Questionable dealings of connected men

Ian Khama, Botswana’s president since 2008, has interests in a premium tourism company that benefited from the controversial relocation of Botswana’s Bushmen from their ancestral land to resettlement camps in the 1990s and the early 2000s.

Khama is a shareholder in Linyanti Investments, a subsidiary of Wilderness Holdings, a company criticised by the Bushmen and international pressure group Survival International for illegally occupying their ancestral land in the Central Kalahari Game Reserve.

Wilderness Holdings spokesperson Julia Swanepoel confirmed that Khama had a stake in Linyanti Investments. “He is not a [direct] shareholder of Wilderness Holdings.  He does, however, own a 5% stake in Linyanti Investments, the owner of the Linyanti Concession,” she said.

The Linyanti Concession covers 1 250km2 of the northern Kalahari in the Chobe District.

Wilderness Holdings was listed on the Botswana and the Johannesburg stock exchanges last year.

According to Wilderness Holdings, Khama purchased the shares “at a market-related price” on October 8 2002, when he was vice-president of Botswana.

Swanepoel further stressed that “the company [Wilderness Holdings] does not own Linyanti but rather the [Linyanti] concession. We have recently renewed our concession until December 31 2025”.

Swanepoel declined to disclose the price for which the shares were bought. “There are certain things that must be kept confidential. Should you publish the price that Ian Khama paid for his 5%, then our competitors could work out the price of the concession and tender below us when it comes for renewal,” she said.

The Mail & Guardian has also established that two directors with close ties to the president currently sit on the board of Wilderness Holdings.

Khama’s nephew, Marcus Patrick Khama ter Haar, and his personal lawyer, Parks Baedzi Tafa, were both appointed directors on January 14 last year. They are not shareholders.

A source close to Khama’s government said that the appointment of the two men was not coincidence and that they are “guarding the master’s interests”.

Defending the inclusion of Tafa and Ter Haar, Swanepoel said that Ter Haar “is an independent, non-executive director as defined by King III and therefore does not represent any shareholder.  Parks [Tafa] is not classified as independent, although he is a non-executive, as the legal firm that he works for, Collins Newman, also provides legal services to the company.  He does not represent any shareholder.”

She said the two were appointed to the Wilderness board based on qualifications and merit.

For more than two decades, the Botswana government has been locked in a bitter battle with the Bushmen over a government decision to force them out of the Central Kalahari Game Reserve.

The government contends that the park is designated for wildlife. With the aid of international bodies, the Bushmen have challenged their eviction. The Botswana High Court ruled in their favour in a landmark judgement in 2006, but two years later, Wilderness Holdings entered a lease agreement with the Botswana government to set up a lodge in the park, which angered the Bushmen. The company currently runs a lodge and an airstrip in the area.

The Bushmen’s main argument was that the lease between the government and Wilderness made no provisions for the rights of the Bushmen whose ancestral land is now used by the company. They also complained that they were not consulted before the tourism venture was set up.

The government reacted by banning the Bushmen from an essential borehole. Through Survival International, they have since called for tourists and investors to boycott Wilderness Holdings.

“While the Bushmen are denied food and water, the government is promoting tourism to the reserve. Wilderness Safaris has opened a luxury tourist lodge,” said a Survival International statement. “While Bushmen nearby struggle to find enough water to survive on their land, guests can sip cocktails by the camp’s swimming pool.

“There is nothing more painful than to see a swimming pool near us in the desert where people can swim while we don’t have water,” commented Jumanda Gakelebone, the Bushmen’s spokesperson, this week.

In yet another twist to the saga, a Botswana appeal court judgement has overturned the government’s decision to deny the Bushmen use of the borehole. The judges described the Bushmen’s plight as “a harrowing story of human suffering and despair”.

Approached for comment, Khama’s spokesperson, Jeff Ramsay, said Khama had declared his interest in Linyanti Investments to former president Festus Mogae. He continued: “Cabinet members, including presidents, routinely recuse themselves whenever a matter comes before Cabinet in which they might reasonably be understood to have a personal interest, whether it is via shares in a company or a relative or business associate.”

Pressed on whether Khama has recused himself from Cabinet meetings dealing with the eviction of the Bushmen from the reserve, Ramsay refused to go into specifics.

Responding to suggestions that the president might have influenced the awarding of tourism licences to Wilderness Holdings, Ramsay said concessions were awarded following open tendering processes and community-based management systems.

“There is thus no conflict of interest between the president’s official duties and private business interests in this or other matters,” he said.

Other faces of the company

Calls by the Bushmen and Survival International for investors to shun Wilderness Holdings seem to have fallen on deaf ears.

