• Millions in taxpayer, pensioner money transferred out of Botswana
  • Local commercial banks implicated in transacting misappropriated funds
  • Millions lost while Regulators, BoB and NBFIRA watched
  • MPs want tight laws against looters

Gazette Reporter

Members of Parliament (MPs) are furious over what they claim is the ineptitude of the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) and the Bank of Botswana (BoB) in fulfilling their mandate to prevent the illicit flow of money derived from criminal activities from Botswana. Parliament heard accusations levelled against the crime prevention agencies, who are accused of having slept on the job while asset managers looted and channelled money with the facilitation of commercial banks as millions of pensioners money went to offshore accounts in secrecy jurisdictions.

NBFIRA regulates activities of all asset management companies, private equity firms, insurance companies, micro lenders and all other non-bank financial institutions. Before allowing such to operate they are required to be licensed by NBFIRA and all their actions ought to be monitored by the authority. NBFIRA has under its fold, more than 24 licensed insurance companies. There are also 53 licensed insurance brokerage companies, all of which have their compliance requirements enforced by the NBFIRA.

Bank of Botswana licenses and oversees commercial banks as well as monitors and supervises their activities and transactions. Legislators are however of the view that the mandate and the model of operation by the regulators should be reviewed, and efforts should be undertaken to ensure that they are diligently complying with their mandates. MP for Francistown East Buti Billy said that NBFIRA’s mandate and the way the authority functions should be reviewed to establish whether or not the authority fulfilling its mandate.

“Why would people take millions from pensioners here in Botswana and be able to transfer the money out of the country without any alarm, especially from the regulators?” MP Billy asked, further adding that it is the duty of the NBFIRA to ensure that money belonging to pensioners or insurance funds do not just get to be illegally transferred offshore.

“Why would commercial banks just move these filthy millions out of Botswana when the Bank of Botswana is there as the regulator? It should not be easy for money worth P1 million or more to be easily transferred out of Botswana without scrutiny to ensure that the money is not stolen,” he said.

According to the clearly aggrieved MP, questions should be asked to establish the source of the money, its destination and the purpose for transferring such huge sums of money.

Two significant asset management institutions monitored by NBFIRA had disputes with the BPOPF.

Kgori Capital (pty) Ltd which used to manage over P3.9 billion in BPOPF assets was terminated by the fund for alleged improper internal control, when its former Managing Director (MD) Bakang Seretse became accused of misappropriation of proceeds from the National Petroleum Fund’s (NPF) in the region of P250 million. According to the allegations filed in Court, the funds are said to have been sourced under the guise that they would be used for the construction of fuel storage tanks for the Directorate of Intelligence and Security (DISS), yet the money was transferred to Israel for procurement of arms.

Seretse is currently facing money laundering charges in court. Capital Management Botswana (CMB) is currently being liquidated after it was found to have misappropriated half a billion in pension funds money. CMB mastermind, Tim Marsland is nowhere to be found. Marsland was in partnership with local partner, Rapula Okaile. Their company was awarded an P880 million private equity fund by the Botswana Public Officers Pension Fund (BPOPF). A fund called Botswana Opportunities Partnership (BOP) was created; CMB was the General partner while BPOPF was the limited partner. Transactions were done under the BOP which was managed by the BOP. At least P480 million was misused under the unsuspecting eyes of the regulator, NBFIRA.

In seeking to defend its position, NBFIRA has claimed on record, that that it inspects asset managers through off-site monitoring, which is the periodic financial information it receives from licensed entities such as asset and fund managers (monthly/quarterly and annually). It has further revealed that it does on-site monitoring, which involves carrying out several types of inspections, e.g.: planned, spot, ad-hoc, and thematic inspections, including regulatory meetings scheduled upon entities requests as well as scheduled bilateral meetings by the Authority.

It currently remains unknown how so much money from the NPF fund and the CMB scandal were squandered under the watch of NBFIRA, which is mandated by legislation to conduct periodic audits, inspections on the financials and activities of institutions that it regulates with no alarms raised or action taken.

Asset managers like CMB and its directors are vetted by NBFIRA, meaning that NBFIRA is to act as a guardian not only on the companies entrusted with the public purse but on their individuals’ dealings.

Francistown East MP Ignatious Moswaane expressed his concern that while millions have been stolen, a lot of time is wasted in unending investigations. He said post the investigations, court cases would also drag for too long, while the money that was stolen could be used to either develop the economy or benefit its rightful owners. “Some of these cases drag up to six years. We need to find alternative ways to deal with individuals or companies that have been found to have looted public money. In some cases we would know that the money is yet to be spent and that it can be recuperated. We also need to blacklist any individual or company that is found to have looted public funds or involved in shady transactions,” Moswaane said.

Billy Buti went on to add that assets belonging to such companies or individuals should be repossessed and sold to recoup the stolen funds. Buti further said government should establish a legal instrument that compels managed funds to be invested in Botswana instead of off shore. He said the money could be invested in public roads, infrastructure as well as in retail developments to create jobs and stimulate the economy, because when the money goes offshore it would be used to develop the western economies anyway.

Pension funds invest 70 percent of their money offshore while only 30 percent remains in Botswana. BPOPF manages over P65 billion while Debswana Pension Fund has over P7 billion in assets under management.

Buti argued that through prudent, careful and effective regulations at commercial banks, it would be easy for government to establish where monies like the Plastic Levy and Tourism Levy went. “Someone has to account for all these levies which could be used to develop the country,” he charged. Buti claimed that with a P7 billion deficit in the national budget, Botswana could be using money that accumulated over the years in Plastic Levy, Tourism Levy and even the Alcohol levy to make up for the budget shortfalls.

Former Minister of Tourism, Tshekedi Khama was quoted previously saying that ‘re jelwe’ when asked about the whereabouts of the Plastic Levy and whether the money will be traced or not.