…as PAC accuses it of mismanaging gvt funds
Mathatisi Sebusi
THE Lesotho National Development Corporation (LNDC) has been accused of mismanaging the government’s assets, resulting in its failure to declare dividends to the State.
The LNDC is the parastatal through which the government controls most of its investments. It stands accused of failing to collect a whopping M279 million in outstanding rentals from its tenants.
All this came to light during a Public Accounts Committee (PAC) hearing, where the LNDC faced accusations of abusing revenue from state owned assets – it is tasked with managing – for the personal enrichment of its staff and for lavish international trips.
The PAC had summoned the LNDC and the Ministry of Trade, Industry, and Business Development to respond to issues raised in Auditor General ‘Mathabo Makenete’s report, titled “Report of the Auditor General on the Consolidated Financial Statement of the Government for the Year Ended 31 March 2022”.
The report flagged the poor management of government-owned assets, including infrastructure, property, and equipment, as a key concern, highlighting that many assets lay abandoned or dilapidated.
The PAC Chairperson, Machabana Lemphane-Letsie, complained that the LNDC had been given excessive control over some of these government assets and was failing to account for them. She claimed the assets neither benefited the government nor the Basotho people. Instead, she alleged, the money collected from them was being spent on lavish international trips and for personal enrichment.
The visibly frustrated Ms Lemphane-Letsie vowed that the PAC would not allow the LNDC to continue “misusing” public funds and spending government money as it pleases.
“So, tell me, does the LNDC Act give you the power to do as you please with public funds? How does the money collected from government assets benefit the people? And have you ever declared dividends to the government?” she asked the LNDC representatives.
Ms Lemphane-Letsie further alleged that LNDC spends significantly on international travel, with a budget three times larger than that of the government’s entire travel budget. She demanded LNDC’s Legal and Administration Services Manager, Florence Motoa, to submit a detailed report on the number of government assets under the LNDC’s control. Ms Motoa was representing the LNDC’s acting Chief Executive Officer, Molise Ramaili, who was not present.
“You do not even collect rent. You let other people use the property for free and even transfer it as you wish. You have never declared dividends to the government. Why is that? Is it because there’s nothing to declare, or have you decided to do as you please with the money?”
Ms Lemphane-Letsie also pointed out that the LNDC has collected dividends from companies such as Loti Brick, Avani, and Maluti Mountain Brewery, yet has failed to declare any to the government. She demanded that LNDC and the Ministry of Trade representatives write a detailed report of the rental arrears owed to LNDC, to be presented to the committee later in the evening.
“We are going to leave you in this committee room so that you can write this report, detailing names and amounts of rent owed to LNDC. The report should also specify the dates the properties were leased,” Ms Lemphane-Letsie said.
When asked about how LNDC had used the money it collected, Ms Motoa claimed that LNDC had initiated a water project at Ha Belo, which is currently ongoing, and had also contributed to an electricity project. However, the committee was sceptical of her claims and accused her of attempting to protect LNDC.
Another PAC member, Montoeli Masoetsa, directly refuted Ms Motoa’s assertions, calling them untrue and exaggerated. He further stated that the Ministry of Energy had been allocated millions of Maloti for the same project Ms Motoa claimed LNDC had contributed to.
“What you’re saying contradicts what we saw there. We visited the site with the economic cluster committee. Please provide us with evidence so that we can confront the Ministry of Energy about this matter,” Mr Masoetsa said.
Ms Motoa said the LNDC was guided by the LNDC Act of 1991, which authorised them to spend the money collected from government assets and property towards the development of the country. She admitted that, to her knowledge, LNDC had never declared dividends to the government.
“To my knowledge, LNDC has never declared dividends to the government. LNDC is a government entity and is supposed to declare dividends. However, LNDC can use the money under the guidance or directive of the LNDC board (to develop the country),” she explained.
When asked about the exact amount owed to LNDC, Principal Secretary at the Ministry of Trade, Industry, and Business Development, Palesa Motobako, revealed that upon assuming office two months ago, she had requested a report on the rental arrears. She said she only received a figure of M279 million a week ago, but the report lacked crucial details such as the names of the tenants, dates, and locations of the properties in question.
Ms Motobako also said that she was working to identify the individuals and entities that owe rent to LNDC and for how long they have been in arrears.
The absent Advocate Ramaili was reported to be on sick leave.
