THE MKM saga is yet another stinking skeleton to come out of the Lesotho Congress for Democracy (LCD), later Democratic Congress (DC), closet. The long drawn-out saga like, many others that I will endeavour to highlight in this column, is one of the many monumental failures undertaken under the LCD/DC government over its 15-year tenure.
The massive business behemoth was set-up under the watchful eye and acquiescence of the said government. In as far as the setting-up of the funeral contribution scheme was concerned, it was a positive development for the entire nation. There is no doubt about that. However, as for the banking and insurance business, the Court of Appeal declared it was illegal. This was in violation of the Financial Institutions Act, 1999 and the Insurance Act, 1976.
To understand the gravamen of my argument that the failure of the MKM business empire is a result of the LCD-DC mismanagement of the country’s economy, the following brief synopsis of the saga needs to be established. Thereafter, I will enumerate the other monumental economic and social failures of the LCD-DC government and how the outgoing coalition government inherited a poisoned chalice in this regard. All these failures that I will set-out hereunder were time-bombs the coalition government was sitting on, waiting to explode.
It is, therefore, disingenuous for the DC–LCD and other like-minded political parties to try to make political mileage out of a glaring failure whose establishment they acquiesced to despite its obvious potential shortcomings, no matter how good the intentions of its directors. MKM was shut-down in November, 2007 after the Central Bank of Lesotho (CBL) approached the court stating that the firm, inter alia, was operating an insurance and banking business in violation of the aforementioned pieces of legislation.
The CBL further commissioned investigations conducted by South African firm, Pricewaterhouse Coopers, which revealed that of the M400 million invested by depositors, MKM could only account for M100 million in assets that included buildings and vehicles.
The CBL then applied for MKM’s liquidation in the High Court arguing the company was insolvent as its liabilities were much more than its assets. The application was granted by the High Court and upheld on appeal, by the Court of Appeal, in October, 2011.
The fate of MKM was, therefore, finally sealed, legally at least, during the tenure of the LCD-DC government. In fact, by his own admission, then finance minister in the congress government, Timothy Thahane, reportedly admitted this week that he instigated, together with the late governor of the CBL, legal proceedings against the company. The former minister says at some stage in the unfolding of the saga, owing to threats against his life and that of his family, he withdrew his participation in the saga.
It is common knowledge that politicians, especially cabinet ministers, are always in danger of being attacked and therefore provided with state security round the clock. If Dr Thahane thinks this is adequate enough reason for his sudden withdrawal from the saga, which he in fact initiated, then he thinks this nation leaves in a fool’s paradise. In short, he is undermining our intelligence as a nation. Why did he not resign from cabinet altogether?
The only reasonable inference that can be drawn from this lame excuse is the simple one that he realised this was an intractable saga.
Furthermore, he most likely took into account the fact that the 2012 general elections were to be held in a few months’ time. These elections would usher-in a new government that would, immediately upon assuming office, inherit the poisoned chalice of the MKM and a litany of other congress economic failures. The DC never imagined they would be voted out of office. Once they returned to power after the elections, they would have passed the buck for a further five years. MKM and other failures, I will hereunder enumerate were economic and social failures they would keep on avoiding as long as they were still in power.
The then DC government and, in particular, the then minister of finance would not risk their political careers and, therefore, their re-election at the upcoming polls, by enmeshing themselves in the intractable MKM saga. If they continued their engagement in the MKM saga just prior to the elections, they would never be re-elected. They, therefore, let the saga remain under the rudder until they were re-elected. Coincidentally and conveniently the saga is raising its ugly head again when a general election is on the horizon. Yet the congress brigade is trying to use it for political mileage.
The fact of the matter is the MKM saga is not a creation of this government. It is a creation of the previous LCD-DC government that acquiesced to its establishment. In fact, the congress government was long advised there were some serious violations of the law in the banking and insurance operations of MKM. These are the words of the former finance minister. Yet, that government did nothing to bring illegal business to account.
