DCEC to probe COSBOTS for Maladministration

Board members accused of sharing confidential info with outsiders

The Directorate on Corruption and Economic Crimes (DCEC) has been roped in to investigate allegations of maladministration at the Copyright Society of Botswana (COSBOTS), The Botswana Gazette has established.

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While DCEC was not in a position to confirm receipt of any report on COSBOTS Tuesday this week, a document leaked to this publication has fingered some of the society’s board members in allegations of corruption, misconduct and neglegence, among a host of other issues.

“Over the years, there have been instances where some directors on the Board of COSBOTS have failed to meet their fiduciary obligations to the company, these obligations encompassing the duty of care, the duty of loyalty and the duty of obedience,” says the document. “A few of these individual breaches have intermittently been brought to the attention of the Board by management. However, the Board has taken no remedial action against their colleagues in terms of these infractions.”

Sources say the report forms part of the inquiries about the organization’s reputation following the recent dismissal of its CEO, Lesego Selotate, The Botswana Gazette established. The CEO has taken the embattled institution to court for unfair dismissal.

In the leaked report, COSBOTS staff minutes allege breach of fiduciary obligations by its directors and attribute it to existing interpersonal relationships between the directors, making it hard to call each other out for unethical behaviour, unwise choices and other misgivings that affect the members and its governance. The report states that despite clear set out policies and procedures, the board has persistently taken no remedial action against their colleagues.

Other alleged violations in the report include failure to exercise business judgment by board members who use COSBOTS confidential information to further their personal interests. The report accuses some of the senior directors (names withheld) of dishonesty and conflict of interest. It also alleges “very many” instances where confidential board information has been leaked to outside parties without proper authority.

“The perpetrators of this misconduct are the directors themselves,” says the document. “These cases have been reported at Board meetings and some even recorded in board minutes. The directors have been brazen enough to even mention that they share this information with external parties in emails. Some members of COSBOTS have written letters to the company citing information that only people privy to board discussions and board documents would be in possession of.”

In one instance, the minutes allege that one senior board member pushed for the disciplinary action of the then CEO Lesego Selotate, accusing the latter of insubordination to the board following delayed procurement of palmtop computers.
The minutes allege that while the gadgets were supposed to be the company’s assets, this particular senior board member eventually took them for personal ownership indicating that it was the board’s decision. “The action of the Board as it related to the palmtop computers were in essence a breach of directors’ fiduciary responsibilities of owing a duty of loyalty to the company,” the staff minutes say.

The CEO was subsequently strong-armed into writing “an email to the chairman noting and acknowledging the strained relations and agreeing that management would remove the assets from the register and that the computers would now become the personal assets of the individual directors”, the document alleges.

In more accusations, the report alleges that another senior board member shared inside information with his wife in order to influence the purchase of his wife’s house by the organisation for its new offices. “The information about COSBOTS’s intension to purchase was only in the board domain, it was curious how the lady came to know that COSBOTS was in the market to purchase a building,” says the document. “It was only reasonable to conclude that she had obtained the information from her husband and he was therefore an active participant in the transaction.”

On the other hand, in one occurrence, the board is accused of influencing payment of royalties to favour local artists over their international counterparts. “During distribution number 13, another attempt was made by sections of the board, led by two senior board members to distribute to local artists money retained in the ‘Holding Account’ which funds belong to international artists,” the report alleges. “This would have been in total contravention of not just the company’s rules, but other international statutes.”

Reached for comment, the dismissed CEO Selotate, who is suing the organisation for unfair dismissal, referred this publication to COSBOTS where Acting CEO, Onalenna Gaontebale, said the Board is unable to discuss its minutes with third parties as they are confidential company documents.

Gaontebale also denied knowledge of leakages of confidential information by some board members for their own benefit. “COSBOTS is not aware of any leakages of information as alluded to nor has management reported some Directors at the Board meetings,” the Acting CEO said.

“As far as we know, there has never been a time when the aforementioned directors were reported to the Board for leaking any company information. The COSBOTS Board continues to discharge their mandate, and the allegations are unfounded.”