According to the April 2011 Wilderness Holdings share register, prominent figures in the country have bought thousands of shares in the company since it was listed on the Botswana and Johannesburg stock exchanges.

Shareholders are a who’s who of Botswana politics and business, and include senior high court judge Mpaphi Passevil Phumaphi. Interestingly, Phumaphi was a member of the three-judge panel that ruled against the forced removal of the Bushmen in 2006. The panel found that the government’s refusal to allow the Bushmen to hunt “was tantamount to condemning the residents of the reserve to death by starvation”.

Lebang Mogaetsho Mpotokwane, a former top public servant and the current convener of opposition co-operation talks in the country, has 40 000 shares in the company. Mpotokwane is a successful businessman.

Former Botswana Congress Party president Gilson Saleshando has 5 000 shares. Saleshando’s party has been a fierce critic of the government decision to remove the Bushmen.

Saleshando’s wife, deputy vice-chancellor of the University of Botswana, Lydia Saleshando, has 10 000 shares in the company. He is a well-known advocate for minority tribes in Botswana.

According to the share register, the Botswana Public Officers Fund, a pension fund for public servants, has 950 000 shares in the company, and the Bank of Botswana staff pension fund has 170 000 shares

Festus Mogae

Four months after his presidential term came to an end in 2008, Botwana’s Festus Mogae was appointed a director of Jonah Capital. A few months earlier, Mogae’s administration had awarded five coal prospecting licenses to the company through its subsidiary, Asenjo Energy.

Asenjo Energy’s assets include six tenements in Botswana with a total prospecting area of 2 600km2, containing an estimated 10.7-billion tonnes of coal.

Jonah Capital, an investment company that focuses on mining in Africa, is led by Ghanaian entrepreneur Sam Jonah.

Mogae (72) dismissed any suggestion that his influence helped Asenjo Energy win the licences in 2007 and that he was completely in the dark at the time about links between Asenjo and Jonah Capital. “The Cabinet does not issue prospecting licenses, [this is done by] the ministry of energy, minerals and water resources,” he said.

Asenjo Energy is a joint venture between Jonah Capital, Sintula Mining and Aquila Resources, with Jonah holding a 50% stake.

It is not clear whether Mogae and Jonah had a personal relationship before the licences were awarded, but in June 2007 the University of Botswana invited the Ghanaian to give a keynote address at the university’s foundation dinner in Gaborone.

Mogae, then the university’s chancellor, shared a table with Jonah. Sources told the M&G that the two men have been personal friends for many years.

The directors of Jonah Capital are mainly Jonah’s family members, but also include former Southern African Development Community general secretary and former Zimbabwean finance minister Simba Makoni.

Mogae told the M&G that he resigned from the company in November last year, but stressed that he saw nothing unethical about joining the company immediately after leaving the presidency.

He said that, before joining it as a director, he was not aware that Jonah Capital had interests in Asenjo Energy. “Even if I had known, I would still have joined the company because I believe it has the interests of the people of Botswana at heart.

“It interests me to see companies coming to my country to create jobs and playing a role in its development. Yes, maybe there are people who would question the timing of my appointment as the director of the company, but my conscience is clear. I am happy that I was associated with the company,” said Mogae.

He said that more than 800 prospecting licences had been awarded to various companies and it was difficult for him to know that Asenjo Energy had been awarded a licence.

On his relationship with Jonah Capital boss Sam Jonah, Mogae replied: “He is my hero. I got to know him many years ago through a friend here called [David] Magang. But I wouldn’t say we are best buddies; we are more fellow Africans who respect each other.”

Political analyst Tlhapelo Ndlovu remarked that the business dealings of Botswana leaders past and present starkly highlights the need for a formal declaration of interests by political office-bearers.

“For a long time, Botswana’s leaders have refused to pass a law on the declaration of assets and liabilities. This has compromised the ethical cleanliness of our leaders and heightened suspicion of conflicts of interest and insider trading,” Ndlovu said.

Ketumile Masire

Since leaving the presidency in 1998, Ketumile Masire has been a director of Global Afrika Resources and Energy Corporation (Garek), a conglomerate mired in controversy over the fate of millions of rands of investors’ funds.

According to its 2005 company profile, Garek invests in a range of sectors, including energy, environmental technology, resources and financial services. Some of its directors and officers have questionable backgrounds: Ronald Creasy and Andrew Cecil, for example, were associated with now deregistered Amalia Gold Corporation, accused by the United Nations of playing a role in the Liberian civil war and involvement in blood diamonds in the 1990s and late 2000s.

The company invited people to invest in it by buying shares that would later turn out to be almost worthless. Since its inception in 1999, Garek and its subsidiaries have taken millions of rand from more than 2 000 investors in South Africa.

