. . . as burial society faces collapse

MASERU — MKM Burial Society might soon fail to bury some of its members because of a crippling financial crisis.
There are now fears that bodies might start piling up at the society’s mortuaries across the country.
On average MKM, which is the country’s biggest burial society, buries between 60 and 70 bodies a week.
This is up from between 30 and 40 bodies it used to bury per week two years ago.
The Lesotho Times can reveal that most of the assets bought by contributions from burial society members are housed in Star Lion Gold Coin Investment, the company that is now being liquidated.
In other words the liquidation will affect the burial society.
In fact when it comes to assets there is really no distinction between Star Lion Gold Coin Investment and MKM Burial Society itself, they are literally one and the same thing.
The burial society is therefore worth nothing without Star Lion Gold Coin Investment.
After Justice John Musi’s May 18 judgment that ordered the dissolution of the MKM group of companies the liquidators immediately took over most of Star Lion Gold Coin Investment’s buildings.
They could soon start getting the rentals unless Appeal Court president Justice Michael Ramodibedi, who is expected to hear MKM’s application for a stay of execution on Saturday, rules otherwise.
Investigations by this paper have revealed that nearly 90 percent of the properties owned by the MKM group are in Star Lion Gold Coin’s books.
These assets include MKM’s largest mortuary in the Maseru Industrial as well as five other morgues in Mafeteng, Qacha’s Nek, Teyateyanang, Mohale’s Hoek and Maputsoe.
The Agric Buildings in Mokhotlong, Leribe and Mohale’s Hoek are also on Star Lion Gold Coin Investment’s balance sheet.
The company also has more than 60 commercial and residential properties scattered across the country.
The burial society, as an entity, does not own a single building.
The Agric Building which now houses First National Bank (FNB) is owned by Star Lion Group, another of the companies under liquidation.
The unoccupied building along Pope John Paul II Street is owned by Star Lion Insurance which is also being liquidated.
Since the closure of some of his businesses in November 2007 by the Central Bank of Lesotho (CBL) Simon Thebe-ea-Khale has managed to sustain the burial society with rentals from these buildings.
The rentals have enabled him to keep his mortuaries running while also paying suppliers of caskets and tombstones.
It is because of that income that he has also managed to keep paying salaries, albeit intermittently.
But now that the liquidators are about to take over those buildings Thebe-ea-Khale might find himself without the much needed revenue to keep the burial society running.
Without that money he will not be able to keep the mortuaries running and pay major suppliers.
That would mean the MKM Burial society will be unable to bury its members. The liquidators have since notified tenants in all MKM’s buildings that they must start paying rentals to their agent this month.
Thebe-ea-Khale’s troubles have been worsened by the fact that when his companies were barred from trading some burial society members immediately stopped paying their monthly contributions.
“Very little has been coming into the burial society by way of monthly premiums,” said a senior official who has intimate knowledge of the group but refused to be named for professional reasons.
“Thebe-ea-Khale wouldn’t be fighting so hard if all he was set to lose was the Agric Bank building and the one along John Paul II Street. The truth is that he will lose everything if the liquidation goes ahead,” the official added.
Central to the burial society’s trouble is that all its assets are in Star Lion Gold Coin Investment.
This happened because from 2000 onwards Thebe-ea-Khale designed the scheme that was closely intertwined with the burial society operations.
In order to join some of his investment schemes one had to be a member of the burial society first.
In other words one couldn’t join the bursary scheme, now known to have been a Ponzi scheme, without being a member of the burial society.
Buildings and other properties were then bought under Star Lion Gold Coin Investment.
Rentals from the buildings were used to help burial society members as well as paying out the illegal schemes that would have matured.
At the same time contributions from the burial society and the investments from the other schemes were used to acquire the assets.
All this was done under Star Lion Gold Coin Investment which Justice Musi said should be liquidated.
If the Star Lion Gold Coin Investment assets are sold the burial society will be left with nothing apart from the revenue that is still trickling in from those people that are still paying their premiums.
Thebe-ea-Khale said he did not want to talk about the MKM Burial Society’s operations because the matter is still being handled by the courts.
MKM Burial Society’s looming financial problems come in the same week that a South African burial society announced that it had raised M2.5 billion to help out the troubled group.
Iketsetseng Family Life and Burial Cooperative Limited said it was prepared to recapitalise the burial society and repay the nearly 400 000 people that lost their monies in MKM’s schemes.
An audit report commissioned by the central bank said only M100 million of M400 million that MKM received from investors could be accounted for.
There are however doubts about the realness of Iketsetseng Family Life and Burial Cooperative Limited’s offer.

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