Letlole’s boardroom war cost shareholders P14.4m
Shareholders of Letlole La Rona may not know it yet, but they are the biggest losers in the epic battle between their company’s former CEO Chikuni Shenjere-Mutiswa and the ‘retired’ board chair Boitumelo Mogopa.
The Business Weekly & Review can confirm that the bitter battle between the former CEO of Letlole La Rona Chikuni Shenjere-Mutiswa and the Chairperson of the company’s Board Boitumelo Mogopa has cost a total of P14.4 million, excluding payment of litigation settlement.
The revelation comes after the recently appointed board chairman, Frederick Selolwane, told shareholders that the litigation between the company and Mutiswa was “settled out of court”. Insiders say there were fears that the cost of the court cases would amount to much more than what Mutiswa was demanding as a bonus cheque in line with the Long-Term Incentive Plan Agreement (LTIP).
“The decision to enter into a settlement agreement was based purely on commercial reasons and now concludes the civil dispute with Shenjere Mutiswa”, Selolwane said. “We believe that the settlement is in the interest of the company and its shareholders as it avoids the expense burden and uncertainty of litigation and enables the Board to focus solely on the business of the company, which enhances shareholder value.”
However, Selolwane did not specify the settlement amount, which is being kept under wraps for now. Even so, The Business Weekly & Review has established that the P14.4 million cost incurred by the company excludes the settlement amount and that P7 million of this was in legal fees alone.
The dispute between the company and Mutiswa gave rise to three cases running parallel, one in the Gaborone High Court, another before the Lobatse High Court while a third was before the Industrial Court sitting in Francistown. The dispute emanated from alleged misconduct and subsequent termination of the contract of employment of Mutiswa relating to the LTIP Agreement.
The fallout began when Mutiswa demanded a P15 million cheque apparently in line with the LTIP. However, Mogopa and the rest of the board resisted his claim, arguing that he had manipulated the scheme in his favour. An investigation was launched into the alleged misconduct. The Business Weekly & Review established that the investigation cost the company P2.5 million.
This publication also understands that because of this dispute, the Board of Directors convened several meetings specifically to resolve it, costing the company P3.2 million in sitting or board fees. A disciplinary hearing that followed the investigations cost the company P1.7 million, leaving shareholders as the biggest losers as the total cost (excluding settlement payments) tallied to P14.4 million.
Mutiswa was eventually fired by the board which stated that he was found guilty. Ahead of the AGM last year, Mogopa tried to offer herself up for re-election together with her other colleagues Curtis Matobolo, Serty Leburu and Terrence Dambe. Insiders say the Botswana Development Corporation (BDC) and Grit, who are shareholders, wanted nothing to do with them and turned down their offers. They eventually resigned.
Selolwane did not respond to questions sent to him this week.