…promises to make first M500 000 payment in February
Moroke Sekoboto
CONTROVERSIAL textile outlet, Lugy’s Manufacturing’s Acting Managing Director, Mairoon Adams, has pleaded with the Public Accounts Committee (PAC) to grant her three more months to repay the M2 million loan obtained from the Lesotho National Development Corporation (LNDC).
Appearing before the PAC yesterday, Ms Adams promised to make the first payment in February 2026. The loan was extended to Lugy’s Manufacturing in March 2023 to support the Matlafatsa Basotho incubation project for garment manufacturing.
Lugy’s Manufacturing had been given 90 days from March 2023 to repay the first instalment of M666 000. Ms Adams claimed the company failed to meet the deadline after incurring losses. She said they received an order within the 90 days and purchased more fibre, but the second order fell outside the timeframe 90-day timeframe, leading to losses. She further argued that although the company had defaulted on the LNDC loan, it had hired 600 people—making a significant contribution to job creation.
“We should have made a profit, but we didn’t because we had to halt our operations. I was shortsighted in asking for 90 days. We made a loss also because LNDC interrupted our production time. They halted our operations by rehabilitating the factory building we were working from,” Ms Adams said.
She added that the facility’s rehabilitation forced them to close operations and that the LNDC had since taken legal action over the unpaid loan.
“I am not refusing to pay the money. I am asking for an extension because our operations were halted. After receiving the money we purchased fabric for our first order, but we couldn’t repay the loan as the payment for the order came within the 90-day period. We were still trying to secure potential buyers,” she said.
“We got a second order immediately and we couldn’t release the workers. The second order was unsuccessful because it did not generate the M666 000 needed for the first payment to LNDC. We ordered a lot of fabric but failed to sell the products on time; hence we need extra time,” Ms Adams added.
“I have production that has passed its timeline. I didn’t know I had to bring South African documents here. I can promise to pay around M500 000 in February because it’s already December and orders are not coming through.”
However, PAC Chairperson Machabana Lemphane-Letsie dismissed Ms Adams’ claims of loss-making, saying she had not provided documentary evidence to support letters she wrote to LNDC regarding the setbacks. She instructed Ms Adams to produce invoices, proof of payment for fabric purchases, and other relevant documents at the next meeting.
“We need to see the transactions. You cannot just write to LNDC requesting an extension; you must substantiate your request with supporting evidence showing why you are unable to pay. We are now at the end of 2025. It is not true that Lugy’s Manufacturing is the only company creating employment for Basotho,” Ms Lemphane-Letsie said.
“What you are telling us is just stories because there is no documentary evidence attached to the letters you gave to the committee. We need to see the documents; we cannot go in circles. We will call you again in March and you must come with proof of payment. We are not interested in matters ending up in court—our job is to ensure that public funds are used for their intended purposes. Tomorrow, bring legitimate proof of payment and invoices.”
Another PAC member, Lephoi Makara, insisted that the company did make profits.
“You made profit out of the consignment. Whether you sold half or the entire consignment, your cost of sales indicates that you definitely made a profit—you had closing stock,” Mr Makara said.
PAC member, Motsi Lehata, said while they noted her promise to pay in February, they were equally concerned about whether proper procedures had been followed in granting the loan.
“We hear you will pay in February, but we also need to know whether LNDC loans go where they are needed and can make a meaningful impact for Basotho. Failure to produce proof of payments or invoices for the fabric is a concern. We need documents showing that the money was used for the intended purpose. LNDC gives people loans, but often they are not used accordingly. Controls at LNDC must be strengthened,” Mr Lehata said.
Ms Adams had failed to appear before the PAC on numerous occasions, with the PAC even calling for her arrest last month.
She was again in May this year accused of exploiting her workers by cutting their salaries without any explanation.
