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'I never worked for CMB' – Gaolathe

SHARE   |   Wednesday, 11 March 2020   |   By Sipho Ziga
Gaolathe Gaolathe

President of Alliance for Progressives (AP), Ndaba Gaolathe, has flatly denied any connections with controversial asset management firm CMB currently at the centre of a liquidation inquiry. He, however, confirms having a good professional relationship with its embattled Director Timothy Marsland.  On Thursday 21st November 2019, Gaolathe was subpoenaed by the Registrar and Master of the High Court to appear before an interrogation of the CMB dealings by the creditors – among them BPOPF, BOP, and NBFIRA. Attorney Sipho Ziga (Appearing for the Provisional Liquidator) cross-examined Ndaba Gaolathe. Here, we reproduce what transpired in court on the day. 

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ZIGA: Okay Mr. Gaolathe. I have furnished you a bundle of documents which consist of correspondence between ourselves and …but I am interested in is at page 1 there is a list of payments which appear from the CMB records to have been made to you. Each of the payments are in the sum of BWP166,666.00 and were made on 25th May 2017, 3rd July 2017, 11th August 2017, 31st August 2017, 22nd September 2017, 23rd November 2017 and 10th January 2018. The total amount is BWP1, 333, 328.00.  Do you see those payments?

GAOLATHE:  I see them.

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Ziga: We want to confirm, for the record, what those payments were for, if you can explain what the payments were for.

GAOLATHE:  Yes, they were for my work at Fleming. Maybe just to give you a bit of background, if I can do that. I was one of the first people to set up a private equity fund in Botswana, in about 2007. Marsland was the first to set a debt fund. And both of us went into subsidiary arrangements with BIFM. And both of us were two of four CEO’s of the BIFM satellite of companies. He was a specialist in [inaudible] that is how our professional relationship started. And in fact, he sat in our, when I was running the BIFM Private Equity Fund, he sat in our investment committee. So we established a very good professional relationship. In fact the professional relationship was so good that when I left BIFM at the time I left it because I disagreed with the ethics at BIFM and when I did, he did ask me to partner with him in what then was BIFM Capital.

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But I was not comfortable in partnering with them. Although he is a very strong professional, I’ve always seen him as somewhat of a legalistic and business hawk.

Now fast forward, he came and shared with me his ambitions to establish a Pan-African financial services company. And as part of that to develop the private equity and the asset management aspects of them! He was already doing private equity with the Botswana Pension Fund and he had aspirations to acquire Fleming and he wanted me to help him with Fleming.

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I refused, for a while, and later on I decided I am willing on at least one condition, and it was that as long as Fleming does not do any business with the Government of Botswana. As long Fleming doesn’t do any work with BPOPF I am willing to assist him restructure Fleming.

The reason why I did not want to be involved in a Fleming that is involved in Government work is obviously that I was a Member of Parliament at the time and generally over time I have developed a skin for not wanting to be involved in the Government … in Government of business because I am somewhat of a rebel in Botswana. I don’t want to be associated with anything that would compromise my ability to speak my mind.

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So that condition was met, on the basis that given that Fleming had lost its assignment with BPOPF and Fleming having forecast its business on Government through the BPOPF I felt it was a great opportunity to restructure Fleming and create out of Fleming a Pan-African Financial Institution. So, it was attractive to me in that sense.

The reason why I did not want to be involved in a Fleming that is involved in Government work is obviously that I was a Member of Parliament at the time and generally over time I have developed a skin for not wanting to be involved in the Government … in Government of business because I am somewhat of a rebel in Botswana. I don’t want to be associated with anything that would compromise my ability to speak my mind.

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And having assessed the type of personnel that was at Fleming, some of them were my own mentees, that I had recruited from school, one of them, Baboni Mokwasa, an outstanding young lady that I identified after high school and was in my view one of the most outstanding youngers given that Fleming had those, I felt that it was a great opportunity for me to mentor, guide and hand hold these professional to create this new Pan-African Fleming.

