By Thabo Khasipe: Chairman of the Board of Directors of the Lesotho Electricity Company (LEC)
The public has been swept up by a misleading narrative that the new LEC Board, appointed in late 2024 by Hon. Prof Nqosa Mahao and topped up by Hon. Minister Mohlomi Moleko in early 2025, is evading accountability by seeking legal protection in response to its recent appearance before Parliament’s Public Accounts Committee (PAC). Social media has erupted, declaring the Board guilty by court application, painting us as a corrupt cover-up crew rather than what we are, a repair team knee-deep in crisis management.
This is not only false. It is dangerously absurd.
How could a Board that only took office months ago be running from accountability for a damning external audit report covering financial statements for 2022/23 – literally two years before our appointment? Why would we “run to court” to shield ourselves from responsibility for events that unfolded under previous regimes?
Let me be clear. I will not litigate matters currently before the courts in this piece. But I will urge every concerned citizen to read the full court papers, not just the headlines or viral snippets. The truth, as always, lies in the details—not in the drama. As I argue in this piece, the root cause of LEC’s problems over the years is the drama. To be precise, the political drama that has defined our beloved country over the past decades.
LEC’s Grim Reality
When the new Board was inducted between November and December 2024, what we found was not a company in distress, but one in the intensive care unit. If LEC were a patient, we would say it is critically ill, bleeding cash, and barely conscious. The internal control systems are nonexistent, policies such as the IT framework have not been reviewed since 2005. (No. That’s not a typo). The risk register and internal audit reports indicate risk exposures in IT systems that I couldn’t, without being an irresponsible member of the Board, expose publicly. The ethical climate is toxic, riddled with evidence of fraud, dysfunction, and generally low staff morale.
As we took over in November 2024, we were approached by a frustrated Auditor General. Despite an agreed May to September timeline for an external audit of LEC’s 2022/2023 financial statements, little progress had been made. The reason was that Management was failing to supply records while also failing to turn up for agreed and prescheduled meetings. In December, the Audit Committee of the Board was to have a firsthand experience of this conduct when Management failed to turn up to a scheduled meeting of the Board Committee.
The audit firm appointed by the Auditor General soon submitted a claim for the time extensions, which the LEC had to pay. It’s only after the Board took decisive action by writing to the MD requesting answers and a rescue plan that the audit finally got concluded, six months late, in March 2025 but still with many records missing. It was red flags all over.
Unsurprisingly, the Auditor General expressed a disclaimer of opinion. Think of it as a school report that reads, “Cannot grade—no assignments submitted.” The Annual Financial Statements raised more questions than answers. Mind you, this was an audit of a financial year that started three years ago in April 2022. The LEC is yet to be audited for the 2023/24 and 2024/25 financial years, and if this latest audit report is anything to go by, it became very clear to the new Board that the country is sitting on a ticking time bomb. It wasn’t just a red flag – it was a whole deck of them.
Profitable
Incidentally, past Annual Financial Statements indicate that LEC was both profitable and cash flow positive between 2017 and 2019. From a loss of M75 million in the year ended 2016, it recorded profits for the next three years as follows; M116 million in 2017, M127 million in 2018 and a peak profit of M158 million in 2019. Financial troubles started in the year ended 2020 with losses of M44 million, followed by a M57 million loss in 2021. The losses improved a little bit to M25 million in 2022 before plummeting to M78 million in 2023. Notably, 2023 saw the company’s operating cash flow turning negative to a net outflow of M81 million, indicating risks to liquidity and going-concern status of the corporation.
Meanwhile, Management Reports coming to this new Board were indicating that the situation in 2025 was notably worse than in 2023. The internal ethical culture was highly challenged, performance was bad, the internal control system was comatose and, consequently, the corporation was fast losing legitimacy in the eye of public. When this new Board took over in October 2024, internal audit reports had not been produced for more than two years. As I write, draft annual financial statements for the just ended 2024/25 FY indicate a staggering M290 million net cash outflow and worsening losses.
The result of all these has been to severely undermine LEC’s ability to service its mountain of debt, which over the years had accumulated to over M800 million. Worryingly, LEC’s continued bad performance is, even as I write, threatening national energy security. This is because the company is no longer able to generate any operating cash flow to afford bulk purchases of energy from both ESKOM and domestic Independent Power Producers. Indeed, the first action of this new Board in October 2024 was to approve an emergency bail-out loan application of M238 million from Government to finance bulk energy imports from ESKOM for a six months period. A further M368 million, unapproved by the Board, was requested and granted in February 2025.
Noting this gloomy situation, especially the fact that the Auditor General had failed to provide any assurance to it about the 2023 AFS, this new Board resolved in March 2025 to urgently appoint a forensic auditor. The Board then quickly learned that the Auditor General had, a year earlier in March 2024, been requested by the then Minister of Energy, Prof Mahao, to undertake a forensic audit of LEC. Moreover, such an audit was almost commencing in May 2025. The Board decided to yield to the Auditor General and await the results. That forensic audit is currently ongoing at LEC.
To facilitate this forensic audit by the Auditor General, the Board decided to suspend the entire Executive Management. It then immediately became obvious to some of us on the Board that the many glaring red flags warranted an immediate internal disciplinary enquiry. To some of us, this was necessary to “stop the bleeding” and not to abdicate our oversight responsibility by expecting the forensic auditors to do our dirty fire-fighting work. Needless to say, our differences of opinion on this matter are now a matter of public record, as it led to a resignation of one member.
