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PULA STEEL, UPDATES ON LIQUIDATION AND PROSPECTS FOR REOPENING

SHARE   |   Tuesday, 26 November 2019   |   By Dithapelo Keorapetse Selebi-phikwe West Mp
Keorapetse Keorapetse

Keorapetse asked the Minister of Investment, Trade and Industry to update Parliament on the liquidation of Pula Steel and its sale. As a result of the closure of BCL mine, which had substantial stake in Pula Steel, the company was also affected and was placed under liquidation. This process has taken too long, has been shrouded in secrecy and there are allegations of impropriety And things not done in accordance with corporate governance ethos.

Pula Steel is one of the issues I raised in this Parliament in 2014/15. There was all evidence that this was a scam; many things did not make sense eg the business concept defied common sense. For instance; I questioned why Pula Steel depended on, as its raw materials, scrap metal, when scrap metal was allowed to be exported to South Africa? I asked how on earth Pula Steel would make profit when it produced low quantities and low quality of steel billets when at the time there were stock piles in the international market and especially that China was also producing much cheaper steel? I asked these questions and I was labeled a doubting Thomas.

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I asked for instance; why a new company like Pula Steel was working with Hindok and People Map Agency of India? Why was it that  about the same time that Pula Steel was registered or incorporated, these two companies were also incorporated in India? Why is it that Pula Steel depended on these companies for supply of personnel, equipment and materials when there are old experienced players in India and elsewhere? I asked these questions because there was public funds involved from BCL and CEDA, and I believe also from BDC. These are the questions that I asked in Parliament and warned as I did with many others things including BCL, that we are headed for a disaster and that disaster actually came to pass, Pula Steel was liquidated. I reported this corruption to DCEC. To this day I have no updates on this matter.

Even the liquidation of Pula Steel has not been going well because it has not been transparent and following proper laid down procedures. So, up to now, we do not know who is interested in buying Pula Steel apart from unofficial  information that we have. We do not know how far the liquidator, Registrar and Master of the High Court are in terms of selling Pula Steel. We also do not know if there are prospects of reopening the plant.

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We ask this question because Global steel magnate Lakshmi Mittal's ArcelorMittal, the world's leading steel and mining company, with a presence in 60 countries and an industrial footprint in 18 countries, decided to close its Saldanah plant in South Africa  , consequently shedding over 1000 jobs. Please inform the house on global and international trends regarding the steel industry and whether the industry has a future in Botswana. 

We are worried as the people of Selebi Phikwe because our town is becoming increasingly desolate since the closure of the BCL mine. The economy of Phikwe has almost collapsed, businesses have closed, people have lost their jobs, unemployment and poverty levels are high. Many people found themselves in instant destitution because of the closure of the BCL mine and the closure of Pula Steel among other businesses that collapsed. It is in our interest that Pula Steel is first resuscitated and properly resuscitated and given to legitimate business people who will turn it and make sure that it operates profitably. That is our plea and we want to find out from the Minister whether if she’s working towards that desirable objective.

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Our wish as Phikwe residents is that that Pula Steel be reopened so that people are hired  and the economy of the town diversified. Most importantly, we pray that BCL be reopened,  that must be the priority. I will stop here to hear from the Minister on what they are doing to make sure that Pula Steel reopens and is run profitably and everything is in order in terms of its winding up by the current liquidator and on whether everything has been done according to the ethos and dictates  of corporate governance and the laws of this country. 



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