Auditor General exposes Tholo Energy’s M31 million bombshell

… And the government’s failure to act

• Officials knew
• Tholo didn’t pay
• Now the Petroleum Fund is paying the price.

The Petroleum Fund is staring down a deepening financial crisis as the Auditor General, ‘Mathabo Makenete, issues a blistering warning over a massive M31 million debt owed by Tholo Energy, an arrears now threatening to choke the Fund’s already-tightening cash flows.

In a sharply worded audit opinion tabled in Parliament this week, Makenete did not mince her words.

“Without qualifying my opinion, I draw your attention to the long overdue debts on levies and slate settlements by Tholo Energy amounting to M31,029,912 that might result in litigations and adverse impact on the Fund’s cash flows due to non-compliance,” she said.

“This is despite the numerous efforts by the Board of Directors and the Management to address the matter and this needs collaborative efforts by all the stakeholders affected,” she added.

The warning comes as the Petroleum Fund’s newly released financial statements paint a grim picture of collapsing operational cash generation.

Despite posting a profit of M14.1 million for 2024/25, propped up mainly by M16 million in interest income, the Fund effectively generated no cash from its core operations.

In fact, it posted a cash deficit of M57,390, a catastrophic plunge from the M83 million operational surplus recorded the previous year.

Once depreciation, prior-year adjustments, and other non-cash items were stripped away, the Fund’s liquidity position deteriorated further. Working capital movements, primarily rising receivables and payments tied to gratuity provisions, drained another M3.3 million.

These numbers expose a troubling reality that without interest earnings from its investment portfolio, the Fund’s operations would be in the red.

If the Auditor General’s warning sounds familiar, it is because this is far from the first time Tholo Energy has featured at the center of public-fund exposure.

Earlier this year, Newsday revealed that Tholo Energy owed the Ministry of Natural Resources a staggering M131 million in petroleum levies, an arrears so large that the Ministry refused to renew the company’s trading licence pending settlement.

But that M131 million, we now know, is only the tip of the iceberg.

Newsday investigations established that Tholo Energy also owed the Road Fund roughly M48 million in road maintenance levies, pushing its known liabilities to state-owned institutions beyond M179 million.

Road Fund officials confirmed the debt but refused to disclose the exact amount.

“We acknowledge that Tholo Energy does owe the Road Fund under the road maintenance levy stream. The Road Fund Secretariat, in consultation with relevant stakeholders, is continuously engaging with Tholo Energy to ensure that the debt is recovered in the most reasonable economic manner, having considered several factors,” Phumla Moleko, Road Fund’s head of corporate communications, said in March.

“We will, however, not be in a position to divulge the specific amount as a show of good faith and trust in the process being followed,” Moleko added.

Natural Resources Minister Mohlomi Moleko revealed to Parliament in March that Tholo Energy had repeatedly defaulted on agreed payment plans for the M131 million debt.

Moleko warned that the company’s expired licence would trigger liquidation proceedings if payment continued to stall.

He admitted that the government had exercised “leniency” because Tholo is a locally owned enterprise, but that patience had been exhausted.

However, in a contradictory account, Ministry of Energy’s Principal Secretary (PS) Tankiso Phapano insisted delays were caused by a dispute over the true amount owed. Phapano said the two sides only agreed on the M131 million figure last year and had since been negotiating terms.

Tholo Energy’s problems extend even further.

In February, Newsday reported that the company and its managing director, Thabiso Moroahae, were implicated in an alleged M450 million tax-fraud scheme.

A whistleblower submitted evidence to the Financial Intelligence Unit (FIU), the Directorate on Corruption and Economic Offences (DCEO), the Lesotho Mounted Police Service (LMPS), Revenue Services Lesotho (RSL), and the Director of Public Prosecutions (DPP).

FIU reportedly completed its investigation in 2024 and shared its findings with authorities, but no action has been taken.

With Tholo Energy owing millions across multiple public institutions, and showing repeated patterns of non-payment, the Petroleum Fund finds itself dangerously exposed.

Makenete’s warning that the M31 million arrears could trigger litigation and undermine cash flows is not abstract. The Fund’s own financials show it is already under liquidity stress.

The latest cash-flow position suggests that one more shock, be it delayed levy payments, investment underperformance, or further erosion of working capital, could push the Fund into a full-blown cash crunch.

Meanwhile, the government has yet to enforce decisive action against Tholo Energy, despite years of escalating arrears and a mounting list of scandals.

For now, the Petroleum Fund remains an institution carrying the weight of a private company’s debts, unresolved investigations, and policy indecision, while its operational health deteriorates in plain sight.

Staff Reporter

Authored by our expert team of writers and editors, with thorough research.