Plot thickens in P6bn Orphans, Destitute Fund Scandal

  • Director of Department of Social Protection resigns, shocks seniors
  • Morupisi downplays whistle-blowing report delivered to him
  • Gov’t finally retrieves “floating” P50 Million from controversial company


More skeletons are tumbling out of the closet in the P6 billion  Orphans, Destitute Persons and Community Homebased Care Beneficiaries Programme Fund scandal. The fund, which was designed to cushion and protect vulnerable and disadvantaged people against poverty is at the centre of a tender dispute which has revealed shocking allegations of financial impropriety.
The scandal has already claimed its first victim.  Ruth Radibe, the Director of the department responsible for the fund, has officially resigned.
Her boss, Minister Slumber Tsogwane confirmed the resignation to this publication, saying it was a retirement from civil service. However, sources refute the retirement story, instead alleging that Radibe’s resignation follows recent questioning by the Directorate on Corruption and Economic Crime (DCEC).
Central to the scandal is the controversial and crises-ridden US-listed firm Net1, which uses its subsidiaries to distribute social grants payments through questionable contracts with social services departments.
In South Africa, Net’s subsidiary Cash Paymaster Services (CPS) won the P10 billion tender to pay South African Social Security Agency (SASSA) grants in February 2012 but a rival bidder, AllPay, questioned the terms of the tender. In 2014, the Constitutional Court declared the contract invalid and ordered SASSA to start a new tender process. In Botswana,  Net1 owns Smartswitch which is currently facing a court case in which the Prisan Group- a rival bidder is among others questioning their current contract  with the Department of Social Protection. Court documents detail Prisan’s claim that after winning a renewed bid to disburse the Orphan fund the tender was cancelled under alleged dubious circumstances, “to allow for illegal contract extensions with Smart Switch”.
Recently a report was made to the Directorate on Corruption and Economic Crime (DCEC)  and the Directorate of Intelligence and Security Services (DIS) alleging that Net1’s Botswana partners are a conduit to enrich a select few by stealing from the poor and vulnerable.  Smartswitch Botswana has been providing the food coupon system service since 2007 and its contract expired on March 31, 2012,  but subsequently extended to 2016. To date the company is sitting on another contested extension, granted to them despite its renewal being officially awarded to the citizen-owned  Prisan. The tender was canceled under questionable circumstances prompting a court case which may leave more than 75 000 Orphans and destitute beneficiaries stranded.
Recently close to P50 Million belonging to government was retrieved from Smartswitch accounts.  In 2016, the assistant Minister of Local Government and Rural Development Botlogile Tshireletso told Parliament that “Some funds close to P50 million that were destined for beneficiaries’ accounts, under the management of  Smartswitch have not yet been utilized due to network connectivity issues.”
She further added, “My ministry is currently working with Smartswitch Botswana to come up with the best option to retrieve these funds and I have accordingly constituted a Task Team to work with Smartswitch Botswana on this matter,” she said . It is still not clear how the company experienced network connectivity problems for close to two years.
A highly placed source within the government enclave revealed that a very senior officer in the Office of the President is behind the mess alongside other government officials.
“There are now fears that some companies will wrestle this tender from Smartswitch and a sustainable plan has been made to cement it to its owners. The tender cancellation was just the beginning of the plot. This now is a lifetime deal for Smartswitch and those who are pushing it as well as those who own it,” alleged the source.
This publication’s investigations have revealed that the government has, through Botswana Post, bought 20% shares in Smartswitch which is 70% owned by Net1 and Capricorn investment Holdings.
The Gazette has it on good authority that a whistle-blower dossier was prepared and shared with the Permanent Secretary to the President, Carter Morupisi. When contacted on the matter, Morupisi said he is aware of the matter relating to Orphans, Destitute Persons and Community Homebased Care beneficiaries but added that the matter was referred to the Ministerial Tender Committee to resolve.
While he resigned as Net1 director in South Africa at the height of the SASSA controversy, Serge Pierre Belamat is still listed as a director in Smartswitch Botswana. Bank Gaborone, which is a shareholder in Smartswitch, has not responded to questions surround the the fund by time of press.
Net1 made R1-billion in profit from its unlawful contract with the South Africa Social Security Agency (SASSA), according to auditors KPMG and it is not yet known how much Smartswitch has made through these questionable contract expansions. So far P50 million has been questioned before Parliament. Net1 is not new to controversy and corruption allegations. In 2012, the company revealed  to shareholders that it was being investigated by the US Justice Department for alleged corrupt payments made to South African government officials.