Justice Abednego Tafa of Gaborone High Court will deliver judgement on a case in which a private security and investigations company is suing the Debswana Diamond Company for P110 million of unpaid money for spying for the giant mining parastatal.
Infotrac says the contract entailed lobbying for appointment of the late Albert Milton as Managing Director of Debswana. As the much-publicised trial dovetailed towards the end of Thursday lastweek, former Debswana MD Balisi Bonyongo took the stand as a witness for Debswana whereupon being cross-examined by defendant lawyer,
Significantly, Bonyongo confirmed under cross by Debswana lawyer John Carr-Hartley that he had a preferred candidate to succeed him as Debswana MD and that the candidate was “the late Mr. Albert Milton”. He said he did not present any other name to the Board of Directors. However, he disclosed that initially there were two candidates for the post, the other being Lynette Armstrong who is now Acting MD of Debswana. According to Bonyongo, Armstrong pulled out of the race in November of 2017 because she felt Milton “had the skills and competency to be the next MD”.
Taking the court through the process of appointment of a Debswana MD, Bonyongo said the Government of Botswana and De Beers decide as shareholders and their decision “is ratified by the Board of Directors”. Cross-examined by attorney Kgosietsile Ngakaagae for the plaintiff Mompoloki Motshidi of Infotrac, Bonyongo said he communicated his choice of preferred successor to the board and never formally communicated it to then Debswana head of security Mpho Kewagae or the Human Resource Manager, one Mazwigila.
He confirmed knowing President Mokgweetsi Masisi (then vice president), former director general of DISS Isaac Kgosi and the late governor of the Bank of Botswana and Debswana board member Linah Mohohlo, all of whom the MD of Infotrac, Mompoloki Motshidi, had said were lobbied to support Milton’s appointment. Although he said it was not to the best of his recollection, Bonyongo told Justice Tafa that he thought Mohohlo was still a member of the Debswana Board by the time he left Debswana in 2018.
To determine the case, the Turquand rule may be critical as Judge Tafa ordered both counsels to articulate what it entails and its significance to the case in their heads of argument to be delivered to him.
A simple reading of the Turquand rule states that when an outsider is contracting with a corporate in good faith, the assumption is that all internal processes have been complied with. The rule prevents a company from avoiding liability in an unauthorised contract due to non-compliance with an internal requirement. For Debswana, cogency hinged upon the reason that no proper process was followed when Mompoloki Motshidi of Infotrac was contacted to lobby for the appointment of Milton. Debswana held that the board would have been noticed of such a tender for it to be ratified before it is awarded.
By contrast, Infotrac held that the agreement with Debswana was verbal/oral and as such could not be written as Debswana stated that the covert operation was of a sensitive nature. He gave evidence to the court that several previous contracts with Debswana were done in that manner and paid without any hurdles by Debswana. If the judge rules in favour of Infotrac in the case that has exposed Debswana’s shenanigans to the public, Debswana will have to pay it the P110 million that it seeks. From spying on unionised employees to Hollywood-style influence peddling, the sheen came off on Debswana’s corporate governance.
Judgement due on June 16
Following the closure of the case, Justice Tafa has deferred the much anticipated judgement to 16 June 2022. “Judgement shall be delivered on the 16th of June 2022 at 9am,” the judge said. But before then, both counsels are expected to have delivered their written submissions (heads of argument) by the end of April.