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Pensions board in legal scuffle


Mohloai Mpesi

The Public Officers’ Defined Contribution Pension Fund has drawn into a fall-out after the Board members dragged each other to court over Administration disputes.

Members of the Trustee Board have been in a split and at each other’s throats since last year March when the Board decided to appoint NBC Lesotho Insurance Company Limited as Fund Administrator while the opposing side; Futho Hoohlo and Monaheng Mahlatsi wanted one Akani Company to be elected as administrator, refuted the decision and sought the High Court to stage a forensic audit against NBC.

According to an explanation given by the Director in the Teaching Service Department who is also a contributing member of the Fund and also a Trustee, Komane Motaba, Hoohlo and Mahlatsi were hell-bent on Akani being selected as the Financial Administrator over NBC. The issue ballooned to the point where a due diligence was staged to iron out the differences. 

The duo lodged a court application in regard to the nomination of the said company in a case (CIV/APN/114/2020), whose prayers sought to nullify the Board decision.

“That application was made by the pensioners’ association in collusion with the two members of the Board; Hoohlo and Mahlatsi,” Motaba said.

“The main issue in the application is about a forensic audit to be conducted against the elected administrator, NBC, the interest of pensioners in collusion with Hoohlo and Mahlatsi is for the admin company to be investigated and reviewed in terms of capacity, technical expertise, and capability to handle finances,” he said.

NBC, is a South African Insurance Company which also has a branch in Lesotho and was competing with Akani for the position of Administration in the Fund; however, the NBC captured the majority of the Board members’ hearts in these debates although the decision did not humour Hoohlo and Mahlatsi. 

Akani, on the other hand, is reported as not registered in Lesotho.

NBC has been suspended and has not commenced its duties after its appointment which counts to almost a year now, after the duo sought the court’s intervention, “until the court has given a verdict on that case, they are not eligible to work. The Trustee has been operating without a substantive administrator.”

He indicated that Hoohlo and Mahlatsi did not only join a campaign of the beneficiaries unlawfully but also acted in alliance with Public Officers’ Defined Contribution Pensions Fund Association in an effort to remove the Administrator of Funds, adding that some of the litigants in the issue are not even pensioners.

To fuel things up, Motaba filed an application last month (CIV/APN/19/2021) indicating that the duo conspired with other beneficiaries and that they acted in utter violation of section 17 of the Pension Fund Act and for that reason they are ineligible to be in continued occupation of their respective offices as members of the Board of Trustees of the Fund.

He said Hoohlo, who vowed not to interfere in the Administration issues, became influential as the Chairman of the tender Committee to see NBC thrown out.

“I wish to take the court into my confidence and state that the Fund is embroiled in a fierce litigation (CIV/APN/114/2020) in which the members of the Board of Trustees in the names of Futho Hoohlo and Monaheng Mahlatsi acted in alliance with Public Officers’ Defined Contribution Pensions Fund Association,” he said in the court papers.

“The impact of that litigation was for them to seek to nullify a decision of the same board in which they are members by joining in a crusade of beneficiaries in the most unethical of ways. Most of the litigants in issue are not even pensioners of the second respondent.

“Records reveal that only two of the pensioners cited in these proceedings are in receipt of a monthly pension from the Public Officers’ Defined Contribution Pension Fund Association,” the application said.

“They were clearly disenchanted with the decision of the Board which endorsed the appointment of Administrator of Funds of which they are members and were using the association and the aforesaid beneficiaries to nullify a decision to which they are an integral part of by virtue of their membership to the Board of Trustees.

“I seek leave to attach the pleadings in the mentioned case in due course to the extent of illustrating that indeed they joined in the crusade of beneficiaries wilfully and deliberately and sued the same Board to which they are members.

“There is yet another advert in which an effort is made compromise an evidently pending matter in which the efforts are being made to cause for the engagement of a Forensic Auditor to investigate the administration services of the Fund offered by the long-standing company by the brand NBC Lesotho Insurance Company Limited,” the court application reads.

“Quite striking, Futho Hoohlo is the Chairman of the evaluation and tender committee and he has been quite instrumental in the initiation of proceedings aimed to nullify not only the administrator’s contract but also initiating a forensic investigation of the same enterprise in the most unprocedural of ways.

