Staff Reporter
ROGUE Chinese-born businessman, Yan Xie, is back in the news and this time he stands accused of defrauding the government of M27 million through a shady business deal packaged as a private-public-partnership (PPP).
He is not the only rogue businessperson to have beaten a path to Lesotho and wormed his way into the good graces of politicians. Others who have set up shop by showering leaders with money and gifts include fellow Chinese national Stone Shi. Mr Shi caused a massive storm in 2018 when he convinced the previous Thomas Thabane administration to enact legislation giving him a monopoly in the trade of wool and mohair.
There is also the case of British businessman, Arron Banks, who also stirred controversy by bankrolling Communications, Science and Technology Minister Thesele Maseribane’s Basotho National Party (BNP)’s election campaign to the tune of £350 000 in 2012.
According to respected academic and political analyst, Professor Mafa Sejanamane and other analysts, the likes of Messrs Xie, Shi and Banks will continue to find a haven in Lesotho as long as the country is governed by self-seeking politicians whose primary concern is to use public office for primitive wealth accumulation.
As the analysts point out, the problem of rogue foreign businesspeople is not a Lesotho problem alone- even more powerful countries like South Africa have been mortgaged to “corruptors” like the Indian-born Gupta family.
“Right now, South Africa has established a costly commission of inquiry to probe the extent of the state capture by the Guptas,” said a political analyst, Sello Sello.
“But this is a costly undertaking which could have been avoided in the first place if there were strong institutional mechanisms in place to ensure that the South African government entered into business deals with reputable individuals and companies who passed the ethical test.
“While striking deals with unscrupulous business people may fatten the pockets of corrupt government leaders and officials in the short term, this, unfortunately, leaves behind huge debts which future generations will have to deal with. Years from now, Lesotho will have to establish costly commissions of inquiry very much like South Africa’s Raymond Zondo-led commission of inquiry into the capture of the state. Lesotho will also have to settle any legacy debts accruing from the past governments’ dalliances with the likes of Banks, Shi, Xie and other rogue businesspeople,” Mr Sello said.
Mr Sello certainly has a point about the corrupting influence that the likes of Mr Xie and others have had on local politicians.
Mr Xie has been holed up in Australia for almost a year amid reports that he fled the country to avoid possible prosecution for corruption in connection with other alleged crimes.
He has been implicated in various shady business dealings particularly with the previous Thabane administration under whom he served as the special envoy and trade advisor on the China-Asia Trade Network.
In the latest case to make headlines last week, Small Business Development, Cooperatives and Marketing principal secretary, Tankiso Phapano, accuses Mr Xie of siphoning public funds under the guise of a purported PPP supposedly to benefit locals when it was a “brazen act of defrauding the government of Lesotho and innocent taxpayers”.
Mr Xie is said to have facilitated the awarding of three tenders worth M27 million to three companies which Mr Phapano alleges are closely linked to him. The tenders were awarded in April 2018.
Mr Phapano makes the allegations in his founding affidavit to his High Court application for the nullification of an October 2018 Memorandum of Understanding (MOU) between his ministry and Mr Xie for the establishment of an agro-business venture between some Chinese and Basotho companies.
Three companies – Thabong Holdings, Bafani Construction and A-Pharma Lesotho – were awarded tenders totaling M27 million in April 2018 to supply the Ministry of Small Business with toothpicks, egg tray and duvet-inner line machines in 2018.
Thabong Holdings was awarded a M4 077 860 tender for the supply of a toothpick making machine while Bafani Construction was awarded a M15 585 341 tender for the supply and delivery of an egg tray making machine.
A-Pharma Lesotho was given a M7 490 810 contract to supply the ministry with duvet-inner line machine allegedly at the behest of Mr Xie.
The three machines were meant to be used in a business deal born out of a MOU the ministry signed with Mr Xie on 30 October 2018. Former Small Business Development PS, Lerata Pekane, signed on behalf of the ministry.
Among others, the five-year partnership would lead to the establishment of piggery and chicken projects as well as “create some job opportunities” for Basotho. Under the deal, a Chinese Business Community and a Basotho Business Group would respectively hold 70 percent and 30 percent shares in the projects.
It is not clear why the Chinese business community would own a bigger stake when the government was the sole provider of capital to the tune of M27 020 073.
Mr Phapano now wants to cancel the contract which he says shows the “depth of the stealth and chicanery that was employed in order to siphon public funds to the tune of M27 020 073”.
Popularly known as John, Mr Xie was appointed then Prime Minister Thabane’s special envoy and trade advisor on the China-Asia Trade Network in 2018.
Commenting on Mr Xie’s appointment as Mr Thabane’s special advisor, Prof Sejanamane, said although he lacked the credibility to head a unit in the prime minister’s office, Mr Xie had one thing going for him: “he knows and sponsors most politicians who matter in Lesotho”.
“It is well known that since 2006 his Jackpot Supermarket was a shop of choice for several ministers who did not have to pay for their grocery requirements. In return, Xie is well looked after with government tenders and acquisition of government businesses whenever they go on sale.
“It is through his (political) connections that he has been able to acquire the Lesotho Pharmaceutical Company in Mafeteng and Meraka Lesotho Abattoir among others. In all those acquisitions, Xie does not tender, but charms his way to politicians whom he sponsors in any case.
