Soldiers in the corporate world: General Masire in stock market conflicts
When the BSE, started asking questions about improper operations of the leading stock brokering firm, Stockbrokers Botswana (SBB), General Masire was aware of the probe, since he chairs both BSE and SBB boards of directors. This virtually means he was a player and referee, asking questions and answering them at the same time. This constitutes a clear conflict of interest.
When Botswana Stock Exchange (BSE) took a decision to suspend Stockbrokers Botswana (SBB) from trading on behalf of investors, General Tebogo Carter Masire, was the board chairman of both the BSE and the SBB.
This means as BSE chairperson he may have been involved in the decision to suspend SBB after it failed to adhere to statutory requirements. The Botswana Gazette argues that aside from being in an unethical situation, Masire also presided over SBB as it was run straight to the ground.
As SBB chairman, Masire is responsible for appointing executive managers like the CEO or Managing Director (MD), who by virtue of their seniority report to the board. Documents seen by this publication show that the Non Bank Financial Institutions Regulatory Authority (NBFIRA) wrote SBB on the 29th June, fining it P50 000 for contravening Section 65 (6) of the NBFIRA Act. The regulator took this decision in concert with the Masire chaired BSE.
NBFIRA’s probe of SBB operations uncovered rot; rot which will have happened right under Masire’s nose as SBB board chair. An inspection carried out by NBFIRA’s Deputy Director-Capital Markets, Kuki Kowa-Mphuting also found that the Masire chaired board was not autonomous; of its 5 members, 4 were members of Charles Tibone’s family which owns the business, Masire was the only independent member.
The same board, according to the findings, also contravened Rule 4 (b) of the Securities Business Corporate Governance Rules which require meetings to be held under every four months. Available records show that Masire and his fellow directors only met three times during the inspection date of the 16th of May and the beginning of 2015.
Masire ought to have known about the NBFIRA requirements in question because as SBB board chair, it is his job to call meetings. As it stands, it appears then that as executive management figure head, Masire somehow allowed SBB to operate without a proper organizational structure. SBB Managing Director (MD) Titose Tibone, for instance, operated without a job description or an employment contract, all of which are supposed to be drawn by the board which Masire chairs.
Another problem concerns the CEO, Oosi Lemo, who reports to Titose instead of the board as NBFIRA discovered. Kowa-Mophuting argued that in order to minimize conflicts of interests, any letters and agreements addressed to the MD must be signed by Masire as board chair, instead of the MD himself. This is after it appeared that the MD could write a letter, making major decision, and only addressing himself instead of the board.
It was also found that Gajendran Srikanthi, who has since resigned, performed duties of a Finance Manager while she was an Accountant. Titose, who did not have an employment contract, then hired one Nozizwe Rebaone as an accountant who herself performed duties of a Finance Manager. Rebaone as an accountant was supposed to have been vetted by the NBFIRA before performing the duties of a Finance Manager, which included authorizing transactions and being a signatory to SBB accounts. It however appears that she was erroneously given these powers by Masire on 22nd December 2015 in a form he signed authorizing them. That form was also signed by other board members.
Masire has since failed to respond to questions addressed to him by this publication, in which it was sought to establish if he accepted that by chairing the BSE which regulates SBB, which he also chairs, he was conflicted. Another question was why SBB failed to follow proper statutory requirements in the presence of a board. His only comment was that he could not comment on the matter as SBB was still under statutory management. Charles Tibone also did not respond, citing the same reasons.
Masire’s numerous board roles fell on him immediately after he retired from the Botswana Defense Force (BDF) on 31st July 2012 after 5 years as Commander following an overall 35 year career . He is also Board Chair at Air Botswana, a parastatal currently under great scrutiny following huge losses and bad corporate governance practises for which former Transport Minister, Tshenolo Mabeo and his Permanent Secretary Neil Fitt were criticized by parliament.
Masire, who is a graduate of the US Air Force Command and Staff College and the Naval Postgraduate School, also sits on the Botswana Insurance Holdings Limited board, the most diversified and perhaps largest financial services group.
The conflict involving SBB was established at the start of September by BSE CEO, Thapelo Tsheole, who suspended it from trading on behalf of investors. This suspension happened under Masire’s board chairmanship of SBB after he assumed the role three months before. When he assumed this role, Masire was also BSE board chair.
Aside from the precarious position he now finds himself in, in the corporate world, Masire has had a distinguished military career, and will go down in history as having been the first BDF commander to induct first female officers. He has under his belt 4000 flying hours and was among his many achievements a founding member of the Civil Aviation Authority of Botswana. He is currently an Advisory Board member of the African Armed Forces journal.
He holds an MBA from the University of Southern Queensland, Australia.