The Root Cause: Political Interference
As early as November 2024, this Board commissioned a turnaround strategy with the help of external consultants. Unsurprisingly, the strategy identified political interference as the root cause of many of LEC’s ailments. From staff appointments, operational meddling, procurement and politically popular yet financially unsustainable policies such as the policy-prescribed M2000 maximum connection fees (while it costs LEC nearly M10,000) politicians have over the years brought the LEC to where it is is today.
The problem with political appointments is that they not only sideline qualified candidates but also set up unqualified appointees to fail, exposing their incompetence. LEC shows clear signs of systemic leadership failure, reflected in its chaotic internal control environment. Beyond financial losses, this has eroded human capital, leading to low staff morale, unfair labor practices, and a leadership blind to the link between financial and human resources. This new Board cannot fix this overnight, but pretending it’s business as usual would be leadership malpractice.
Balancing People and Profit: A Leadership Imperative
Which brings me to a peculiar controversy of acting allowances.
One of the clearest signs of LEC’s systemic leadership frailties is the controversy surrounding acting allowances which is now unfairly pinned on this new Board. Let’s be clear, this new Board has never been presented with signed minutes or a resolution supporting the alleged 2021 policy approving a 10% acting allowance. The only document submitted recently is a board paper dated October 2021, months later than the supposed March 2021 decision. A board paper is no evidence of policy.
Moreover, for a new Board committed to correcting past failures, the idea that we should have continued with an unapproved 2021 acting allowance practice or overrode the policy-prescribed staff union consultation – just to save money – misses the point. Part of our mandate is to infuse an ethical culture in LEC through values-based leadership, not to chase short-term savings at the expense of sustainable stakeholder value., for a Board committed to
The only valid acting allowance policy on record remains the 2015 version, which allowed acting staff to earn the difference between their salary and that of their boss. Recognizing the need for a more financially sustainable approach, this new Board, in March, directed Management to develop a revised acting allowance policy. As per LEC’s HR policy and sound governance practice, this must be done in consultation with staff through their labour union. That process is underway.
You don’t fix broken finances by breaking your people
Actually, whereas some see the high acting allowances as wasteful expenditure, I see the stark pay disparity between suspended executives and their direct reports, now acting in those roles, as yet another symptom of weak leadership at LEC. As the new Board, we have come to learn that LEC has two organizational and pay structures. One for Executive Management, who are now on suspension, and another for everybody else. This is why when a Manager steps in to act in his General Manager’s position, due to huge gaps of upwards of M50,000 – excluding executive-only benefits, the acting allowance amounts to double his normal salary in some cases. When the same General Manager sees the solution as curtailing the allowance to 10% of the low Manager’s salary, this reveals a leadership ethic disconnected from the broader workforce – a setup bound to breed resentment and erode morale.
Even more troubling is the framing of the current Board’s decision as a “scandal” for allowing acting managers to earn equivalent pay for doing the full work of their suspended seniors. The real issue isn’t whether the Board should pursue a more financially sustainable policy – we are. The issue is that executive pay and structure at LEC appear fundamentally out of sync with organizational fairness and longterm sustainable value addition.
Yet another entrenched unfair labour practice at LEC is the case of “permanently temporary” workers who do the same jobs as permanent staff for a fraction of the pay, with no benefits or bonuses. Currently, 25% of LEC staff (126 people) are on perpetual temporary contracts doing the same job as their fixed term counterparts. To avoid paying these people severance pay, their contracts are deliberately terminated just as they are about to qualify, only to offer them new contracts a month or two later.
All these cases indicate a leadership culture that misses the crucial principle that, you don’t fix broken finances by breaking your people. As management theorist Jeffrey Pfeffer aptly put it, “Treating people right is not just the right thing to do. It’s the smart thing to do.”
Compromising human capital to save financial capital is short-sighted. You end up losing both. There are indications that LEC is losing both.
And for those raising eyebrows at equal pay for acting roles, let’s ask an ethical question. If someone is doing 100% of an executive’s job, should they be paid 10% of their pay? Or does fairness demand a more balanced view? Let’s not pretend that moral confusion is fiscal discipline.
The scandal of LEC is not this new Board. It is the status quo that some wish to preserve. We are not enemies of accountability. We are its architects.
The Way Forward: Holding the Line, Healing the Corporation
Despite the noise and misinformation, the task before us is clear. The Lesotho Electricity Company is a national asset in distress—but not beyond repair. Two weeks ago, the Board held a focused strategic retreat to chart a credible path to recovery. We worked intensively to develop a turnaround proposal that addresses LEC’s operational, financial, and cultural failures head-on. The truth is, LEC was profitable and cash-positive as recently as 2019. That tells us this is not an impossible mission. But success will require more than a plan. It will demand a unity of purpose across all stakeholders, including political leaders, staff, the public, and this very Board.
We do not seek immunity from scrutiny. We welcome accountability. But accountability, like any good principle, must be paired with fairness. This Board deserves a reasonable window to execute, at least one year to show results, after which judgment may be rendered based on outcomes, not suspicion or hearsay.
Lastly, I wish to reassure both the public and Parliament that the Board looks forward to its appearance before the Public Accounts Committee on Monday. We fully respect the oversight role of the Committee and are prepared to engage constructively, no matter how rigorous the questions may be. We only ask that, as law-abiding citizens, we be treated with fairness and afforded the opportunity to respond fully to the questions posed—within the procedural discretion of the Committee’s Chair.
We may have inherited a collapsing house, but we are not running from the dust. We are staying in the rubble, rebuilding brick by brick, with integrity, with resolve, and, we hope, with your support.
