Thursday, June 20, 2024
14.5 C
Maseru

‘Bungled’ MKM liquidation haunts govt, liquidators

Business

…As MKM group demands that liquidators pay investors their monies back

…Charges that the state protects provisional liquidators

Nthatuoa Koeshe

MKM Group of Companies came out guns blazing this week breaking years of silence on the issue of payment of its creditors.

It demands payments for its creditors.

The company charged that MKM’s provisional liquidators should explain to creditors of MKM why they still have not been paid their monies, 15 years later since the liquidation processes started.

The High Court in 2007 ruled that three of MKM’s investment companies, Star Lion Gold Coin Investment (Pty) Ltd, Star Lion Group Ltd and Star Lion
Insurance Ltd should be liquidated.

This was after MKM companies were guilty of running illegal insurance and banking businesses in breach of the Financial Institutions Act and the Insurance Act.

The company lost its four-year legal battle in May 2011 when the Court of Appeal confirmed the High Court order that it should be liquidated.

Speaking on behalf of MKM on Wednesday, ‘Mamarame Matela, said provisional liquidators Qhalehang Letsika, Monica Louro and Saint Clare Cooper owe Basotho who invested their monies in MKM answer as to why 15 years later nothing has happened.

Matela blamed the government, Central bank of Lesotho (CBL) and Master of the High Court for protecting provisional liquidators who she alleges keep embezzling the creditors’ monies they have been collecting from the MKM estates.

“The government, Central Bank of Lesotho and Master of the High Court are protecting the liquidators who are embezzling the funds meant to pay Basotho investors, what’s worse is that all those institutions are using the courts of law to fight for and protect these people,” she said.

Matela said it seems the government does not have any intention of seeing those owed by MKM group of companies paid, “…yet money made from the liquidation processes have been used to enrich themselves”.

She said the government should explain to the creditors why they have not been paid since 2007.

“The government should explain to Basotho investors why they have not been paid since 2007. The intentions of all those institutions were never about seeing Basotho paid.

MKM Group of Companies was shut down in November 2007 by the Central Bank of Lesotho after it emerged the company was operating banking and insurance businesses in violation of the Financial Institution Act 1999 and Insurance Act 1976, respectively.

A CBL-commissioned investigation conducted by South African firm, PricewaterhouseCoopers, revealed that of the M400 million invested by depositors in MKM comprising MKM Marketing Ltd, Star Lion Group Ltd, Star Lion Insurance Ltd and Star Lion Gold Coin Investment (Pty) Ltd, the company could only account for M100 million in assets that included buildings and vehicles.

It has been two months since businessman, politician under the Revolution For Prosperity (RFP) banner and MKM proprietor, Lebuajoang Thebe-ea-khale, engaged the former Lesotho Communications Authority (LCA) boss and the recently appointed Socialist Revolutionaries (SR) deputy leader, Matela, to work on the modalities of recovering the millions of Maloti lost by his company’s creditors in investments made with MKM.

Matela was recently in hiding fearing for her life after learning of an alleged plan hatched by state security agencies to eliminate her because of her involvement in the ongoing MKM saga, and her engagement to help Basotho investors recover their money lost in a Ponzi scheme conducted by MKM Group of Companies.

Matela said civil servants have “intentionally” stopped serving the best interests of Basotho but rather have turned into “politicians’ lap dogs”.

“The government has to take accountability for systemic failures in carrying out their duties on time to protect the public yet the public’s interests have not been protected since these processes started,” she said.

“Before the MKM liquidation, Central bank sold the old Agric Bank/ Maseru FNB building along Kingsway to MKM. My question is when the transaction happened, wasn’t the bank aware of the status of MKM, if a few years later it decides to liquidate it saying it has been operating without a licence?”

She said provisional liquidators were put in charge of all MKM properties with expectations that after the liquidation processes, creditors would be paid and yet 15 years later creditors are still not paid and three of the 47 properties which were bringing the most money were sold but the money was however used for the interest of the liquidators and not used to pay the owed people.

She said: “They took over MKM Group’s businesses which were still in operation and profitable and collected the monies to enrich themselves while the nation was waiting to be paid. They stopped paying the workers and also stopped injecting money into these businesses to ensure that they continue with operations.”

According to the 2020/2021 provisional liquidators’ report seen by this publication, costs including salaries, auction commissions, operational bills and legal costs amounting to M13 million were recovered and paid to liquidators for the job done.

It is the M13million on record that Matela is arguing was supposed to have been used to pay Basotho creditors.

She said among creditors owed by MKM are civil servants and law enforcement agencies members who had invested with MKM, workers who have not been paid by other MKM burial branches, suppliers as well as Thebe-ea Khale and the directors of the MKM group of companies.

Matela warned civil servants she accused of blocking payments to the creditors to come up with solutions of how Basotho investors will be paid.

“We are giving them a chance to come up with a solution of how the creditors will be paid back their monies. Everyone knows who the Master of the High Court is and who gave the liquidation order against MKM. We expect answers.”

Responding to the allegations made on the role played by the government, Finance Minister Thabo Sophonea said the liquidators were chosen by the courts and thereby anything regarding them remains the issue of the courts.

He said MKM should go back to the courts of law if they feel they were dealt with unfairly and not blame the government for what is happening.

“This issue does not involve the government in any way. The court takes its own decisions and the government has no say in that. If MKM feels like the courts are unfair then they should go back and appeal and not blame the government for the decision of the courts. All of these are independent issues that Thebe-ea–Khale is faced with, and there isn’t anywhere where the government is involved,” he said.

At the time when this publication went for printing, this reporter had since written to the Central bank and awaiting a response from the bank.

Attempts to get a hold of one provisional liquidator Qhalehang Letsika failed as his phone rang unanswered, and messages were not read.

- Advertisement -spot_img
- Advertisement -spot_img

Latest article

Send this to a friend