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DCEO investigates former bank chief for alleged corruption

by Lesotho Times
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Staff Reporter

THE Directorate on Corruption and Economic Offences (DCEO) is investigating former Standard Lesotho Bank (SLB) Chief Executive Officer, Mpho Vumbukani, for allegedly breaching the bank’s procurement policies in connection with his purchase of a house from the bank.

Mr Vumbukani is also being investigated by the anti-corruption body for corruption after he allegedly “frustrated” payments by the SLB to wool and mohair farmers for their produce.

Mr Vumbukani, who made history by becoming the first Mosotho to head the SLB, resigned on 30 September 2019 after eight years in charge. A statement issued by the bank’s board of directors did not give any reasons for Mr Vumbukani’s resignation.

When contacted for comment this week, the DCEO Spokesperson, ’Matlhokomelo Senoko, said they were investigating Mr Vumbukani over his purchase of a house from the bank and for frustrating the processes of paying the wool and mohair farmers. Ms Senoko however, refused to give details for fear of prejudicing the investigations.

“All I can confirm to you is that Mr Vumbukani is being investigated on the issue of the house he is said to have purchased from the bank as well as the wool and mohair payment saga. That’s as much as I am able to tell for now,” said Mrs Senoko.

However, sources close to the investigations this week told the Lesotho Times that Mr Vumbukani is being investigated for alleged corruption after he bought the house from the bank and later rented it to the bank during his time in charge of the bank. He is said to have rented the house from 2012 to 2019.

According to the sources, the investigation stems from a 20 September 2012 decision by the bank’s board of directors to sell the bank’s house  in Maseru West to Mr Vumbukani for M3 320 000.

According to the deed of sale between SLB, represented by Mr Mopeli Mokhachane (now working in South Africa) and Mr Vumbukani, the property was sold to the latter for M3 320 000 “payable upon simultaneous registration of the mortgage bond in the name of Standard Lesotho Bank Limited”.

This allegedly in breach of the bank’s Fixed Asset Policy which states that the bank’s assets are disposed of only when they are damaged, no longer in use or have become obsolete and beyond repair or reuse.

The bank policy states that assets are disposed of when they can no longer be used for the original intended purpose. In the event of disposal of the bank’s assets, first preference is given to bank staff and thereafter all remaining items are either auctioned off to the public or donated to charities.

However, these policy guidelines were allegedly disregarded when the bank board authorised the sale of plot number 1228-495, House Number 1 in Tonakholo Road, Maseru West to Mr Vumbukani.  The same house was subsequently rented out to the bank from 2012 to 2019. The rent agreement lapsed on 31 January 2019.

The initial rent was M35 000 per month and it was later reviewed to M37 000 per month from 2016 onwards.

The transaction is said to be in contravention of Section 7 of Lesotho Procurement Policy of February 2018 which stipulates that employees, regardless of whether or not they have been hired on a permanent, fixed-term contract or consultancy basis, are not eligible to directly engage in business with the bank, either as vendors, subcontractors, sole proprietors or independent contractors during their appointment and for a cooling period of a year from the termination of their employment.

The sale of the property was subsequently investigated by a team of investigators from the Central Bank of Lesotho (CBL). As part of their investigations, the CBL team demanded copies of the SLB’s procurement policy documents but the SLB’s Compliance Department allegedly failed to produce the required documents to prove that the sale was above board.

Mr Vumbukani was not reachable on his mobile phone for comment.  The SLB’s spokesperson, Manyathela Kheleli, said they were “not aware that there are such investigations”.

The DCEO is also investigating Mr Vumbukani for allegedly receiving bribes from an unnamed foreign broker to frustrate payments to wool and mohair farmers.

The restive farmers staged protests against the government in the aftermath of the promulgation of the controversial 2018 wool and mohair regulations which bar them from selling their produce from outside Lesotho and through the brokers of their choice as they had done for 44 years until the promulgation of the regulations.

The new regulations directed that they sell their produce in Lesotho through the Lesotho Wool Centre (LWC) in Thaba-Bosiu which is partly owned by controversial Chinese businessman, Stone Shi.

The farmers have however, accused the government of conspiring with Mr Shi to impoverish them through delayed payments which are said to be far less than what they received when their produce was sold from South Africa, largely through that country’s brokers, BKB.

However, the government and in particular ministers, Chalane Phori (Small Business Development, Cooperatives and Marketing) and Tefo Mapesela have accused the Lesotho Revenue Authority (LRA), CBL and the SLB of sabotaging the payments to wool and mohair farmers for the sale of their produce “to make the government look bad in the eyes of the farmers and the general population”.

Messrs Phori and Mapesela said the government had introduced progressive legislation to localise the sale of wool and mohair to ensure farmers fully benefited from their produce. They said instead of supporting the government efforts, the CBL, LRA and the SLB had all conspired to sabotage the government to make it unpopular in the eyes of the farmers.

Mr Phori went as far as saying the recent resignation of “one of the local bank managers” was “good riddance” as the bank manager had contributed to the controversy in the wool and mohair.  Although Mr Phori did not mention the local bank manager who had resigned, this could have been directed at Mr Vumbukani, who resigned in September 2019.

“I am happy that one of the local banks’ managers has resigned. I am hopeful that his departure will breathe some fresh air into this (wool and mohair) project. In one of the meetings that the cabinet sub-committee (on wool and mohair) held with managers of local banks, he (the bank manager) told us point blank that he would not consider the proposals which were raised to speed up processing payments for farmers,” Mr Phori said.

Mr Mapesela, who was Trade and Industry minister when the regulations were promulgated in 2018, concurred with Mr Phori. He said the wool and mohair sales were sabotaged by the banks to discredit the government.

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