ONE of the companies in the Tšepong Consortium, Afri’nnai Health, has accused South Africa’s Netcare Group of siphoning millions of maloti from the company under “dubious and unexplained circumstances”.
Netcare has a 40 percent stake in the Tšepong Consortium which operates the Queen ‘Mamohato Memorial Hospital (QMMH) in Maseru. Four other companies, namely, Afri’nnai of South Africa, Excel Health, Women Investment and D10 Investments (all from Lesotho), hold the balance of the shares.
QMMH is facing serious financial challenges which the minority shareholders have blamed on Netcare’s alleged financial impropriety which has seen it make making unauthorised payments to Netcare, Botle Facilities Management and some unknown persons.
Netcare General Manager (Finance), Christoffel Smith, denied any wrong-doing on his company’s part and last month, he applied to the High Court to place the Tšepong Consortium under urgent judicial management, arguing that a failure to do so would land Lesotho in a “sovereign debt crisis”.
Mr Smith said the consortium was in serious financial distress and owes its creditors, who include the Development Bank of Southern Africa (DBSA), more than M320 million. He warns that this could balloon by a further M90 million.
However, Afri’nnai Health shareholder, Professor Lehlohonolo Mosotho, recently shot back and accused Netcare and Mr Smith of have diverted substantial payments from the consortium and making unauthorised payments to Netcare, Botle Facilities Management and other unknown persons.
In his answering affidavit to Mr Smith’s application for judicial management, seen by the Lesotho Times, Prof Mosotho accuses Netcare of siphoning money out of the consortium and paying out a total of M312 million without the approval of the board.
He alleged that Netcare paid itself M201 million in just nine months.
He said the amount was way more than the M161 million that Netcare had submitted to the Tšepong board as its management fees in the 2017/18 financial year.
Prof Mosotho also alleged that Netcare paid Botle Facilities Management M47 million between January 2018 and May 2019 without the approval of the board.
Netcare owns shares in Botle which is responsible repairs and maintenance services at QMMH.
Prof Mosotho accused Mr Smith and Netcare of vehemently opposing a forensic audit into the affairs of the consortium because they were fully aware that the net was closing in on them.
“On 4 February 2019, the applicant (Smith) and Netcare transferred M34 054 231, 75 to an unnamed person who we suspect is Netcare.
“In particular the applicant spearheaded a disastrous plan and scheme of siphoning the funds of the respondent company to the two companies, in which he stood to gain financially.
“We (Tšepong Board) decided to mount a forensic audit, which is opposed by the applicant and Netcare because they are aware that they siphoned funds that were not due to them to the prejudice of the respondent (Tšepong Consortium) and its financial obligations.
“On 14 March 2019, the date when the applicant (Smith) suggests the respondents was unable to pay its financiers particularly the Development Bank of Southern Africa (DBSA), it actually made two payments amounting to M56 972 378, 55. On the same date the applicant paid Botle M9 064 788, 57,” he said.
He said that the Botle payment was followed by a transfer of M4, 3 million to an undisclosed person and another payment of M237 978 was made to another unknown person on 19 March 2019.
Prof Mosotho said there were three more transactions that same month totalling M24 million, another transfer of M20 million to unknown person in April 2019 and another transfer of M24 million to undisclosed persons in May 2019.
He says Mr Smith stood to gain employment income and other benefits from Netcare and directorship fees as well as allowances and other benefits from Botle.
Meanwhile, Netcare is challenging a board resolution appointing Advocates Qhalehang Letsika and Selebalo Lekokoto to represent Tšepong in the judicial management case. The challenge is premised on the grounds that Netcare was not represented at the 19 December 2019 board meeting which approved the appointment of the two lawyers and therefore those who attended did not constitute a quorum.
“Tšepong’s directors are advised of a resolution that was adopted on 19 December 2019 to oppose the (judicial management) application, and it would appear that the appointment of Advocates Letsika and Lekokoto is sought on the back of this resolution.
“We have been instructed to inform you that insofar as the purported resolution of 19 December 2019 is concerned, clause 13.6.1 of the Shareholders Agreement provides that: ‘A quorum at any board meeting shall be any three directors, save that a quorum must include one director who has been nominated by Netcare, present at the commencement and for the duration of the meeting,” Netcare’s lawyers, Werksmans Attorneys, state in their recent letter to the Tšepong Board.