Uproar over ministers’ new company
…opposition claims conflict of interest
Three senior government ministers who have been at the forefront of defending the government’s decision to pass new regulations governing the trade of wool and mohair, have jointly established a company which could become a player in that very same sector.
Opposition parties say the ministers’ establishment of the company is a clear conflict of interest as the trio were venturing into a sector which they regulated by virtue of their ministerial portfolios.
Ministers, Chalane Phori (Small Business Development Cooperatives and Marketing), Tefo Mapesela (Trade and Industry) and Mokoto Hloaele (Energy) joined forces with one Mr Manamolela Kuenane to register their company with the ministry of Trade on 22 May 2018.
The Lesotho Times is in possession of a copy of the company’s business extract which shows that the new company has four shareholders including the three ministers. Each of the shareholders holds 100 000 shares.
The new company, Masimo A Matala (PTY) Ltd (loosely translated to mean ‘green fields’) lists several activities that the company seeks to engage including the breeding of sheep and goats, the wholesale of agricultural machinery and supplies, packaging and rearing of other livestock.
The breeding of sheep and goats, the wholesale of agricultural machinery and supplies and packaging which are associated with the wool and mohair sector have fueled claims by the opposition that the company could have been launched with a view to dominating the sector.
This is especially so after the company was registered a fortnight after the government introduced new regulations to ensure that Lesotho’s wool and mohair will now be sold locally to international buyers. For the past 44 years the wool and mohair was sold in South Africa by brokers BKB on behalf of local farmers.
On 4 May this year, Agriculture Minister Mahala Molapo torched a storm when he gazzetted the Agricultural Marketing (Wool and Mohair Licensing) Regulations 2018, which state that no one will be allowed to trade in wool and mohair without a licence from the Ministry of Small Business, Cooperatives and Marketing. The Small Business ministry is headed by Mr Phori.
The regulations further state that “the holder of an export licence shall not export wool and mohair unless it is prepared, brokered, traded and auctioned in Lesotho”.
Any person found guilty of brokering, testing, processing, trading and auctioning wool and mohair without a licence is liable to a fine of M50 000 or a maximum of five years imprisonment.
Anyone found to be in the business of shearing wool and mohair or exporting without a licence will be fined M20 000 or be imprisoned for two years.
The new regulations were recently described as draconian by the opposition.
The opposition further said there was a clear conflict of interest after the establishment of the company with interests in the wool and mohair industry by the same ministers who regulated the sector.
The chairperson of the opposition caucus, Motlalentoa Letsosa, said the registration of the ministers’ company “signaled the continuation of the war between the government officials and farmers where the former had seen opportunities for self-enrichment”.
“This is conflict of interest at its worst because the company was started by people who are already in the offices which have an influence in the awarding of jobs in the wool and mohair business.
“We are witnessing a scenario where suddenly legislators are fighting with the electorate over markets,” Mr Letsosa said.
Lesotho Congress for Democracy spokesperson, Teboho Sekata said the formation of the ministers’ company smacked of corruption and vindicated All Basotho Convention (ABC) legislator, Nyapane Kaya’s recent claims that the war against corruption would not be won because some government officials were either partaking in corrupt activities or simply reluctant to speak out against the scourge.
“This is corruption. The government has failed dismally and the fact that there was a leakage of the ministers’ certificate of incorporation shows that there are some people who are not happy with the corrupt activities in the government.
“We now know what Kaya meant when he talked about having been fired because of corruption within the government. Legislators will be competing with the electorate (who only have the wool and mohair business) for a living when they (legislators) have more than enough to sustain themselves in the form of their salaries. This is absolute greed,” Mr Sekata said.
The three ministers confirmed they had indeed established the company and they each had 100 000 shares. They however, denied any wrongdoing.
Mr Phori, who is also the company’s spokesperson said, “There is nothing wrong with starting the company and this is not the last company we will have as we believe in self-sustainment”.
“We will each be forking out M250 000 ….The four of us will contribute M1 million to enable us to create jobs in the farming sector. There is no conflict of interest as everyone is allowed to start a business.”
However, Mr Phori said they had no plans of venturing into the wool and mohair business, adding that “our people have been fed lies on that issue.
He said the fourth member of the company, Mr Kuenane was his father in-law who was also an “expert in agriculture”.
Advocate Lekhetho Rakuoane, the leader of the opposition Popular Front for Democracy, said while there was nothing wrong “in principle” with ministers owning businesses, there ought to be a code of conduct to ensure there would be no conflict of interest.