“The dominus litis in the case in which the Trustees join the cause on the litigants already referenced in the preceding paragraph was nothing but an endeavour of seeking appointment of forensic auditors. In this pending matter, they are seeking appointment of forensic auditor and that relief was declined but they are effectively seeking to obtain the relief they asked for extra-judicially.

“What is of crucial importance is the fact that Hoohlo and Mahlatsi owe a fiduciary duty to the board and the act of them doubling-up with a desired end of frustrating the resolutions of the same board in which they participated either positively or negatively does not augur well with both the law and ethics which govern Directors/ Trustees of the Board.

“Alternatively, and in the likely event that the court finds that the Pension Fund Act is no application, I aver that the aforesaid Trustees are in breach of their fiduciary duties, the documentary evidence attached is more than sufficient to render them unfit to hold their respective positions” he maintained.

He further went on to indicate that the appointment of Sempe Moshoeshoe, the Corporate Secretary of the Fund who was allotted to act in the Principal Officer after the substantive Principal Officer, Thabo Thulo (Fourth Respondent)’s contract expired on January 31, 2021 was unlawful

“Section 15 of Public Officers’ Defined Contribution Pension Fund provides that the Board must appoint a Principal Officer, on the same note section 18 of specified Offices Defined Contribution Pension Fund Act No. 19 of 2011.

“However, there is an ambiguity of section 18 to the extent that it states in express terms that the same Principal Officer appointed by Public Officers’ Defined Contribution Pension Fund shall serve as Principal Officer.

“Alternatively, Section 21 of the Pension Fund Act explicitly provides that a Principal Officer both in acting and substantive position can only be appointed with the approval of the regulator Third Respondent (Central Bank of Lesotho).

“I have since learnt that with the expiry of Thulo’s contract, the Corporate Secretary (Fifth Respondent) was appointed to act in the office of Principal Officer and he accepted the offer contrary to the peremptory prescripts of the law.

“Beyond the fact that this Regulator, or at worst, Minister of Finance, has not as yet formally endorsed the appointment, the appointment of Corporate Secretary as acting Principal Officer is contrary to the dynamics of the Corporate governance and sound administration for the legal advisor of both the administration/Secretariat and Board to assume the reins as a Principal Officer,” court application read.

“He is glaringly conflicted and cannot as such act in the context of this case. I aver that this approach compromises the independence and functional autonomy of the office of Corporate Secretary and also his role as the Chief Legal Advisor of the Secretariat of the Fund,” the application read.

Meanwhile, approached for his comment on the matter, Hoohlo told this paper that the matter is sub judice hence he could not comment on it.

On the other hand, Mahlatsi maintained that the appointment of Principal Officer has to be chosen by two Boards since he has to serve both Boards. He continued that Motaba was misdirecting himself on a case of NBC appointment.

“His concern is about me and Hoohlo for giving out an affidavit on pensions fund and appointment of Principal Officer, that the decision of Principal Officer’s appointment was not supposed to be made by two boards, the board of Trustees and Pensioners, so I cannot fully delve into that because it will be determined by the court” he said.

He further stated that he was outstripped by the Board members since those who were against the notion of engaging NBC were only four with him included while about five to six members were for the motion.

He said they made consultations regarding the matter but were advised not to partner with NBC as was connected to many corruption cases in South Africa.    

“On the issue of NBC, it was clearly reported that NBC was losing clients in South Africa. We found out that the companies parted ways with that company because it was linked to cases of corruption.

“We made a due diligence and even went as far as involving a consultant who advised that it is risky to make relationships with NBC.

“I and Hoohlo advised that we should not go for NBC but we were outnumbered by the majority of votes. I reported the matter to the pensioners because I represent them, and they wanted a forensic audit to be staged against NBC.

“Many people were against the forensic including Motaba who swiftly hurried to court to block the forensic audit from being performed. If there is nothing to hide they can let it happen. So the board of pensioners said we should continue with the forensic since the application is already in court,” he said.    Motaba’s case is set to be debated in the High Court of Lesotho on March 22, 2021.

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