As market watchers slowed down and prepared for the weekend on the last Friday of a brisk June, the board of Letlole La Rona issued an extraordinary statement to the Botswana Stock Exchange (BSE). The announcement was a jumble of high-pitched denials; a circling of the wagon with a chest-thumping call to arms. Foaming at the mouth, the retaliation was hot on the heels of a series of articles chronicling details filed before the Industrial Court leading up to the unflattering contract terminations of its then CEO Chikuni Shenjere-Mutiswa and the board.
The Letlole board alleged a sprawling relentless onslaught, seeming to hint that all this was being orchestrated behind the scenes by a devilish former CEO. The said ‘culprit’ is seen as the hyena behind the bush.
Even the recent cold snap in the country was attributed to his evil machinations, so much that every Letlole share purchase on the BSE is meticulously investigated on the suspicion that he could be plotting to use the money the company itself paid him to build a shareholding.
After the BSE statement, a good measured 16-page document titled “Report on Conduct of Chikuni Shenjere-Mutiswa,” was leaked and appeared in the media detailing what it said was the forensic investigator’s report on the dismissed CEO’s (mis)conduct. In that extract, FTI Consulting detailed a laundry list of alleged transgressions by the axed CEO, stretching from fraud, overworking his team and everything short of snatching kids’ candy.
The report, a copy of which this publication has, is an extract of a full report which apparently is not for shareholders’ eyes. The report was not filed before court when the ex CEO sued for unfair dismissal and submitted a thick file detailing events leading up to his sacking. Reaching court seemed to be something Letlole wanted because of the possibility that it could become a public document for everyone to see.
However, the board instead opted to negotiate its way out of court proceedings, compromisingly paying off an apparent trickster. It is instructive to note that even as Letlole said its ex-CEO was guilty of manipulating the LTIP to his benefit, it covered two other executives.
Baalakani Nlumbile, the Property Manager and the acting CEO Kamogelo Mowaneng had made claims on the same LTIP contested. Insiders say Mowaneng was the first to declare her claim but U-turned after negotiating with the old board. Likewise, Nlumbile negotiated to forfeit his claim; in return his contract was renewed around September 2020.
When the issue broke out, Morula requested to see the full report. However, insiders say Botswana Development Corporation (BDC) intervened. BDC owns 40 percent of Letlole. BDC had not responded to questions sent to them by press time. Neither did Morula. Morula owned 1.13 percent as at June 2020. Another fund manager who spoke to this publication says they also requested for the full report. Letlole refused to release the full report or let them read it. During the hearing, a panellist says even the accused was denied the full document.
By some accounts, the full FTI report is in three volumes, each thick enough to stop a bullet, and approximately 500 pages. The full FTI report is said to be kept under triple lock-and-key, guarded like the US nuclear codes. With a number of shareholders reported to have requested it and consistently turned down, directors have reportedly sworn that they are determined to go to their graves with the report clutched to their bosoms.
When the Choppies saga broke out, an investigation was carried out into its founder and CEO who had allegedly committed misconduct. At first, the board had held that shareholders were entitled to see and read the full reports on the CEO at Choppies offices. However, the CEO pushed for it to be published on the BSE for all shareholders to access it. Recently at Allan Gray led discussion about the issues of poor disclosure, insufficient expertise of board members and senior management, inappropriate remuneration structures and the underrepresentation of independent non-executives, among contributing factors weakening the governance landscape in Botswana.
According to the discussions, urgent reforms are required to help move Botswana forward. Some ideas to consider include a material increase in mandated minority shareholder protections, higher minimum disclosure standards, binding shareholder vote on executive directors’ remuneration and increased activism by minority shareholders. There has been also a buzz about shareholder activism given the agency theory.
A curious point of Letlole’s statement was coded with a chilling warning directed at minority shareholders. The board chairman boldly declared that his board retains the full support of “majority shareholders”.
This publication spoke to Selolwane this week. Responding to this publication, he wrote: “The company is aware of media articles purportedly based on the forensic report from unknown sources and distances itself from these. The forensic report pertaining to the misconduct by the former CEO is a matter of legal privilege. As such it is confidential and cannot be commented on or circulated outside the company and applicable authorities.
“The company confirms that the report has not been made available to any shareholders, irrespective of the size of their holdings in LLR, or any other stakeholders for that matter, other than to the relevant authorities and members of the LLR board to act in their fiduciary capacity. LLR further points out that the matter with the former CEO has long been settled out of court and as such resurrecting it does not serve the company or its shareholders’ interest nor those of the former CEO himself, having settled the matter.” The Business Weekly & Review was not able to reach Mutiswa.
