- Morupisi’s Board recommends termination of Kgori Capital
- Allan Gray Botswana and African Alliance Botswana to benefit
- BPOPF wants to protect 3.9 billion Pula under Kgori Capital
Beleaguered former Kgori Capital Managing Director Bakang Seretse has questioned the impartiality of Carter Morupisi, the Permanent Secretary to the President, over his ability to make decisions which may impact on the company. The ongoing saga has seen Botswana Public Officers Pension Fund (BPOPF) terminate the services of the investment management company Seretse used to lead.
Announcing his resignation as Managing Director of Kgori Capital on December 11, 2017, Seretse informed the company’s clients of his resignation and explained how he became entwined in transactions on behalf of a government agency (the Directorate of Intelligence and Security Services), which has led to allegations and a charge of money laundering before the Regional Magistrate Court.
Now, The Botswana Gazette is in possession of another letter Seretse purportedly wrote to BPOPF informing the pension fund that he ‘has been made aware’ of BPOPF Chairman Carter Morupisi’s ‘conflict of interest.’
‘‘On an unrelated but equally important matter; we have in the past been advised by Mr (names withheld) that the Chairman of the Fund has a beneficial interest through a senior official at CMB Capital and that he has held several meetings with them,’’ reads part of the letter. He further indicates that while they (Kgori Capital) cannot independently vouch for the allegations, they thought it important to ‘‘bring it to your attention to avoid issues of potential conflict of interest’’.
Seretse however emphasised that in their past dealings with Morupisi ‘‘he has always been beyond reproach.’’ CMB Capital is a rival to Kgori Capital in the asset management business.
Morupisi has since denied any relationship with CMB Capital despite the allegations.
Seretse’s resignation from Kgori Capital, however, may have come too late to save the asset management company from suffering the consequence of his alleged involvement in money laundering. This publication has seen minutes purported to have come from the BPOPF Risk Committee meeting where a decision was taken to terminate the services of Kgori Capital. ‘‘Given the gravity of the charge (money laundering) on (sic) Bakang Seretse, the corporate governance gaps such as non-disclosure of conflicts of interests, violation of the agreement by not declaring additional gains through the Fund’s investment, weak operational environment such as paying client funds into related parties accounts (i.e. National Petroleum Funds into Khulaco), it is recommended that we terminate portfolio management contract with Kgori Capital,’’ reads part of the recommendations from the board meeting.
The BPOPF portfolio under management at Kgori Capital is estimated to be between 3.9 to 4.3 billion Pula, being the local equities, local fixed income and local cash. The board recommended that the portfolio be temporarily housed with Allan Gray Botswana and African Alliance Botswana. The equity portfolio, according to the recommendations, is to be managed by Allan Gray Botswana while fixed income portfolio is to be managed by African Alliance Botswana. The cash portfolio will be managed in-house at BPOPF.
The BPOPF Risk Committee minutes reveal that the other two BPOPF managers (BIFM and Investec) have ‘‘suffered losses of their investment teams and hence not considered for the temporary housing of assets’’.
The biggest labour movement in the country, BOFEPUSU, have voiced their concern over the allegations of money laundering levelled against Seretse and companies under his control. In a statement released last week, BOFEPUSU noted that while they recognize that the courts will ultimately determine the innocence or guilt of those accused of the misuse of public funds, the federation will however closely watch the developments with keen interest to ensure that all those involved are taken to task. ‘‘We are gravely concerned about allegations of financial flows between Bakang Seretse, Kgori Capital, Basis Points and organs of the state which involve funds that belong to public servants, in particular valuable pension funds at Botswana Public Officers Pensions Fund,’’ reads part of the statement from BOFEPUSU.