Bona Life Chief Executive Officer (CEO) Regina Vaka is launching a multi-million pula lawsuit against embattled private equity asset management company, Capital Management Botswana (CMB) and its Directors, following a recent clash over Bona Life deals. Vaka revealed on Wednesday that she has instituted legal proceedings against CMB Director and CEO Rapula Okaile after a fallout which culminated with the latter demanding P650 million from her recently. Vaka has dismissed all the accusations leveled against her and Bona Life by Okaile in his letter of demand issued two weeks ago. In his claim, Okaile accused Vaka of being liable for her personal actions that destroyed Bona Life from being a billion pula company in March 2017 to its current zero worth value and thus demands compensation of P650 million for shareholding held by CMB. Vaka pours scorn on allegations that Bona Life has zero value, explaining that the company has accumulated some intrinsic value that is embedded in it and that it has established a very strong brand in the local market and managed to penetrate the market well to build a sizeable client portfolio. Further, Vaka has in turn hit back at CMB saying the letter of demand written to her by Okaile, who is also a Director of Bona Life, is ‘scurrilous’ and is now attracting and escalating negative publicity. She therefore intents to sue to that effect. “The letter is defamatory and intended to cause permanent damage to the reputation of the CEO (herself) and Bona Life brand. This is being addressed through appropriate legal channels,” she said, adding that the claim of P650 million is invalid, made in bad faith and cannot be sustained in any court of law. Though she could not be drawn into discussing the letter in its entirety,Vaka put on record a number of things among them, the point that the author of the defamatory letter who is also a Director of Bona Life is not a shareholder of Bona life and does not have a claim against her. She argues that the authors of the letter of demand do not have authority to represent CMB which is currently under statutory management. "At this stage CMB can only be represented by the statutory manager who has been appointed by court," she said.
Vaka also dismissed Okaile's claim that Vaka has "mismanaged 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". According to Vaka, in terms of industry norms, a life insurance start -up company is expected to make financial losses for the first three to five years, therefore the financial position of Bona Life has not yet stabilised and is expected to continue to fluctuate in line with the industry trends. “The solvency of a life insurance company fluctuates upwards and downwards depending on the numerous factors some of which are outside the control of the company such as inflation, interest rates, political stability, global trends etc. To address the solvency challenges , the sale of annuity business has been suspended, the position is being optimized and a comprehensive review of the business is being conducted for engagement with stakeholders, ”explained Vaka. In addition to the fact that Bona Life clients’ right are protected by NBFIRA which was created by an act of Parliament to protect clients of non-bank financial institutions and to maintain stability in the financial services sector, Vaka assured clients that there was nothing much to worry. “While Bona Life has some investments made through CMB which is currently under statutory management and is being investigated by the DCEC, 84 % of the funds are held in Bona Life and invested in secure Botswana Government bonds and fixed instruments,” she revealed.
Bona Life & CMB
Vaka explained that after receiving inconsistent reports of its investment with CMB, and after becoming aware of a petition to liquidate CMB Fund 1, a subsidiary of CMB which holds assets in which Bona Life has an interest and that CMB was under investigation by the DCEC for possible criminal offences, Bona Life took the decision to report CMB to NBFIRA because it is the latter ‘s role to protect the clients of non-bank institutions. CMB, according to Vaka, was placed under Statutory Management by the Regulatory Authority NBFIRA following complaints received from Bona Life, BPOPF and BIFM about possible criminal and other breaches of the law. “CMB is contesting the appointment of a statutory Manager in the High court and this is widely publicised,” she said. CMB is in dispute with Botswana Public Officers Pension Fund (BPOPF) over the management and ownership of a private equity investment fund, the Botswana Opportunity Partnership (BOP). BPOPF has released approximately P477 million pensioner funds to the partnership managed by CMB, which cannot be fully accounted for. After making some investments in different companies using funds from the partnership, among them Bona Life, CMB is alleged to have sold the BOP to its holding company Capital Management Africa (CMA) for P50 million and tried to dismiss BPOPF from the BOP. On the other hand, CMB was reported to DCEC by Botswana Insurance Fund Management (Bifm) on January 30, 2018 following an attempt to withdraw P71 million from a Botswana Life Insurance Limited (BLIL) account managed by Bifm at First National Bank Botswana (FNBB). Bona Life is the first citizen-owned life insurance company which was started as Bramer Life Insurance by Regina Vaka in partnership with a company of Mauritian origin in 2014. In 2015, Bramer Life fell into crisis when the Mauritius parent company was placed under curatorship in Mauritius and new local shareholders were approved by the Regulatory Authority NBFIRA to indirectly hold stakes in Bona Life as follows:
• 40 % BOP (a partnership between BPOPF and CMB)
• 25 % CMB (owned by Rapula Okaile and Tim Marsland)
• Regina Vaka retained the 25 % formerly allocated in Bramer Life
• 10 % Bramer Life staff
The company rebranded from Bramer Life to Bona Life in September 2015.