Moorosi Tsiane
FORMER minister, Keketso Sello, is embroiled in a dispute with his brother, Katiso Sello, over their multi-million family business, Lesotho Funeral Services (LFS).
Katiso, who owns 67 percent of the shares, has petitioned the Commercial Division of the High Court to force Keketso to sell him his 33 percent stake.
LFS was founded by their late father, Louis Joas Sello.
Katiso accuses Keketso of sabotaging the company by withholding approval for business transactions until his personal debts are paid. Their dispute escalated to court after negotiations over the transfer of shares broke down.
Keketso demanded control of the company’s northern region assets in exchange for his shares, which Katiso rejected.
Katiso, who initially held 34 percent of the shares and later acquired another 33 percent from their brother Kutloano, asserts that LFS operates across three regions: north, central, and south. Kutloano managed the south, Keketso the north, and Katiso the central region in Maseru.
Katiso claims that following the acquisition of Kutloano’s shares, Keketso began disrupting LFS operations.
“Following my acquisition of Kutloano’s shares, Keketso began exhibiting some character that one may reasonably interpret as inhibiting of LFS day to day operations and thereby negatively affecting its operations. For, instance, he would require LFS to settle his personal debts before he could approve business transactions that require him as a director,” submits Katiso in his court papers.
He recounts a January meeting where Keketso expressed his desire to exit the business, proposing that his 33 percent shares be exchanged for the northern assets of LFS, a move Katiso says violates their shareholders agreement.
“In the 10 January 2024 meeting between me with my legal counsel Advocate Tlhoeli and Keketso with his counsel Adv Sepiriti, Keketso indicated that he is no longer interested in being part of LFS in its current form. In view of the above, Keketso proposed to sell his 33 percent shares to the LFS but not in cash. He proposed that since he has been managing the Northern part of the business, his shares should be the Northern assets.
“He later wrote a letter indicating his intention to renounce his shares in LFS. He in his letter went on to indicate that he does not require cash in exchange of his shares, instead he asked that he be allocated all business assets of LFS forming part of the Northern region. The issue of disposal of shares is regulated amongst others by the Shareholders Agreement which Keketso signed and is aware of. He has failed and /or neglected to comply with the Shareholders Agreement despite my letter requesting him to comply.
“It is important to indicate that in terms of the shareholders Agreement a shareholder who wants to dispose of his shares in LFS is obliged to offer his shares to the existing shareholders and the offer should have monetary value attached to it. Thus, the respondents offer did not comply with the dictates of the Shareholders Agreement.
“His proposal that LFS allocates him property currently forming part of its north region is flawed and undermines the Shareholders Agreement. The property that he seeks to be allocated in return for his shares cannot be equated to the value of his shares in the company,” Katiso states.
Katiso also alleges that Keketso’s actions have been detrimental to the company, including meeting with business associates and LFS suppliers, resulting in negative feedback.
In his answering affidavit, Keketso disputes the characterization of themselves as LFS shareholders, claiming they are merely administrators under the Sello Trust, as per their late parents’ will. He argues that the shares belong to the Sello Trust or the estate and that any rearrangement of shares was illegal under the Companies Act 2011.
“I verily aver that LFS and its shares belong to the Sello Trust or to the Estate of which we are Administrators and Executors. My brother Kutloano could not sell the property of the Trust or estate as if he was the owner thereof. In terms of the Will all the descendants of my parents are entitled to periodic payments for various expenditure as set out therein including amnesties of life. But I have not insisted on signing any documents until I could be paid, though I could,” Keketso claims.
Keketso also denies claims of refusing to authorize client payments, stating that his actions were intended to hold the entity managing LFS accountable for poor management. He insists that his refusal to sign bank documents was due to the lack of a meeting to address management concerns.
“The fact of the matter is that the entity we employed to manage LFS is showing favouritism towards the deponent (Katiso). They refused to call a meeting where I sought to require them to account for their poor management. As Administrator I am entitled to do so in terms of the Will. I refused to sign bank documents authorising payment to the appointed managers as I demanded that I not do so before a meeting which they were to account was called.”
The case, first brought to the Commercial Court in April, has seen several back-and-forth filings between the parties with the last court appearance being on 17 June 2024. A hearing date is yet to be scheduled.
