Botswana Public Employees Union (BOPEU) commercial wing Babereki Investments (Pty) Ltd is embroiled in yet another multi-million pula tussle with its erstwhile star errands boy Ernest Molome and his company Mamataz Enterprises (Pty) Ltd. What started off as a writ of summons filed in court on 11 January 2018 by Babereki to recover over P11 million "erroneously/ fraudulently" paid to Molome's company as commission between September and November 2016, has triggered a counterclaim from the latter demanding payment of over P25 million. Babereki Investments – a 100% subsidiary of BOPEU – represented by its then Executive Chairman Andrew Motsamai, had in September 2016 entered into an agreement with Molome – through his company Mamataz – to raise capital for the union's commercial wing. The funds raised were to be used for growing the micro lending and asset management businesses of BOPEU, held under the Babereki conglomerate. In the contract signed by Motsamai and Molome the parties agreed that a three (3) per cent facilitation fee of the capital raised shall be paid by Babereki Investments. As part of the deal Mamataz was also given a mandate to manage the relationship between Babereki and the identified investor, among numerous other deliverables. Between September and November 2016, Molome raised P50 million, which was disbursed into the account of Babereki Investments. The amount raised entitled Molome and his company to a payment of P1.5 million representing the three (3) per cent of capital raised as agreed in the contract. Surprisingly Molome was paid P13. 1 million, representing an excess payment of P11.6 million. In a writ of summons against Molome and Mamataz Enterprises demanding that they return the excess P11. 604 million, Babereki argues that "the payment of the amount was not based on the contract; was not for any service rendered; was done fraudulently or a result of a conspiracy to defraud Babereki and was made without any entitlement whatsoever by Molome and Mamataz to such monies". Babereki claims for the payment of P11.6 million being "unlawful alternatively illegal, alternatively fraudulent payment made to Molome and Mamataz" with interest at the rate of 10% from the date of disbursement to the date of payment and the costs of suit. In the notice to defend, filed last week (February 12), Molome denies owing Babereki any money. Instead he has submitted a counterclaim insisting that the company owes him a balance of about P25 million. "Babereki, instead of paying (Molome and Mamataz) the entire 3 per cent of the P1.2 billion raised by them (of which only P50 million was drawn down), which is about P36 million, only paid P11. 604 million leaving a balance of P25 million which is due and owing," submits Molome's attorneys.
Millions missing at BOPEU
Meanwhile, preliminary findings of an audit commissioned to investigate financial impropriety at Babereki Investments (Pty) Ltd has signalled embezzlement of funds running into millions of Pula as a result of dubious transactions, The Patriot on Sunday has learnt. Babereki – an investment company leading the commercial arm of Botswana Public Employees Union (BOPEU) – has been at the centre of controversial news in recent months. Soon after the removal of Motsamai under controversial circumstances which the union tried to portray as amicable on 11 September 2017, BOPEU engaged auditors to carry out a forensic investigation into financial transactions of the company. The Patriot on Sunday has it on good authority that preliminary findings of the investigation into the operations and dealings of Babereki Investments has already uncovered a trail of suspicious transactions running into millions of Pula, which remain unaccounted for. BOPEU leadership moved into action after it was briefed about suspicious transactions with some companies, which exposed Babereki to huge financial risks. The then Chief Finance Officer at Babereki, Victor Leoketsa, also resigned in a huff shortly thereafter. BOPEU later resolved to dissolve the entire board of Directors at its central executive meeting, and ordered all BOPEU owned companies to report to NEC. BOPEU President, Masego Mogwera, has repeatedly refused to discuss the goings-on at Babereki or the controversial sacking of Motsamai, saying the contractual agreement between them is private in nature. "BOPEU will not at any point disclose anything regarding the agreement including reasons for the termination of Mr Motsamai’s contract and we appeal to members of the fourth estate to respect such. As a Trade union, we cannot be seen to be breaching the privacy and confidentiality of employment contracts. Further, in the interest of good corporate governance, it will be untidy and unprofessional to divulge the deliberations and reasons advanced by the Board of Directors of Babereki Investments (Pty) Ltd," said Mogwera, assuring BOPEU members that the trade union remains solid and intact.
SACCOS millions vanish
The preliminary findings also show that P10 million released by Babereki Investments destined for SACCOS has never reached the cooperative subsidiary for disbursement to members who join the scheme. A resolution had been taken at the 2012 congress that BOPEU should set up a Savings and Credit Cooperative Society (SACCOS) division to promote saving among the general membership. Registered in Botswana under the Cooperatives Act of 2013, SACCOS are designed to promote thrift among members by mobilising savings to create a source of funds for onward lending at a reasonable interest rate. A feasibility study undertaken to establish the viability of the project, estimated that SACCOS needed a P1 million grant to kick-start and fund operations. To entice BOPEU members to apply for and join the credit scheme in large numbers, it was also resolved that SACCOS offer the first 10 000 members a free P1 000 to kick-start investment. Formal registration of BOPEU SACCOS was concluded on October 06, 2015 – two months before the union congress in Palapye in December 2015 where Motsamai was re-elected president. It was at the same congress that a resolution was taken instructing Babereki Investments to forward P10 million to SACCOS to enable the latter to start recruiting members. Babereki SACCOS was launched by the chairperson of Afena Capital – now known as Kgori Capital Botswana, Tebogo Naledi, in Palapye on December 07, 2015. Managing Director of Kgori Capital Bakang Seretse is a close associate of Motsamai and the latter has in the past confirmed that the former has provided financial advice on investments to Babereki.
An ambitious housing scheme launched by the trade union at a glamorous occasion in Gaphatshwa village in December 2015 dubbed BOPEU Enclave, also threatens to explode into a multi-million Pula scandal. The union, through Babereki, was planning to construct 500 houses for their members that will be purchased at affordable prices. An unprecedented number of applications for the facility created a challenge, which Babereki sought to resolve through acquisition of a chunk of land in Gaborone North. More properties were to be constructed there to service the overflow of applications to purchase houses at the much hyped BOPEU Enclave on the outskirts of Gaborone, along A12 Molepolole road. Now, Babereki is embroiled in a tussle with property developer (names withheld) over stalled construction at the Gaborone North site, a deal which was signed and sealed through a contract. The contractor is demanding that ownership of the land be transferred to him, as was agreed, so that he can proceed with construction of houses that will be sold to BOPEU members through the housing scheme. Construction cannot commence because the acquisition of the Gaborone North property was never finalised, despite that the seller (names withheld) has satisfied his side of the bargain. According to sources, the preliminary investigation has found that although P8 million was disbursed from Babereki coffers, the funds never reached the seller but were instead diverted to a company owned by one of the external suppliers of Babereki. Effectively, that means BOPEU has paid P8 million but still does not own the acres of land it was supposed to acquire from the seller. The piece of land in Gaborone North was to cater for the three-bedroomed housing units, which was fully subscribed. Sources tell The Patriot on Sunday that although the union, through Babereki Investments, has already invested about P12 million for primary infrastructure, BOPEU Enclave has ground to a halt and there is no construction on site. At the time the project collapsed, the uptake was growing with three-bedroomed houses fully taken up, two-bedroomed houses at 70% uptake while studio (bachelor pads) were still struggling with low uptake.