According to an M&G investigation, Masire was appointed Garek non-executive chairperson on May 16 2004, but previously chaired other subsidiaries of the group. Between 2002 and 2005, he joined at least eight companies associated with Garek as a director.

Garek and most of its subsidiaries have been deregistered. According to South African company registration records, only subsidiary Global Energy Corporation remains in business. It still lists Masire as a director.

Following complaints by shareholders, South Africa’s former trade and industry (DTI) minister Mandisi Mpahlwa appointed a team of inspectors to investigate the affairs of Garek and associated companies Resourcefin Strategies International Limited (RSI), Mwamko Afrika Trade Resource Industrial and Commerce Corporation Limited (Matric), Independent Holdings Limited (IHL), Appropriate Structures in Emerging Markets Limited (ASEM) and Holistic Resources Limited (HRL).

The inspectors’ hard-hitting report, finally published in 2009, found that a total of R74-milllion was received from investors and that R24-million of this was paid to directors and R16-million to brokers.

The report found that a large portion of investors’ funds was not used to acquire assets, as represented to them, but for operational expenses and commissions for directors or key individuals, and that payments were made to entities (considered investments) where no substantiated value could be established, including entities about to go into liquidation.

It recommended that Mpahlwa release the report for consideration of possible criminal prosecution of directors and officers of RSI, Matric and Garek and possible recovery of investors’ funds by the National Prosecuting Authority.

Masire’s role and benefits

According to the DTI report, Masire played a significant role in the company. Between 2002 and 2006, he received just more than a R1-million (R1 009 576) from Garek and linked companies, an amount that does not include personal expenses.

In an interview, Masire claimed he was misled by the directors of Garek and that the company merely used him to boost its profile.

But this was not always his attitude. In 2005, when online magazine Moneyweb carried a series of critical articles on the company, Masire threated to sue. In a letter dated April 11 2005 he wrote: “I will not dignify the type of journalism practised by your organisation with any form of response to any aspect of such publications. Suffice it to say that Garek — may have or may in future, suffer damages resulting from your publications, which damages maybe claimed from you —

“As chairman of Garek, I and my independent personal staff and advisers are satisfied that Garek is neither ‘conning its shareholders’ nor ‘displaying a blatant disregard for Companies Act’.”



Prosecutions


When the damning report was released in 2009, the investigators recommended that prosecution be considered, but nothing seems to have been done. NPA spokesperson Mthunzi Mhaga said that the prosecuting authority had not investigated Garek or its directors.

A source close to the DTI told the M&G: “It could be that this involves a former president of another country and that the South African government does not want to embarrass [him].”

Over a period of more than two months, the DTI failed to answer the M&G’s questions about possible action against Garek directors.

Not new to controversy

Last year, the Botswana media published secret De Beers files indicating that the diamond company bailed out Masire on numerous occasions when he was going through personal financial difficulties during his time in office, in 1981-1998.

De Beers has since admitted to funding the former president’s debts , apparently to the tune of several million rand.

Masire remains an influential figures in Africa, as he is widely credited with turning Botswana into an economic success story.

He now says that he deeply regrets his association with the Garek group, insisting that during his stint as the company’s non-executive chairperson he was not aware of its questionable dealings.

“Some time in early 2005, we started receiving media reports that the company was ripping off the shareholders of their funds. I approached other board members about this alleged practice but they denied the allegations [as] nothing but professional jealousy,” said Masire.

He said the media continued reporting about unfair business practices by Garek. “The main reason for my resignation was the unsettling stories I had begun to hear about Garek. This worried me a lot and ultimately I decided to resign. I no longer wanted to be associated with the company.” He resigned in June 2005.

Masire said that throughout his association with the company he was unaware of any illegal dealings.

“My mistake was not looking more into the background of the company and directors before joining it. I should have been more careful. I deeply regret ever having been involved in Garek and its directors,” he said.

When it was put to him that he still appears on Cipro records as an active director, Masire responded: “I’m not aware that I’m still listed as an active Garek director. If that is the case, then I strongly state that keeping my name as their director, long after I have resigned, is downright criminal.”

In his memoirs, Very Brave or Foolish: Memoirs of an African Diplomat, published in 2008, Masire made no mention of his involvement with Garek and its subsidiaries.

Asked why, Masire replied: ‘Yes, I have mentioned nothing about Garek in my memoirs. It was impossible to have all the events of my life in the memoirs.”

Ntibinyane Ntibinyane wrote this while an intern at amaBhungane

The M&G Centre for Investigative Journalism, a non-profit initiative to develop investigative journalism in the public interest, produced this story. All views are ours. See www.amabhungane.co.za for all our stories, activities and sources of funding.

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