So therefore we, I started embarking on that. Obviously the first part was to be vetted by NBFIRA as a profession that who would be qualified to work and hand-hold Fleming. And the strategic arrangement was for me to sit with director responsible for strategy. Basically leading, conceptualising and implementing strategy.

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And indeed it was an exciting time; one of my first priorities there was to create strategy alliances; one of which is a surging asset management company in South Africa called First Avenue, whose CEO is a great professional ally of mine who studied in the US…so, we embarked on that. We embarked on conceptualising …

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ZIGA: Can I just stop you there … [audible] … at the time that you were engaged did you enter into any sort of formal arrangement?

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GAOLATHE: Yes, we did.

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ZIGA: And what was the formal arrangement.

GAOLATHE: The formal arrangement was for me to be Executive Director responsible for strategy and with a remuneration, which remuneration was two million per year. And he had also wanted me to be a shareholder which I did not want to do and which I did not take up.

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ZIGA: The other thing that I noticed is that the payment was very sporadic. So these payments, how were they made? Did you have to issue an invoice, or what was the arrangement, or were they monthly payment, or what?

GAOLATHE: They were, well they were supposed to be monthly payments. They were supposed to be monthly payments.

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ZIGA: At BWP166… a month?

GAOLATHE: Yes!

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ZIGA: Month, but they were sporadic because you were paid on the 25th or sometime on the 11th next time on.  

GAOLATHE: Well in what I do, and over the years, I think I have learnt to be someone who focuses on my work and I don’t pay much attention to when … in fact there are months that I was not paid, I continued on, without being paid because I believed in what we were doing.

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ZIGA: The other thing that I want you to confirm for the record, we have previously asked you for a Consultancy Agreement and you indicated that you can’t find it.

GAOLATHE: Yes, I can’t find it. I had a hardcopy. Actually, I am still looking for it. I had a hardcopy. I had thought I had placed it in a safe place, but it would seem to me that safe means that opposite.

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ZIGA: And you also don’t have correspondence between yourselves and Mr. Marsland to confirm that you were actually engaged as a consultant.

GAOLATHE: Well, the correspondence that I have, I thought I shared. It’s mainly correspondence around aspiring the strategy that they company need to take heed and the need for him to respond on time. So, there is, I think, quite a bit of correspondence around what needed to be done at Fleming.

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ZIGA: But what I am particularly interested in is really correspondence relating to the terms of your engagement. Something that says to us; we are appointing you as a director strategy and these are the terms.

GAOLATHE: No. That one was a hardcopy.

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ZIGA: That’s the one that was in a hardcopy. It is of concern to us obviously the fact that the funds that were paid, which I am sure you are aware by now, came from CMBF1. Can you just explain why that was the case or whether you were aware of it and what your position was in that regard?

GAOLATHE: Yes. Well you know he, the impression that I had is that he was responsible for a staple of companies and that staple of companies; my understanding was that there was CMA, CM for Africa and CM for private equity and CMA Botswana. My understanding. And the more efficient way would have been to capitalise Fleming from the outset as we had recommended. So, him paying what he was paying, my view is that he is paying from his staple of companies and this would be normalised over time. I didn’t realise that the money was emanating from a fund. Really I realised that it was from one of the staple companies in CMB had been there.

ZIGA: Okay, just to clarify you believe that all these companies were his companies and he was entitled to pay you from wherever he liked

GAOLATHE: Absolutely.

ZIGA: So you can confirm that you never did any work for either CMB or CMBF1 and had no contractual relationship with any of the companies?

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GAOLATHE: No. In fact I did not work for them. In fact, I did not want to work for them. They had asked me to help them look at a few things. They had things with the insurance, what’s it, Bona, things like that, they had asked me to help them. One of my hobbies from before when just modelling valuations and I said no because of this view that I didn’t want anything in which Government is directly involved. 

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MASTER OF THE HIGH COURT: Thank you, you are excused.  

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GAOLATHE: Thank you.  



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