…over breach of M13.5 million loan balance
Mathatisi Sebusi
ENRICH Holdings has initiated arbitration proceedings against the Lesotho National Development Corporation (LNDC) demanding payment of the outstanding amount out of a M15 million loan agreement the two parties inked in January 2024.
LNDC is accused of breaching a loan agreement after allegedly failing to disburse the outstanding M13.5 million of the M15 million the corporation initially agreed to loan Enrich Holdings.
The Lesotho Times has seen a letter from Enrich Holdings to the Law Society of Lesotho (LSL) requesting arbitration, as stipulated under Section 12 of the loan contract, which requires disputes to go through arbitration before any court intervention.
“The request for arbitration is submitted on behalf of Enrich Holdings Limited, which is a public limited company incorporated in July 2019 under the laws of Lesotho,” part of the letter dated 2 October 2025 reads.
Enrich Holdings Chief Executive Officer, Peter Morolong, told the Lesotho Times this week that the company had resorted to legal recourse after numerous unsuccessful attempts to get LNDC to honour its contractual obligations.
Mr Morolong said LNDC’s failure to fulfil the terms of the agreement had caused severe financial distress for Enrich Holdings, including the loss of key assets that were later auctioned to recover debts.
According to him, LNDC only disbursed a small portion of the agreed amount before cancelling the contract altogether.
He said LNDC paid M1,466,539 directly to two of Enrich’s creditors — Moosa Group (M975,554) and P.E.G (Pty) Ltd (M490,985) — in what the Corporation described as an attempt to save Enrich’s assets and enable the company to resume operations.
“After the agreement was signed and the initial funds were disbursed in February 2024, Enrich moved into new premises near Pitso Ground in Maseru,” Mr Morolong said.
“The location proved ideal as our M100,000 stock sold out within days, and LNDC was pleased with the progress. However, delays in disbursing the remaining funds led to financial strain, and our landlord later sued us for rent arrears, resulting in the auction of some assets.”
LNDC–Enrich contract
Enrich Holdings approached LNDC in 2023 seeking M25 million to clear debts and recapitalise the business. LNDC engaged a transactional advisor who, after assessment, recommended a turnaround strategy that was “achievable.”
Based on this assessment, the LNDC board approved M15 million in quasi-equity support — significantly less than the requested amount — subject to strict conditions.
A loan agreement was signed on 31 January 2024 by LNDC interim Chief Executive Officer, Advocate Molise Ramaili, and Enrich Holdings’ then Board Chairperson, Thato Damane, with Mr Morolong signing as one of the witnesses.
According to the agreement: “The lender shall advance to the borrower (Enrich) a loan of M15 million, to be disbursed as follows: M6.5 million upon commencement for operational expenses, and M8.5 million into a call account to facilitate suretyship for the borrower’s suppliers. The loan shall be disbursed only when the conditions set out in Clause 7 are met”.
Enrich’s contention
Mr Morolong said Enrich Holdings met all the conditions in Clause 7 of the agreement, including providing collateral in the form of company assets.
However, he said LNDC later demanded that Enrich shareholders update their details with the Ministry of Trade, Industry and Business Development — a requirement the company could not meet immediately due to challenges of renewing expired national IDs amid a nationwide issuance crisis.
“LNDC issued an invalid cancellation of the loan based on Clause 8.3, which requires an up-to-date share register and proof of share contributions,” said Mr Morolong.
“This condition was met, as all relevant information was submitted to LNDC and its transactional advisor.”
Clause 8.3 of the loan agreement states: “The borrower shall provide a share register and certificates that are up to date, together with proof of contributions or acquisitions of shares”.
Mr Morolong added that LNDC also insisted that Clause 8.6 be fulfilled before any further disbursement.
Clause 8.6 reads: “The lender shall appoint two representatives to the borrower’s Board of Directors for oversight, one of whom shall serve as chairperson.”
When shareholder updates proved difficult, LNDC advised Enrich to establish a Special Purpose Vehicle (SPV) to act as a financing instrument for the loan.
The Special Purpose Vehicle (SPV)
Enrich Holdings’ board held a special meeting on 8 June 2024, where it was resolved that directors Thabo Qhesi and Paul Mosuoe would represent the company in the SPV.
However, Mr Morolong said a dispute arose when LNDC allegedly altered the agreed SPV structure.
“The SPV was registered as a new company called Enrich Investments (Pty) Ltd in July 2024,” he explained.
“Instead of serving as a financing vehicle for Enrich Holdings, it became a separate company — 90 percent owned by LNDC and only 10 percent by Enrich Holdings. This contradicted the loan agreement, which made Enrich Holdings the legal recipient of the funds, not Enrich Investments.”
In a letter to Adv Ramaili dated 18 November 2024, Mr Morolong cautioned LNDC about the implications of the new arrangement.
“Housing Enrich Holdings’ business activities under the SPV effectively renders Enrich Holdings dormant,” he wrote.
“Such an arrangement could be interpreted as a scheme to defraud creditors. It also breaches accounting principles since Enrich Holdings is legally required to prepare consolidated financial statements including all subsidiaries, which becomes impossible if the parent company is inactive.”
He further argued that the SPV arrangement misled shareholders, as it contradicted the original resolution approving an SPV solely as a financing mechanism — not as a takeover entity.
“If Enrich Investments assumes Enrich Holdings’ operations, it exposes the company to lawsuits from suppliers seeking to recover debts. Using Enrich Holdings’ assets to generate revenue through Enrich Investments constitutes asset and liability mismanagement.”
Violation of legal obligations
Mr Morolong said that in December 2024, LNDC proposed that the loan be disbursed into Enrich Investments (Pty) Ltd, instead of Enrich Holdings.
“This violates the terms of the loan agreement because the legal borrower is Enrich Holdings,” he said.
“The new proposal suggested that Enrich Holdings should find other means to service its debt obligations, which contradicts Clause 8 of the agreement. The objective of the rescue package was to settle all outstanding debts — a condition explicitly stated in the contract.”
LNDC’s justification
LNDC accused Enrich Holdings of failing to meet critical loan conditions. A detailed internal evaluation report seen by the Lesotho Times cites internal contradictions, leadership instability, and possible fraud risks within Enrich Holdings as reasons for withholding the funds.
According to LNDC, Enrich never submitted a complete and up-to-date share register.
The corporation claims that some known shareholders were missing and that certain shareholders intended to exit the company in exchange for payments — raising suspicions that the loan might be used for shareholder buyouts rather than business recovery.
LNDC maintained that the creation of the SPV was “the only viable mode of assistance” and formally requested Enrich to either accept or reject the proposal in writing.
When contacted for comment, LNDC Corporate Communication Manager, Tiisetso Moremoholo, said the matter was no longer a priority issue for the corporation as its coverage had already been exhausted in the media.
“Since the Enrich story has received wide media attention following the decision not to proceed with funding for reasons articulated in the story published by the Lesotho Times some time back, the corporation is now turning its attention to other activities and has since moved on from this issue.
“That said, as soon as I get the greenlight to unpack these new activities that I am mentioning, I will give you a call to explore the possibility to engage on them.
“We could also touch on the Enrich issue and the corporation’s development financing instruments overall, and the requirements. I will be back in office tomorrow (Thursday), and will follow-up on these activities that I have mentioned so that we can arrange an interview or pre-meeting,” Ms Moremoholo said.