However, it knowingly facilitated the illegal operations of MKM, as declared by the Courts, by allowing civil servants to take out stop orders so they may invest in the scheme. In fact, the majority of the depositors in this scheme were from the disciplined forces, police, army, prison services, public servants and even then government’s cabinet ministers.
In a strange coincidence, when then DC cabinet came to know that MKM was about to be liquidated, some authority advised all the cabinet ministers to withdraw their deposits and interests from the scheme. This they surreptitiously and selfishly did without warning the entire nation. The lifetime savings of the already impoverished Basotho were sucked into the scheme forever. Their elected representatives never informed the hapless and unsuspecting nation of the impending disaster.
That is the LCD-DC congress brigade for you. They never care for this interests of nation. They care only about themselves. They are an arrogant movement whose only interest is self-aggrandizement.
The bottom line is MKM is a national institution that benefits all Basotho irrespective of political persuasion. No self-respecting politician needs to make political mileage out of a well-intentioned but somehow mismanaged business gone horribly wrong, to go down the drain or into the hands of foreigners.
MKM needs political intervention to save it so that M400 million owed to poor Basotho can be re-paid to them. Government needs to figure-out how to save the situation. It is in the best and sustainable interests of all Basotho that MKM is saved, though it is a tough ask.
In more or less similar magnitude, here are some of the massive stinking skeletons from the congress government closet that still haunt this nation to this day. They are, in no order of magnitude or priority.
First, the multi-million maloti, Block Farming Scheme that was intended to benefit poor farmers but ended up benefitting members of the LCD-DC government. The government was cajoled to act as guarantor. To this day, those loans have not be repaid by the concerned congress politicians.
Second, contrary to recommendations to the contrary, the congress government closed Queen Elizabeth II Hospital in Maseru. Instead of preserving it as the Maseru district hospital the closure resulted in the massive and unmanageable inflow of patients at the newly-opened Queen ‘Mamohato Memorial Hospital. Queen II was only re-opened about a month ago by the coalition government.
Third is the election of Lieutenant-General Tlali Kamoli to the army command three months prior to the 2012 general elections. As a result, in keeping with his mentors and political master’s wishes, Lt Gen Kamoli remains obstinate despite a legitimate government gazette ordering his relinquishing command of the army. In fact, his conduct is saying the army is above the law despite some members of the army being wanted by police with their investigations on attacks on three Maseru homes. Lt Gen Kamoli refuses to release them to police.
To Lt Gen Kamoli’s elevation add Selibe Mochoboroane’s refusal to be fired from His Majesty’s cabinet. Despite a legitimate government gazette, as is the procedure, removing him from his post, Mr Mochoboroane is refusing to vacate office. And to add insult to injury, he disrespects His Majesty and the congress brigade supports both men to the hilt.
Fourth, under the LCD-DC government, corruption was rampant and had reached uncontrollable levels. Key among the allegedly corrupt individuals, are Cabinet ministers and officials of the previous government. In fact, if truth be told, the coalition government is on the way-out because of its tough stance on corruption.
Fifth, Nikuv National Identity and Passport multi-million maloti scandal. The M300 million-plus project was snatched from under the noses of the then Millennium Challenge Authority (MCA), who were administering it by the then congress government only to mess it up with a series of corruption allegations. To this day, this massive project still haunts the incumbent government. As if that was not enough, this nation is forced to pay over M30 million maintenance of the dysfunctional system and presently no passports are being printed severely hindering cross-border movement and identification of every Mosotho.
Sixth, the National Convention Centre, affectionately called ‘Manthabiseng Centre, is leaking like a sieve to the extent that it has for months ceased hosting any events.
Seventh, Moshoeshoe I International Airport, our only airport, has long been declared by the International Air Transport Association unsafe for aircraft to use due to many years of neglect and non-maintenance. Only South Africa Airlink ventures to use our flagship airport and this only a regional airline.
There are many more monumental failures that successive congress governments have been responsible for. The MKM saga is only one of the many. If you do not know the number of the many congress failures and their detrimental effect on the (economic) well-being of this nation, watch this space for more startling revelations. Many more shocking ones are on the horizon waiting to be unravel. These ones are just the tip of the iceberg in the congress mis-governance.