- The company stands as a house divided against itself
- M15 million lifeline, intended to save Basotho legacy, has instead become its epitaph
Enrich Holdings, a once-proud Basotho-owned enterprise teetering on the edge of collapse, has descended further into chaos as its board of directors suspended acting Chief Executive Officer Peter Morolong on Tuesday.
The dramatic move, detailed in a scathing letter signed by board chairperson Thabo Qhesi and director Paul Mosuoe, cites allegations of “gross misconduct” and paints a picture of a company unraveling at the seams.
The flagship Enrich Supermarket, meant to be the jewel in the company’s crown, remains inoperative and its future is uncertain.
“You will recall that the Enrich Holdings Ltd Board of Directors has allowed you to make representations as to why you could not be suspended for your alleged gross misconduct,” Qhesi and Mosuoe wrote in a letter dated March 18.
“The time given to you to provide your response has expired; The notice is hereby given to you for your suspension accordingly,” they added.
The board further instructed Morolong to return all company property to Mosuoe’s offices at Messrs Mosuoe & Associates in Maseru by Tuesday, March 18, 2025.
“You are further directed to hand over such property between 10:00hrs & 12:00hrs on Tuesday, 18th March 2025, which property shall be reported in the books of record, the present condition upon arrival, and the like; and, You are advised that you will be informed of your hearing date soonest. We trust you will find the above in order,” the letter concluded.
But Morolong, defiant and unbowed, fired back in an explosive interview with Newsday last night. “I am still the acting CEO. As far as I know, the board has never resolved to suspend me,” he insisted, dismissing the suspension as a sham orchestrated by the people he claimed had no authority.
“The person purporting to suspend me was suspended himself last week!” he roared, referring to Qhesi.
His reference to Qhesi’s alleged suspension stems from a dramatic twist just eight days earlier.
On March 10, Morolong had issued his own letter removing Qhesi from the board, accusing him of conflicts of interest, negligence, and bringing the company into disrepute by failing to implement shareholders’ resolutions.
“Enrich Holdings has decided to suspend you with immediate effect due to conflict of interest you have shown in conducting your fiduciary duties, lack of time and commitment to perform your duties with duty of care and due diligence, bringing the company into disrepute by refusing to act and implement shareholders’ resolutions made on the 21st December 2024,” he wrote.
He added: “You will be informed of the Date of the Special Meeting where your removal as a non-executive director will be discussed. You will be given an opportunity to make written representation to the company and its members.”
Qhesi released a statement yesterday informing the public that the board has temporarily suspend Morolong, effective from Tuesday, March 18, a move that Morolong scorned as illegitimate.
“Board members do not have executive powers; they cannot release statements on behalf of the company. I am the acting CEO, and I am the only legitimate spokesperson of this company. Mr. Qhesi doesn’t know what he is doing,” Morolong lashed out.
Enrich Holdings has been struggling financially, prompting the Lesotho National Development Corporation (LNDC) to intervene in December 2023.
LNDC pledged a M15 million loan to rescue the Basotho-owned supermarket, attributing its decline to a lack of skilled management.
LNDC Interim CEO Molise Ramaili emphasised that the corporation’s involvement aimed to “ensure the loan investment is effectively managed, benefiting both Enrich and other businesses.”
As part of its oversight, LNDC secured representation on the company’s board and advocated for appointing a CEO or managing director with substantial retail experience.
“We prioritize individuals with both local and international retail expertise,” Ramaili stated. “LNDC’s involvement will include monitoring financial management and ensuring regular operational reports.”
A portion of the loan was allocated to settling Enrich’s debts, including preventing the auctioning of the company’s gym equipment by the courts. LNDC projected that Enrich would regain stability and repay the loan within seven years.
However, by December 2024, a task team report presented to shareholders identified several unresolved challenges including a lack of proper documentation, incomplete staff recruitment processes, and unclear delegation of powers, among others.
“There is no proper documentation showing the change from the original contract to the current SPV (Special Purpose Vehicle) arrangement. The second contract does not formally recognise the SPV,” the report read.
“Recruitment processes for staff remain incomplete or unclear. There is ambiguity regarding the delegation of powers between Enrich Holdings and the SPV,” it added.
The report further lamented the unclear SPV structure and operations. It revealed that the board was composed of three representatives from LNDC and two from Enrich Holdings.
“The SPV will handle operations, but clarity is required on oversight. Enrich Holdings will receive dividends annually. It is unclear whether LNDC’s dividends will be treated as loan repayments,” the report stated.
It cautioned that it was not clear which business plan would guide the operations of the SPV and recommended that the stipulation that profits be used to repay LNDC within seven years required further clarification.
“There has been a breakdown in communication between the board and shareholders, leading to confusion and concerns. There is no clear explanation regarding whether LNDC’s share of profits is a loan repayment or another financial arrangement,” the report added.
The task team also disclosed to the shareholders that it held two meetings with the Enrich Holdings Board to address concerns regarding the Special Purpose Vehicle SPV.
It said a request to meet with representatives of LNDC was made but was unsuccessful. “The plan is to open the store in the first week of February (2025),” read the report.
February has come and gone, and the store remains closed.
At the heart of the feud lies a bitter dispute over the LNDC’s millions. Morolong alleges that Qhesi and his allies are attempting to funnel the loan from LNDC into an SPV account, a move he calls “misappropriation of funds”.
“LNDC has a contract with Enrich Holdings, not some SPV,” he told Newsday. “I will not stand by and let this happen.”
Authored by our expert team of writers and editors, with thorough research.
