Juicy details have started to emerge as skeletons tumble out of the closet of embattled multi-billion private equity asset manager Capital Management Botswana (CMB) and the companies they invested in. The chief executive officer (CEO) of CMB – a subsidiary of Capital Management Africa (CMA) – Rapula Okaile is embroiled in a dirty fight with Regina Sikalesele-Vaka, the CEO of local insurance firm BONA Life. CMA is wholly-owned by Timothy Marsland. Last week Okaile slapped Vaka with a letter of demand for P650 million, being liability for her personal actions that destroyed BONA Life from being a billion Pula company in 2017 to its current zero worth/ value. "As a direct result of (your conduct), the current value of Bona is roughly zero. In the premises our clients have suffered damages due to your unlawful conduct and we are instructed to seek damages against you in your personal capacity in the amount of P650 million," reads part of the letter from Okaile's lawyers. Okaile and CMA are shareholders of Foudello (Pty) Ltd, collectively holding 65% of the issued equity. Foudello in turn owns 100% of BONA Life Insurance (Pty) Ltd. Vaka is a Director and shareholder of Foudello, owning 25% of the issued equity in her name and thus owns 25% of BONA Life. She is a Director and the Chief Executive Officer (CEO) of BONA Life.
BONA Life broke
Okaile and CMA accuse Vaka as CEO of mismanaging BONA Life to the extent that her actions have resulted in massive destruction of shareholder value, resulting in Bona Life being declared insolvent by its statutory actuaries, QED Actuaries & Consultants (Pty)Ltd. The insolvency was reported in QED's September 2017 valuation letter, which reads: “As at the valuation date the Company was insolvent and also did not meet the solvency requirements as required by the Act. We recommend an immediate cessation of writing new annuity …” until certain issues were addressed, in particular, the production of a three-year business plan. Same was requested from QED in March 2017. Okaile saisy at least until January 2018, Vaka failed to produce a busines plan to the prejudice of Bona and its shareholders. He further says despite QED advising Vaka to cease the selling of annuities, her continuance of the sale of annuities to the general public was in direct violation of the Chapter 42:01 Companies Act, which states that a company may “(e) not to agree to... incurring any obligation unless the director believes at that time, on reasonable grounds that the company will be able to perform the obligation when it is required to do so”.
"I am in deep, deep trouble"
Okaile says in an attempt to cover up her mismanagement Vaka maligned CMB by making various misrepresentations to both the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) and the Directorate on Corruption and Economic Crime (DCEC). He says Vaka maliciously continued to negotiate with CMB to arrange a capital injection of some One Hundred Million Pula into BONA Life. The capital injection was much needed input required by BONA Life in order to cover up mismanagement, so as not to alert the Regulator as to the true state of Bona’s financial position come the end-March 2018 reporting period, says Okaile.Accusing Vaka of embarking on a pre-designed course of conduct to disparagenCMB for her benefit, Okaile wrote: "Your misrepresentations relating to CMB to NBFIRA were solely designed to provide you with a scapegoat for your own mismanagement of Bona and assist you in avoiding your self-created and admitted “deep deep trouble” in which you found yourself. In fact you confirmed, in writing, “I know very well what you have told me and I know very well that I am in deep, deep trouble. Thank you for reminding me of both counts.“ This written admission by you is contained in an email sent by you to Mr Marsland, in his capacity as director of CMB, of 29 January 2018. The self-same email adds the following statement by you, “You started the destructive spiral with your threats. If you want to get out of it, I will meet with you tomorrow evening at Caravella.”
Okaile further notes that Gift Noko, an employee of BONA Life, admits in a letter addressed to NBFIRA on 12 January 2018, that Vaka conspired with the BPOPF to obtain funding from it in order to bail out BONA Life. Although he claims that Vaka falsely represented that BPOPF is a shareholder of BONA Life to obtain the injection of further funds, on Friday Principal Officer Boitumelo Molefe denied any direct connection with the insurance company. Molefe denied that BPOPF has ever bailed out BONA Life as they only related to the company through their private equity asset manager in the BOP partnership. According to Okaile the BPOPF letter dated 17 January 2018, headlined “COORDINATION OF EFFORTS REGARDING CAPITAL MANAGEMENT BOTSWANA (PROPRIETARY) LIMITED” is evidence that the pension fund is attempting to use a statutory instrument to reverse a contractual failing of its own making, which conduct Vaka assisted through her claims. Okaile says Vaka's actions regarding BPOPF are in direct contradiction with her letter to Timothy Marsland, representing CMB, on 21th December 2017 in which she stated, “Notwithstanding our divergent views on the future involvement of the BPOPF through the BOP, it is has been agreed that this is an issue entirely between CMB and the BPOPF which is not within my mandate and is being addressed through appropriate channels. The Shareholder relationship in Bona remains through CMB as the General Partner of the BOP and Director of CMB.“ Therefore, Okaile says Vaka's actions resulted in the obliteration of the shareholder value of BONA Life, and consequently Foudello.
Okaile reveals in the letter of demand plans to list BONA Life during late 2018 or 2019 on the Botswana Stock Exchange, in the manner as proposed by Vaka.He says Vaka proposed that the 40% of equity held by the Botswana Opportunities Partnership (“BOP”) should be sold so as to create the free float, while she would retain her entire 25% shareholding. The expected valuation on listing was estimated at P1 billion. The 25% shareholding owned by Vaka would have been worth P250 million. Based on this, the shareholding value of the 65% held by CMB shareholders would have been P650 million. "Your wanton obliteration of shareholder value of BONA Life has rendered the aforesaid valuation unattainable. Instead of a successful company, Bona is now insolvent. This latter state of affairs is solely as a result of your calculated interference in a dispute which does not concern you and/or BONA life, for the sole purpose of your self-created need to have a scapegoat to blame for your mismanagement," reads Okaile's letter, adding that Vaka's actions, although intended for the benefit of BONA Life, fall outside the course and scope of her duties and obligations as a director and CEO. Therefore, Okaile concludes that she is in serious breach of her fiduciary duties and her actions were malicious, vexatious, conducted for her own benefit and unlawful. To support the accusations levelled against Vaka, Okaile submits a long list of letters dating from far back in 2017 to early 2018 which she wrote to NBFIRA and DCEC making numerous allegations against CMB. Vaka has not responded to the letter of demand.