IN November 2007, the Central Bank of Lesotho (CBL) shut down MKM for operating a banking business without a licence.
The central bank said MKM was also operating a money multiplication scheme in violation of the country’s banking and insurance laws.
The country is still trying to come to terms with the consequences of that reckless scheme that caused so much pain and anguish to almost a quarter of Lesotho’s 1.8 million people.
But hardly three years down the line it’s clear some people learnt nothing and forgot nothing from that horrendous experience.
Ordinarily, we would expect people to be much wiser now in light of the MKM saga.
That scandal should still be fresh in the people’s minds.
But human nature being what it is you still find people falling for any scheme that promises huge returns on their investments.
It is a product of both naivety and desperation.
Perhaps this is a reflection of our desperate economic times.
The MKM fiasco has simply refused to go away.
High Court judges have refused to hear the case.
Lesotho has now been forced to import a foreign judge from neighbouring South Africa to handle the matter — at a cost to the country.
In our opinion the central bank should shoulder the bulk of the blame for the MKM fiasco.
The bank simply did not do its job and allowed MKM to operate for years in clear violation of the country’s banking laws.
The bank is still battling to clean its soiled image from that past.
This time the central bank owes it to the people that it does not allow Basotho to be fleeced of their hard-earned money again under its watch.
As reported in our lead story, we have yet another dodgy financial institution trying to operate in Lesotho.
The Independent Client Introducer (ICI), a South African firm, left Lesotho earlier this year under very controversial circumstances.
Now agents purporting to represent the company are allegedly trying to slither back into the country to resume operations.
We expect the central bank to be firm in dealing with any financial institution that seeks to fleece people of their money.
It is clear that such a business cannot operate in Lesotho because it is not licensed.
While the current scheme might not be a Ponzi scheme per se there is a huge risk that people might lose their money again.
We all know from our MKM experience the painful results of allowing such a dodgy scheme to operate even for a day.
The central bank must clearly demonstrate that it is discharging its duties of monitoring and surveillance of the financial sector diligently.
We expect the central bank to move with lightning efficiency to clamp down on these clearly fraudulent investment schemes.
One way of doing so is by embarking on a massive information campaign urging Basotho to be wary of any investment scheme that promises unrealistic returns.
As the media it would be a clear case of dereliction of duty on our part if we were to fail to warn the public over schemes of this nature.
