- BluThorn clients owed over P100m
- Clients money unpaid since December
- 2019Company has 26 active client
- P50m untraceable
Scandal-ridden investment firm, BluThorn Fund Management, is failing to pay over P100 million in matured investments to its clients because of unavailability of liquid funds, The Botswana Gazette has established.
The company was temporarily closed by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) in terms of Section 57 of the NBFIRA Act. This led to litigation which Bluthorn lost. It was subsequently placed under statutory management as per a letter written by the NBFIRA on the 2nd of April.
Peter Collins of Collins Chilisa Law Firm was then appointed the Statutory Manager effective March 2020.
BluThorn’s portfolio has assets under management (AUM) exceeding P220 million. The Botswana Gazette has independently established that some clients have not been paid their dues since December 2019, six months down the line. It emerges that the clients invested millions of pula in BluThorn under an arrangement that they would be paid some interest on their money monthly. This was the money which the clients used to pay operational costs.
One of the clients who spoke anonymously to this publication said the last payment his company received from BluThorn was in November last year. “For the past six months, BluThorn did not pay us,” said the client, an institutional investor. “This is the money we use for our operational costs. This has caused a serious disruption to our business.”
This publication, further inquired with Colllins, BluThorn Statutory Manager as legally appointed by the NBFIRA. He confirmed that clients have not been paid by BluThorn, owing to the company’s illiquidity. “I have traced approximately 26 active Clients/Investors. Of these 26 investments, 9 have matured (between January to April 2020) totalling approximately P100 million and these have not been paid/redeemed for lack of liquid funds. The previous management admits this,” Collins said in response to The Botswana Gazette questions.
Further, he said the balance of approximately 18 investments have maturity dates ranging from August 2020 to September 2024 and, apparently, total P107,852,299.70. “I am still investigating the other side of the equation versus the outward investments made with investors’ funds, he revealed. “It would appear (but I am not yet certain) that the invested funds were on-lent (or on-invested) to related parties: Prime Employee Benefits (Pty) Ltd (approximately P120 million), Bluthorn Procurement Solutions (Pty) Ltd (approximately P76 million) and Bluthorn Holdings (Pty) Ltd (approximately P20 million).”
“The destiny of these funds is still under investigation. Suffice to say that BFM’s inability to have sufficient liquid or near-liquid funds to pay some P100 million owing immediately to investors is ominous.”
Efforts to get an insight from Joseph Mosimane, CEO of BluThorn, were futile. He said his willingness to respond is made impossible by the fact that being under Statutory Management, all enquiries are directed to Collins, the Statutory Manager.
Red flags were raised after BluThorn failed to provide the NBFIRA with trails of over P48 million belonging to its clients, with some funds said to have been used to settle the company’s operating expenses.
In an inspection carried out by the Authority from 7 May 2019 to 14 May 2019, NBFIRA found that sums of P14. 9 million, P13.7 million and a further P19.6 million were moved to BluThorn associated companies. BluThorn failed to explain to NBFIRA where the money went and for what purpose. The total sum of unexplained money amounts to P48 176 349. One of the companies, Ecsponent Projects (Pty) Ltd, in which P14 915 000 was paid, is no longer in existence. The company was placed under statutory management by the regulator after what NBFIRA said was a refusal and or negligence and failure to furnish it with an explanation.