Trade PS takes on Setipa
. . . argues minister had no power to suspend LNDC board
TRADE and Industry ministry Principal Secretary (PS) Majakathata Mokoena Thakhisi has accused Minister Joshua Setipa of acting beyond his powers by suspending the Lesotho National Development Corporation (LNDC) Board of Directors early this month.
In a strongly-worded letter copied to Prime Minister Pakalitha Mosisili, his deputy Mothetjoa Metsing and Attorney-General Tšokolo Makhethe, Mr Mokoena Thakhisi says the “incomprehensible” suspension was not only “weakening” Lesotho’s economy, but placed national security “in jeopardy”.
Mr Setipa suspended the Board on 4 May ostensibly to allow the restructuring of government’s trade and investment arm. Two days later, the minister also suspended LNDC Chief Executive Officer Kelebone Leisanyane for alleged maladministration.
However, the Board has since rejected the suspension, arguing the move was not justified, while Mr Leisanyane sought a High Court interdict blocking the suspension. The court gave Mr Setipa until 27 May 2016 to give reasons why the CEO’s reinstatement should not be made permanent.
The court order also instructs Mr Setipa to submit to the Registrar of the High Court, a record of proceedings in which Mr Leisanyane was suspended.
In his communiqué, Mr Mokoena Thakhisi, who is also LNDC Board chairperson, argues there is no provision in the LNDC Act empowering the minister to suspend the Board “as an interim measure or otherwise”.
Part of the letter, dated 5 May 2016, reads: “Section 8. (1) of the LNDC Act 1990 provides that ‘The affairs of the corporation are managed and controlled by a Board of Directors who may exercise all the powers and who shall perform all the duties of the Corporation subject to the provisions of the Act and regulations’.”
The PS argues the provision made it clear Mr Setipa could not make the suspensions without formally consulting with the LNDC Board of Directors.
“In terms of the Law, the minister exercises his power or authority through advice of the Board…” says Mr Mokoena Thakhisi.
The termination of the appointment of the CEO, he says, also required the minister to consult the Board. As a result, Mr Mokoena Thakhisi notes, the minister had created a vacuum in two aspects.
“. . . firstly, the CEO is accountable to the Board and this is mandatory. Section 9B (2) stipulates that ‘The Chief Executive Officer shall be accountable to the Board of Directors’,” reads the letter.
“Therefore, as an example, without the Board of Directors, the CEO will be accountable to no one recognised by the law to perform any such duties to the Corporation.
“This, obviously, can have adverse consequences to the operations of the Corporation as there will be no oversight governance structure in place.”
Another consequence of the vacuum, Mr Mokoena Thakhisi says, is that nobody recognised by law to perform such duties would be responsible for the affairs of the Corporation.
“This again, is potentially detrimental to the accountable operation of the Corporation. For example, all the serious transactions relating to its mandate such as raising funds cannot be pursued without the sanction of an oversight Board,” he states.
Mr Mokoena Thakhisi also reminds Mr Setipa he holds the position of chairman of the LNDC Board by law and was not the minister’s appointee.
He says according to the LNDC Act, “the Directors of the Corporation shall consist, amongst others, of a representatives of the Ministry responsible for industry, trade and marketing who shall be the Chairman (emphasis).”
This assumes, Mr Mokoena Thakhisi maintains, that the position would be occupied by the ministry’s Chief Accounting Officer.
“The minister, therefore, has no legal basis to suspend his chairmanship as long as he remains the Chief Accounting Officer of the ministry,” he states.
“The current chairman, as you know, is the Principal Secretary to the Ministry of Trade and Industry hence the Accounting Officer for the Ministry.”
The PS further argues Mr Setipa was “not in order” to fire the Board, which also included representatives of Ministries of Finance and Agriculture.
“It is surely not in order to suspend their functions without consulting the ministries they represent,” he says.
The LNDC Board members, says Mr Mokoena Thakhisi, were also entitled to a fair hearing prior to their suspension.
“It is worth noting that the Minister is not suggesting or making any case that they (Board members) are not fit to discharge their duties,” he says.
“The letter only says that the Honourable Minister has acted in that manner to protect the integrity of the Board.
“It is completely incomprehensible how suspension can protect a suspended Board’s integrity.”
Adds Mr Mokoena Thakhisi: “This will not only tarnish the image of the Corporation, but has a serious reputational risk, leading to the inability of the LNDC to execute its duties, thus weakening the economy of Lesotho and placing the national security of the country in jeopardy.”
He also argues Mr Setipa could not render the LNDC Act ineffective “by a letter”, adding the minister should have followed legal procedures if necessary.
“It is a requirement of the law that the appointment of the directors be published by a legal notice in the (Government) Gazette,” states Mr Mokoena Thakhisi.
“Logic dictates, therefore, that their suspension or removal should be treated in the same manner.”
He also notes the restructuring of the corporation should be sanctioned by Cabinet since the LNDC is a government agency.
“If any amendment is required, Cabinet procedures should be earnestly followed. It is submitted that restructuring of the whole entity is even more serious and would necessarily impact on certain provisions of the law,” Mr Mokoena Thakhisi says.
“Based on the above, it is quite clear that the Minister has acted untra vires (beyond his powers) hence the Honourable Minister’s letter has no legal force or effect.”
Contacted for comment yesterday, Mr Setipa said he would not say anything on the matter as it was now before the courts.
There was no immediate comment from Mr Mokoena Thakhisi.