The Gambling Authority (GA) gave Grow Mine Africa a 30-day notice to “show cause why” their national lotto preferred bidder status should not be revoked after the company failed to provide a P100 million financial guarantee to the Authority and a convincing national roll-out strategy, investigations by The Business Weekly & Review have established. The 30-day notice expired yesterday, 27 May 2021.
This publication can reveal that Grow Mine Africa proposed to have their notice extended by a few days while they try to put together an escape plan. In an interview, the CEO of the Gambling Authority, Thulisizwe Johnson, would not give details of the matter. While he acknowledged receiving an inquiry sent to him, Johnson was cautious. “The Authority is, however, unable at this moment to disclose details of the National Lottery Licensing negotiations, between the Authority and Grow Mine Africa,” he said. “The negotiations are a delicate and confidential endeavour, and the extent to which we can make pronouncements or disclosures (of what is being discussed) is limited. We, however, wish to state that negotiations are continuing and the nation and other stakeholders will be given an update on the outcome.”
On the other hand, the new Chairman of Grow Mine Africa Board, Carthage Ringo Matlhaga, declined to give The Business Weekly & Review an interview, saying he was in a meeting and would call back. A follow-up inquiry was sent to his mobile phone seeking to confirm if Grow Mine Africa was given such a notice and how the company intended to resolve the problem. The Business Weekly & Review also wanted to know how the company would raise the funds sought, given that it was racing against time. Matlhaga did not respond to the set of questions sent to him.
Through his company, Carthlee Inventions (Pty) Ltd, Matlhaga owns 10.5 percent of Grow Mine Africa. As Chairman of Grow Mine Africa (trading as Dineo Tsa Pula (Pty) Ltd), Matlhaga replaced Sefalana Group Managing Director (MD), Chandra Chauhan, whose chairmanship was in representation of Sefalana Group, which is the largest shareholder in Grow Mine at 40 percent. Sefalana was also the financial guarantor of Grow Mine Africa, a strategic decision which was made by Chauhan, bragging about Sefalana’s financial muscle.
All that has fallen apart. The Business Weekly & Review has seen a letter written by the Board Chairman of Sefalana Group Holdings, Max Marinelli, addressed to all shareholders of Grow Mine Africa to notify them of their decision to withdraw their financial support to Grow Mine Africa. The letter is dated 6 May 2021, and it is addressed to Colmar Enterprises (Pty) Ltd, which is the second largest shareholder in Grow Mine at 23.5 percent.
Colmar shareholders are Frederick Selolwane alongside Chief Investment Officer at Botswana Development Corporation (BDC) Moatlhodi Lekaukau, former president Ian Khama’s nephews Dale Seretse TerHaar and Marcus Patrick-Khama TerHaar, former Botswana Football Association (BFA) president Maclean Letshwiti, former Puma Energy Botswana Managing Director Mahube Mpugwa, Itumeleng Ramsden, wealthy Chinese businessman Bing Liu, and a company called Homec Investments Propriety Limited, which is owned by Boitumelo Paya, Larona Makgoeng and Percy Raditladi.
The letter was also addressed to the third largest shareholder in Grow Mine, at 13 percent, a company called Citizen Money Makers (Pty) Ltd. It is owned by Boipuso Molatlhegi, Cinderella Molome, Boatametse Mpofu, Thato Raletsatsi and Kebobonye Pabalinga. Managing Partner at Collins Newsman & Co, Parks Tafa’s company Idlehill (Pty) Ltd, which owns 10 percent in Grow Mine Africa, was also sent the letter. Carthage Ringo Matlhaga, through his company Carthlee Inventions Propriety Limited which owns 10.5 percent in Grow Mine, also received the letter. So did Mokgethi Frederick Magapa, who directly owns 3 percent in Grow Mine Africa.
According to the letter, it appears that on 19 April 2021, Grow Mine shareholders wrote to the Sefalana Group MD, Chauhan, asking him to approach the Sefalana Board of Directors to seek an extension of the financial support to Grow Mine Africa at a fee. However, the request was rejected outright. Sefalana Chairman, Marinelli, instead reminded the other shareholders of Sefalana decision communicated in a letter dated 13 November 2020 in which the Sefalana MD at the time notified them that Sefalana would no longer play a part in matters relating to the lottery or make any financial contributions.
“That decision remains unchanged. Sefalana also advised you of our intention to revoke its financial support within 60 days of that letter dated 12 January 2021. In an attempt to assist Grow Mine in progressing with its negotiations with the Gambling Authority, this support was extended to 30 April 2021 and then again to 31 May 2021. During this combined notice period of over 6 months, Grow Mine was required to obtain replacement funding support,” Marinelli wrote in the letter dated 6 May 2021. Further, he noted that obtaining replacement funding had always been the reason for the extensions.
“Unfortunately, we are not able to extend this any further and this letter serves (as a) formal notice of our support being withdrawn on 30 May 2021,” the Sefalana Board chairman wrote to Grow Mine shareholders. Further, Marinelli asked Grow Mine shareholders to notify the Gambling Authority of Sefalana’s decision by 7 June 2021 so that the Gambling Authority is fully aware of the position of Sefalana.
Investigations show that after Sefalana withdrew its financial support to Grow Mine Africa, the other shareholders of Grow Mine Africa are struggling to raise the funds and thus meet the Gambling Authority’s requirements before issuance of a national lottery licence to Grow Mine.
Investigations also show that Sefalana withdrew its financial support because of a fallout and infighting among shareholders of Grow Mine Africa for control of the company as it stood on the threshold of becoming a source of unprecedented golden goose. According to those in the know, the infighting caused potential financial backers to baulk for fear that the bickering could harm prospects of Grow Mine getting the lotto licence.
As things stand, Grow Mine is currently struggling to raise P100 million or at least secure a financial guarantor so as to meet the requirements of the Gambling Authority. In the lotto licence negotiations, it is also a requirement for Grow Mine to have a clear national lottery roll-out plan.
However, sources say Grow Mine Africa has proposed a phased roll-out to the Gambling Authority whereby they wanted to roll it out city by city because of the company’s financial shortfalls. The Gambling Authority is said to be against this because the national lotto should be a national project rolled out to all parts of Botswana in at the same time.
The Chairman of Grow Mine was asked about their proposed city by city roll-out plan and what their next plan may be since the Authority is against that idea. Matlhaga has seen The Business Weekly & Review’s inquiry but has not responded to it.
Next week will be exactly one year since the announcement of Grow Mine Africa as the preferred bidder for the national lotto. On 4 June 2020, the Gambling Authority, under the captaincy of Johnson, announced its preferred bidder for the 10-year licence for what is a lucrative multi-billion pula industry in 2017.
Ithuba Solutions (Pty) Ltd was named the reserve bidder. Directors of Ithuba Solutions are Todd Mangadi, Benson Madisa, Lawrence Maika and their South African partners Louis Almero Du Pisanie, Mogonedi wa Andrew Mafojane and Charmaine Mabuza. Ithuba RSA owns 75 percent shares while 25 percent is owned by citizen shareholders through Flameback Botswana (Pty) Ltd.