- Statutory Manager applied for CMB liquidation
- BPOPF could recover some assets
- P230 million missing
• Bona Life could re-open soon
- BPOPF could inherit CMB stake in Bona Life
The fortunes of life insurer, Bona Life Insurance (BLI) could finally take a turn for the better with troubled private equity firm, Capital Management Botswana (CMB) now facing liquidation.
According to Chief Executive Officer (CEO) Regina Sikalesele-Vaka, regulator Non-Bank Financial Institutions Regulatory Authority (NBFIRA) has allowed the life insurer to continue taking premiums from existing clients, and to also payout claims, but they are temporarily restricted from taking in new business pending the finalization of the CMB matter.
Sikalesele-Vaka added that Bona Life is currently appointing a new board of directors to redefine the company’s structures and render its complaint with NBFIRA statutory requirements which could see the regulator permitting Bona Life to fully operate and acquire new business.
The Bona Life board of directors became dysfunctional after the fall out between the CEO Sikalesele-Vaka, and CMB directors. CMB, a company which is 75 percent owned by South African Tim Marsland and Rapula Okaile (25 percent), has been at the centre of Bona Life’s continued woes.
CMB directors claimed that the relationship between Sikalesele-Vaka and themselves had irretrievably broken down, and they attempted to terminate Sikalesele-Vaka’s employment at Bona Life, albeit unsuccessfully. CMB wanted to use its ‘controlling stake’ to oust Sikalesele-Vaka but the hostile takeover failed due to unlawful action when the directors dismissed her without first acquiring the necessary board resolution. Furthermore, she was never called for a disciplinary hearing by the board.
The controversial private equity firm used the money it acquired from the Botswana Public Officers Pension Fund (BPOPF) to buy shares in Bona Life. CMB was allocated P830 million (of which P447 million was spent so far) to manage under Botswana Opportunities Partnership (BOP), a private equity fund in which CMB was to be a General Partner while BPOPF was a Limited Partner.
Bona Life’s origins began as Bramer Life, a troubled insurer rescued by CMB to the tune of P50 million. Under a new structure Sikalesele-Vaka directly owned 25 percent, the BOP 40 percent, CMB 25 percent and the remaining 10 percent was owned by staff. The company re-branded to the citizen controlled Bona Life. Late last year, CMB was accused of irregular financial dealings using BPOPF funds. When the Fund refused to honour CMB’s capital call in November 2017, the company purportedly sold the BOP assets (after P447 million was drawn down), declared BPOPF a defaulting partner and only paid back P50 million to the fund as a settlement fee. CMB then decided to transfer the 40 percent stake in Bona Life previously owned by the BOP into CMB, and claimed that CMB had a controlling stake of 65 percent in Bona Life.
The gripe between CMB and Bona Life emerged during the tussle between BPOPF and CMB. At one point Sikalesele-Vaka wrote to the Directorate of Corruption and Economic Crime (DCEC) accusing CMB of irregular financial dealings, detailing her concern that its assets worth P133 million, held by CMB, were unsafe.
Asked how the liquidation will affect Bona Life since a 65 percent stake in Bona Life Sikalesele-Vaka said while most of the details were known by the provisional liquidator, process dictates that the 65 percent shares linked to CMB should be taken away from the said company. According to other sources, the liquidation of CMB is driven by the need to recover the missing hundreds of millions belonging to pensioners. They further suggest that since the stake in Bona Life was acquired using pensioner funds, it is only right that the 65 percent stake under the fold of CMB be transferred to BPOPF ownership. If the shares are transferred to BPOPF the fund will have a controlling stake, Sikalesele-Vaka will retain her 25 percent and the Bona Life staff will also hold on to their 10 percent.
The sources believe that BPOPF will then have to pump in more money to re-capitalize Bona Life. The company needs a P200 million lifeline.