MASERU — The management of Boliba Savings and Credit (BSC) says some members of the co-operative are plotting with the government to shut down the bank.
BSC is owned by Boliba Multipurpose Co-operative Society (BMCS) which is owned by 50 Basotho who invested varying amounts when it started a decade ago in 2000.
BSC’s acting chief executive officer, Mosehle Khalema, told the Lesotho Times this week that some senior members of the co-operative “have been leaking confidential information to the Ministry of Finance and the Central Bank of Lesotho (CBL) with the intention of influencing them to shut down the bank”.
Over 48 000 people hold accounts with the bank.
Its closure could have a serious impact on the economy and people that bank with it.
The co-operative’s chairperson, Leonia Mosothoane, and another board member, Mohau Lebakeng, also alleged that there was a conspiracy to shut down the financial institution.
According to Mosothoane ,the group that wants the BSC shut down is led by Matsobane Putsoa, a member of the co-operative and Teboho Sopeng, the former BSC boss who was suspended in February for allegedly tinkering with the bank’s financial statements.
Putsoa, an accountant by profession, was leading a special sub-committee established by the BMCS to find ways of transforming BCS into a fully fledged financial institution.
Currently the BCS is owned by a co-operative and is not registered as a financial institution according to the Financial Institutions Act which regulates other banks in the country.
Under the law only companies can own banks.
The committee’s mandate was to make sure that the BSC complies with the law.
Mosothoane told the Lesotho Times that Putsoa is now using the confidential information he gathered during his time in the commission to get the bank closed by the government.
This, Mosothoane alleged, was part of Putsoa’s plot to wrestle control of the BSC from the other members of the co-operative.
“It is Putsoa’s effort to ensure that there is a run on deposits which will lead to us closing down,” Mosothoane said.
Mosothoane said four members of the BMCS, whose names she declined to mention, were working with Putsoa and some government officials to mislead the people into believing that BSC is insolvent.
“One of those members was our chief executive officer whom we suspended in February because we suspected that he was dishonest.”
She said Sopeng was working with Putsoa because he was suspended after he allegedly “fiddled with the financial statements prepared by a local firm of accountants to make BSC appear insolvent”.
After suspending Sopeng, the BMCS established a commission of inquiry comprised of a lawyer, two investigators and two accountants to analyse the figures in the financial statements.
“We believed that the CEO had tampered with the financial statements to make us appear insolvent,” Mosothoane said.
“We have evidence that he was working with the Central Bank and others in the government who wanted to see us closing down.”
But Putsoa has denied Mosothoane’s allegations and is instead insisting that the BSC is indeed in a financial crisis after members of the co-operative failed to repay the M17 million they owe the bank in loans.
He said there were genuine fears that the bank could go down because the co-operative members had borrowed money belonging to customers that bank with the BSC.
Putsoa said the BSC “carelessly gave loans to members and now it can’t collect the debts.”
Putsoa, a former senior accountant at the National University of Lesotho who is privy to the financial state of the BSC because of his work in the transformation committee, said the BSC’s books “reveal that it is insolvent.”
Putsoa said the CBL offered a rescue package of M10 million to facilitate the transformation of BSC into a bank but the plan hit a brick wall after the responsible ministries failed to agree on what should be done.
“The transformation process stopped and that put the BSC at a greater risk of being closed,” Putsoa said.
“Firstly, its audited books have shown that it is insolvent and secondly, it is operated contrary to the Financial Institutions Act.”
Putsoa said he was working together with the CBL governor Moeketsi Senaoana to ensure that the BSC would operate lawfully and also have capacity to collect its debts.
He said the CBL wanted to “protect” the BSC by acquiring its shares temporarily and help in its management for a period ranging between three to five years “while we are cleaning our mess.”
“We were to remain the owners and once things come to normal the Central Bank would withdraw,” Putsoa said.
Mosothoane however denies that the members owe M17 million to BSC.
Yesterday afternoon, she produced documents showing that members had paid up their loans and their debt was now only about M2.9 million.
“Those who are hesitant to pay back their loans have been sued in the High Court and very soon their cases will be heard,” Mosothoane said.
“It is not true that we are unable to recover the loans.
“Misleading statements such as this are meant to portray us as insolvent in the eyes of our customers.”
Sopeng declined to comment saying his lawyer had advised him against talking to the press.
“I am planning to sue them (BMCS board) for defamation of character and therefore my lawyer has advised me that I should not talk to the press,” Sopeng said.
The finance ministry’s principal secretary, Mosito Khethisa, denied that his ministry was part of a conspiracy to shut down BSC.
“We do not have that in mind,” Khethisa said.
“All we need is Boliba to comply with the law.”
Senaoana was not available for comment.