The Lesotho National Development Corporation (LNDC) has officially terminated its M15 million funding agreement with Enrich Holdings, citing unmet conditions and ongoing internal conflicts within the company’s leadership.
In a letter dated March 24, 2025, LNDC’s Interim Chief Executive Officer, Molise Ramaili, confirmed that the corporation has decided not to proceed with the financial support that had been approved in 2023 under strict conditions.
“LNDC’s board approved funding of Enrich Holdings’ turnaround strategy and business plan to the value of M15 million in 2023 with conditions precedent,” Ramaili stated in the letter.
He said that Enrich Holdings, however, could not meet clause 8.3 under conditions precedent in the loan agreement, which also happened to be the most critical.
“The clause reads as follows: The borrower shall provide a share register and certificates that are up to date together with proof of contributions or acquisition of shares.”
He narrated that as a result of Enrich’s failure, an agreement to register a special purpose vehicle (SPV), Enrich Investments, to de-risk the transaction was reached and executed between the two parties.
Subsequently, an offer letter of M15 million, with an acceptance deadline of December 13, 2023, was issued to Enrich Holdings to be disbursed into Enrich Investments as an SPV that would facilitate the trading of Enrich stores until the LNDC funding is recovered.
“Enrich Holdings did not accept the offer. There were instead a series of internal disagreements within Enrich Holdings’ leadership and management of LNDC’s proposed risk mitigation measures that have not been resolved to date,” Ramaili said.
“The Corporation therefore regrets to inform Enrich Holdings that it has reached a decision not to proceed with the funding. The decision was not made lightly and is based on the number of risks that have been identified,” he added.
This decision marks the end of what was initially seen as a promising deal.
Thabo Qhesi, board chairman of Enrich Holdings, confirmed receipt of the letter in an interview with Newsday. He informed shareholders of LNDC’s decision on March 25 and announced an urgent board meeting to address the situation. “We will issue a statement once deliberations are complete,” Qhesi said.
The cancellation follows a turbulent period for Enrich Holdings. Last week, Newsday reported that the struggling Basotho-owned enterprise descended further into chaos when its board suspended acting Chief Executive Officer Peter Morolong on March 18.
In a letter signed by Qhesi and director Paul Mosuoe, Morolong faced accusations of “gross misconduct” amid a company unraveling at its core.
Morolong, on March 10, attempted to remove Qhesi from the board, alleging conflicts of interest, negligence, and failure to implement shareholder resolutions from December 21, 2024.
“Your suspension is effective immediately due to your lack of commitment, failure to exercise due diligence, and actions bringing the company into disrepute,” Morolong wrote.
Enrich Holdings’ flagship Enrich Supermarket, intended as the cornerstone of its operations, remains shuttered, its future uncertain as the company grapples with mounting challenges.
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