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MKM investors issue payment ultimatum

by Lesotho Times
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  • pay us by September 2018, investors tell the Central Bank
  • investors also petition PM Thabane and political parties for assistance

Pascalinah Kabi

LOCAL investors have petitioned Prime Minister Thomas Thabane’s governing coalition and opposition parties to demand that the Central Bank of Lesotho (CBL) pay them the millions of maloti they lost when the apex bank closed MKM in 2007.

The investors have demanded to be paid the “full amount of money we had with MKM at the time of its liquidation”. They claim that this money represents the value of their investments that they say had since matured and “for which we are awaiting payment and (other) pay-out money from our burial policies”.

“Whatever costs the CBL may have incurred through its mismanagement of this whole project, we consider to be costs to the CBL and not our responsibility,” wrote Tšeliso Manyeli on behalf of the MKM investors.

We thus do not expect to see any reductions in our claims to represent costs not authorised in the original court order (such as costs incurred by persons who were not engaged by CBL),” Mr Manyeli further stated.

Mr Manyeli has been a representative of the MKM investors in the long-drawn out saga since 2008 when the MKM issue was taken to the courts by the CBL.

“Apart from Dr Thabane and his All Basotho Convention (ABC) party, the investors also petitioned two of the three other parties in the governing coalition, namely Deputy Prime Minister Monyane Moleleki’s Alliance of Democrats (AD) and Communications Minister Thesele Maseribane’s Basotho National Party (BNP).

They also petitioned the opposition Democratic Congress (DC), the Lesotho Congress for Democracy (LCD) and the Basotho Congress Party (BCP).

The investors seem to be leaving no stone unturned to recover their money. They have also sent similar petitions to the CBL Governor Retšelisitsoe Matlanyane, the Speaker of Parliament Sephiri Monyane and the Senate President ‘Mamonaheng Mokitimi.

The MKM saga has run for many years now after the Ponzi scheme was shut down in November 2007 by the CBL after it emerged the company was operating banking and insurance businesses in violation of the Financial Institution Act 1999 and Insurance Act of 1976.

A CBL-commissioned investigation conducted by South African firm, PricewaterhouseCoopers,  revealed that of the M400 million invested by depositors, MKM — comprising MKM Marketing Ltd, Star Lion Group Ltd, Star Lion Insurance Ltd and Star Lion Gold Coin Investment (Pty) Ltd — could only account for M100 million in assets that included buildings and vehicles.

And in a recent petition to Dr Thabane, Mr Manyeli requested that “you and the government kindly assist to have the CBL pay the money as they promised in their approach to the High Court in November 2007…”

“Your Excellency… the investors (albeit not all but a good majority) have authorised me and my team to lead them in this matter. We did represent them in court in 2007 until sometime in 2009 when the court refused to hear our case.

“My team and I stand ready to work with you and the rest of your colleagues in government to have this matter resolved as soon as possible.”

Mr Manyeli said the investors rejected their classification as MKM creditors, arguing that they did not sell anything to MKM for which the fallen company owes them.

Instead, Mr Manyeli explained, the investors “are ordinary citizens who are customers of MKM after they took advantage of the financial services provided by MKM”.

At the heart of the investors’ grievances is the fact that for the past 10 years since MKM was closed by the CBL, they have been made to suffer for a dispute between the CBL and MKM over the latter’s alleged breach of licensing laws.

The investors claims that prior to its closure, MKM was solvent and regularly paid them vindicated recent claims by the MKM director, Simon Thebe-ea-Khale, that MKM was solvent and could afford to pay its creditors before it was shut down.

“I have always maintained that I owe creditors M65 million but people who were out to get me exaggerated the amount because they wanted to make me look bad. We have enough monies to pay back our creditors and we are planning to start effecting payments beginning in September 2018.

“We are sure that rentals collected from our FBN property has accumulated to more than M20 million by now. That money together with M30 million that was taken by the Central Bank of Lesotho in 2007 will be enough to pay back creditors their hard-earned monies,” Mr Thebe-ea-Khale told the Lesotho Times last month.

This week, Mr Manyeli said it was the CBL and not the investors, who had a problem with MKM which led to the company’s closure in 2007.

“It is the CBL who had a problem with MKM… We (the investors) were not party to that dispute which ended with the liquidation of MKM other than in defence of our interest to have our money returned to us.”

Mr Manyeli said before its closure, MKM regularly paid them and after shutting down its operations, the CBL had a duty to ensure that they were paid what they were owed.

Mr Manyeli further said that many years had passed without the investors being paid or even receiving communication on the issue from the CBL.

He said the failure to pay them was despite the fact that MKM properties and cash had been impounded and some already sold.

“We have not heard of a single payment made to an investor from the MKM liquidation… The CBL appears to have relinquished to the Master of the High Court its responsibility under the liquidation order it requested and was granted.

“Very large sums of MKM-in-liquidation funds appear to have been paid out to persons other than investors. The whole purpose of liquidating MKM was to have the money found to have been illegally obtained (by MKM) returned to the people who contributed it. It is as if the liquidators have been paying themselves and their associates with no concern for the investors for whom they would have been deployed.”

Mr Manyeli said as a result, the investors had lost confidence in the CBL’s ability to fulfil the mandate “it requested and secured from the court to get the money illegally taken from us and pay it back to us.”

“Ten years is to us a very long time for the CBL to have completed what had to be done to have our money returned to us and we do believe that the CBL has completed that work.

“We have since November 2007, when the CBL stopped the operations of MKM, suffered financially and emotionally with some of our colleagues having died and others suffering serious mental and physical harm.

“In this petition we humbly ask that you (Dr Thabane and the government) arrange to have our money from MKM returned to us by the end of September 2018.

“In light of what we see as CBL’s dismal failure to carry out the mandate it requested and was granted by the court, and considering the fact that we retain a high confidence in the ability of MKM to handle out money well, we want the money due to us channelled through MKM having satisfied itself that the statement handing over those funds conforms to their records,” Mr Manyeli said.

He said the investors’ plight was compounded by the fact that despite a 2011 court order, which clearly established their right to be paid, the CBL had kept them in the dark as to when they would be paid.

The investors appealed to the ruling and opposition parties to join hands and in pushing through legislation to ensure that they are paid.

“We are confident that you realise that among us there are many people who belong and have voted for your parties who are affected by this MKM fiasco. These are people who have been denied access to their personal savings for a period that has passed 10 years.

“We very humbly request that you join hands with the government to help it find a solution to this problem… We make this request because we note that this matter started as a judicial matter that did not seem to be pregnant with issues that would threaten our interest as investors but now the same judiciary is taking actions that appear to be threatening our very right to the money we held with MKM. Should the government require the support of your parties to get parliament to approve funds for this purpose, kindly oblige.”

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