a demonstration of the board’s failure to prioritise her interests as a shareholder and that the public battle did not give confidence that the board was acting in her interest. Meanwhile, the board ceased existing following the last week Friday annual general meeting (AGM) held by the company. The company is currently waiting for a new board.




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