D-Day for MKM

Lesotho Times
4 Min Read

MASERU –– The fate of MKM, the company in which millions of money belonging to thousands of depositors is locked up, could be decided at a crucial meeting next Saturday.

The meeting is expected to involve the government, Central Bank of Lesotho (CBL) and MKM representatives.

A source said Finance Minister Timothy Thahane was expected to represent the government while CBL governor Moeketsi Senaoana was scheduled to attend as well.

Officials of Channel Life, the South African insurance company set for a bailout deal with MKM, are also expected to be part of the indaba.

“This meeting will decide the way forward. It will decide whether the company will have to pay-up, get bail-out or liquidated,” a source close to the issue said.

The meeting comes after MKM owner Simon Thebe ea Khale pleaded with Prime Minister Pakalitha Mosisili’s government to intervene to save his company from liquidation.

The CBL has been pushing for the liquidation of MKM, accusing the company of operating unlawful banking and insurance businesses.

PricewaterhouseCoopers (PWC), the auditing firm appointed by the central bank to probe the company’s operations, said MKM had failed to account for M300 million of the M400 million it collected from its depositors.

However, MKM has disputed the figures saying PWC had exaggerated the figures.

The company has been arguing that it is capable of making payouts to clients who invested in MKM’s schemes.

MKM said the PWC had relied on some documents whose policies had already been paid up.

MKM also suggested that some policy holders had died after registration.

The dispute over the figures forced MKM to appeal to the government to be allowed access to documents seized by the central bank November 2007.

MKM contended that some of the documents needed to be “interpreted” because its records were done manually.

The CBL initially refused to allow MKM access to the documents until the government, through Thahane, intervened.

MKM said the data capturing process, which is still going on, will enable the company to present a full proposal to Thahane on how it intends to make payouts to depositors.

MKM’s report is expected to be tabled at next Saturday’s meeting.

Both the central bank and MKM will submit their reports on how much is owed to depositors in the High Court next month for the court to make a final order.

However, sources said a clear direction will be made at next Saturday’s crucial meeting.

If liquidated depositors are unlikely to recover the full value of the amount they invested.

In most cases they will get a few cents out of everything that they invested.

In this case analysts say that the MKM depositors are unlikely to get more than 25 lisente for every loti.

Before paying the depositors the liquidators will have to deduct their costs and pay other creditors.

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