Many might not know it, but before Boitumelo Mogopa, the ex-board chair of Letlole La Rona changed tact, she acknowledged that the company’s Long-Term Incentive Plan (LTIP) had triggered following the appointment of Fredrick Selolwane and Bronwyn Corbett to the board. The trigger was due to an increase in the number of directors from five to eight in addition of Oteng Keabetswe.
It was clear from the conversations between management and the board that the discussions hinged on the LTIP of 2019 that later became the centre of court battles after the board tried to disown it. There was an LTIP updated on March 2020 to address issues of control clauses. However, it was not yet ratified. FTI Consulting, which was engaged by Letlole to unearth the alleged misconduct by the former CEO, confirmed that it was the 2019 LTIP that the board signed and implemented. The trigger clause meant that management, being the CEO Mutiswa, the CFO Kamogelo Mowaneng and the Property Manager Balaakani Nlumbile, were entitled to about P30 million pay-out cumulatively. Mutiswa was to get half while Mowaneng and Nlumbile 25 percent each.
Perhaps motivated by the financial implications, Mogopa had sought the views of Mutiswa on how the board could work out an amicable solution, namely amending the change of control clause. At one meeting, Tiny Kgatlwane, the chair of the Audit, Risk and Compliance Committee (ARAC), acknowledged the LTIP trigger. But as with Mogopa, she sought to set aside the agreement requesting instead that discussions should speak to practical, on-the-ground realities, given that five old directors still constituted the majority of the board. The discussions between management and the board focused on the purpose of the LTIP and why it included the change of clauses. The tone of this meeting was cordial, as had been others. It ended with the chair committing to return to the CEO with possible ideas around a solution by end of the following day, which was 23 April 2020. The ex-CEO then drafted and shared notes of the meeting.
After the meeting of the 22 April 2020, Mutiswa removed himself and Nlumbile from the convene platform. Mowaneng was removed by executive assistant Dinah Jonah at the behest of Mutiswa after he encountered technical glitches with the system. Mutiswa viewed that he was now negotiating the LTIP agreement with the board. As all previous LTIP negotiations had been between himself and the board in closed sessions with relevant documents saved in restricted convene folders, he was of the opinion that the same should apply. None of the management were to have access to the convene platform until the negotiations were completed. Mutiswa expected this to be short and quick as the directors themselves had pointed out that this was a burning issue, and they would revert back to him.
On the 27 April 2020, Mowaneng, Nlumbile and Mutiswa convened a meeting with Mogopa and Kgatlwane. The subject of this was amending the LTIP agreement, specifically the change of control clause for directors, a provision that had resulted in the LTIP triggering. Mutiswa made a proposal that whoever was taking control of management of Letlole should be the one to bear the cost of this change in control. Kgatlwane summarily rejected this idea. However, no counter-proposal was offered. Instead, Kgatlwane said she would be recommending that the board make a full investigation on circumstances around the LTIP.
At that point, Kgatlwane then demanded that each member of management state right there and then whether they would be making a claim in accordance with the triggered LTIP agreement so that she could take a position to the board. Mutiswa was quick to answer, pointing out that in terms of the LTIP, he had 180 business days from date of trigger to make a claim.
The following day, 28 April 2020, Mutiswa called Jonah asking him to come to the office with her contract. He wanted to tell her that trouble was brewing regarding the LTIP and, given her proximity to him as his executive assistant, it was possible that she may be targeted. Mutiswa said this because the board had been very unhappy with the nature and timing of the unexpected resignation of one of the directors, Bafana Molomo. His resignation took place soon after Letlole’s strategy session and he was appointed director of another Botswana Stock Exchange-listed property company.
After the meeting at which the board discussed this matter, Serty Leburu met Kgatlwane and informed her that Jonah had previously worked for Molomo. Kgatlwane then called Mutiswa, instructing him to keep a very close eye on Jonah or ideally dismiss her (she was still serving her probation). Kgatlwane said that as she had previously worked for Molomo, their “woman’s intuition” told them that she remained loyal to him and would “spy” on Mutiswa and Letlole for him. Mutiswa balked at the idea of dismissing her.
After the meeting of the 27 April 2020, Mogopa sent an email to the ex-CEO, saying that the office was now out of bounds to all staff as there was now an ongoing investigation. That evening, 28 April 2020, Mutiswa sent his declaration in terms of the LTIP agreement. In the declaration, he made reference to the discussions with the board where they acknowledged that due to their appointing two new directors the LTIP triggered.
On 5 May 2020, Mutiswa was asked to attend a meeting at the Letlole’s offices regarding a settlement letter. In attendance was Mogopa, Kgatlwane and Terence Dambe as chairpersons of the board, ARAC and the investment committee respectively. The meeting discussed the change of control in the LTIP and the investigation. Mutiswa told the trio that he was willing to cooperate with the investigators and also negotiate amending the change of control clause.
Dambe made the point that although there was a signed and valid LTIP agreement, the company was willing to spend up to P5 million to fight it and that his advice would be that Mutiswa would be best served by focusing on keeping his job, an obvious attempt to intimidate. He continued on to say Mutiswa was “doubly covered” as the LTIP agreement would trigger in the event that Mutiswa was terminated, hence there was no need for that change of clause related to directors to remain in the agreement. He said it would be in everyone’s interest that this clause was dropped.
He also claimed that Corbett, the new board member, had indicated that Grit Real Estate had a ready-made long-term incentive scheme which they were keen to implement as a replacement of their own LTIP agreement. Throughout, the board chair Mogopa and Kgatlwane were nodding and murmuring approvingly.
In a later call, Dambe continued in the same vein, saying that unlike Letlole’s management, he personally had little downside in any LTIP dispute despite his central involvement in the approval of the LTIP agreement. At worst, he claimed he would suffer a bit of embarrassment, resign from the board and then carry on with his job at the law firm as normal. Thus, he was “sorted.” Easy way out?
It was suggested that Mutiswa had a job to lose, children in school to worry about, rent to pay and so on. As such, he needed to be very alive to these asymmetrical outcomes and consider keeping his job as first prize with anything else (i.e., claim as per the LTIP agreement) being “the cherry on top”.
Dambe said he had given Nlumbile the same “brotherly advice” that the road they were choosing was not good and they would lose their jobs. He had also suggested that one may think one held a very strong and valid contract but one may have made a tiny small oversight somewhere that a lawyer like himself could pounce upon.
It was a strange comment, but Dambe was not new to this kind of conduct. In 2018, when the company was disposing of its assets to Cresta, he approached Mutiswa asking him to consider giving Minchin & Kelly, the law firm where he is Managing Partner (and Head Real Estate), the engagement of transferring the properties. He said he was not issuing an instruction but Mutiswa should keep in mind that any decision he made would be “remembered”. The job, worth a million, was given to Minchin & Kelly. Executives at Cresta raised the matter with Mutiswa flagging the conflict. So did some lawyers. Mutiswa at the time alleged that his hands were tied.
On 7 May 2020, Dambe sent an email informing Mutiswa that the board had appointed FTI Consulting to carry out a forensic investigation around the LTIP and that management was to cooperate with them as they would be interviewing them. Keabetswe was appointed as the director coordinating the forensic investigation.
On 17 May 2020, he circulated a message on the WhatsApp group of the board and EXCO suggesting that Mutiswa was a fraudster with a “modus operandi”. Perhaps the board had reached a conclusion and the investigation was for show, a per-ordained outcome being known.