“In most countries, for people to be eligible to key positions, they require that an ethics test be passed. This is a test which attempts to find out whether the person is a fit and proper one to be entrusted with key responsibilities. Unfortunately, in Lesotho, our system does not require people to be evaluated on their ethically propriety.
“Indeed, if Xie was evaluated, on the basis of his business dealings alone, he would have been barred from assuming any public office. He has sponsored key people in the old regime and he sponsors others in the present regime. For now, I will not release the nature and extent of the sponsorship, but I am horrified how people are indebted to him. The only skill he has is as a corruptor not as a business guru,” Prof Sejanamane said.
By his own admission, Mr Xie has worked with and funded key politicians in the current and former governments. Politicians across the party divide from All Basotho Convention (ABC) leader Mr Thabane and fellow former prime minister and Democratic Congress (DC) leader Pakalitha Mosisili have all benefitted from Mr Xie’s largesse.
“They (politicians) have allowed themselves to be corrupted by him to the extent that Mr Thabane appointed him to a key government position as his advisor even though he had neither the diplomatic acumen and right ethical standing for such a post.
“Such rogue individuals will continue to find a haven in Lesotho and other African countries as long as the countries continue to be led by self-serving politicians whose primary concern is to use public office for primitive wealth accumulation,” Mr Sello said.
He is right in that Mr Xie is not the only rogue businessperson to have beaten a path to Lesotho and wormed his way into the good graces of politicians. Others who have set up shop by showering leaders with money and gifts include fellow Chinese national, Mr Shi and British businessman Mr Banks.
Mr Shi stirred controversy after getting the government to enact the controversial 2018 agricultural marketing regulations which gave his Maseru Dawning Company a monopoly in the wool and mohair sector.
For the previous 44 years until the enactment of the 2018 regulations, local farmers had always sold their produce through South African brokers, BKB, in Port Elizabeth.
But with the enactment of the regulations, they were now forced to sell their produce through Mr Shi’s Thaba Bosiu-based company. The company appeared to be out of its depth as far as understanding the wool and mohair sector was concerned, resulting in late payments to farmers if at all the payments came.
Farmers also complained that in the instances where they were paid for their produce, the payments were way less than what they had received from BKB.
This precipitated an ill-feeling towards the Thabane government which culminated in the June 2019 “mother of all demonstrations” when thousands of farmers marched in Maseru to force the government to repeal the controversial regulations.
The government has since amended the regulations to allow more players including BKB back into the wool and mohair industry but a lot of damage has already been done.
It will not be a surprise if a future commission of inquiry finds that ministers and other government officials received kickbacks to facilitate the wool and mohair monopoly on behalf of Mr Shi’s company.
Apart from Messrs Shi and Xie, Lesotho’s politicians have also benefited from the largesse of controversial British businessman, Mr Banks, who funded ruling Mr Thabane’s ABC as well as Minister Maseribane’s BNP.
In an interview with the BBC two years ago, Mr Thabane acknowledged receiving financial assistance from the controversial British businessman Arron Banks while he was in exile in South Africa in 2015.
He described Mr Banks as a good friend who helped him with money to “buy food and soap” while he was in exile in South Africa.
The BBC also said Mr Banks also paid Mr Maseribane’s rentals while he was in exile in South Africa alongside Mr Thabane.
While both Mr Banks and Mr Maseribane confirmed the transactions, they denied that the money was meant to influence the government into granting him a diamond prospecting licence in 2014.
Mr Banks is popularly known for bankrolling Britain’s exit from the European Union which has now been termed “Brexit”.
The BBC report indicated that while he was applying for a diamond prospecting licence in 2013 and 2014, Mr Banks transferred £65 000 (about M1, 2 million) into Chief Maseribane’s personal bank account.
Part of the money, £16 000, was paid to Chief Maseribane a few weeks before his prospecting licence was granted.
At the time that the transactions were made, Mr Maseribane was Minister of Gender, Youth, Sports and Recreation.
Although Chief Maseribane and Mr Thabane denied there was any corruption in their dealings with Mr Banks, a South African anti-corruption investigator, Paul O’Sullivan, was quoted by the BBC as saying that he would launch a probe into Mr Banks’ dealings with Lesotho’s politicians because they bordered on corruption.
“We will be carrying out further forensic investigations and then I will be opening a criminal docket.
“If you are paying the rent, buying food, and financially supporting politicians who could influence and further your own business interests, then there are clear signs of corruption at play.
“Putting money into the private bank account of a government minister also raises questions. There is a serious lack of transparency. I will be filing a docket, a criminal complaint here in South Africa and I will be sending a file to the Serious Fraud Office in the UK,” Mr O’ Sullivan said at the time.
It is not clear if at all he has made any progress with his investigations.
But in the meantime- as analysts point out- the Yan Xies, Stone Shis and Arron Banks of this world will not be the last to come to this country and other African countries.
In fact, many more unscrupulous characters will continue to find a haven in this country as long as we have unscrupulous self-serving politicians looking for external partners to work with and fund their insatiable thirst for personal wealth at the expense of national development.
