Victoria Hotel saga symptomatic of entrenched corruption: analysts
THE botched lease of the government-owned Victoria Hotel, that only came to light 20 years after the initial lease was granted, is probably just a tip of the proverbial iceberg with regards to the shocking dereliction of duty by government officials, analysts say.
A recent Directorate on Corruption and Economic Offences (DCEO) investigation revealed that the hotel was unprocedurally and corruptly leased out in 2002 by then Finance Minister Timothy Thahane. It was then used as a conduit for money laundering by South African based businessman, Thabiso Tlelai, the Directorate on Corruption and Economic Offences (DCEO) alleges.
Mr Tlelai’s Sobita Investments was awarded the lucrative deal to lease the strategically located hotel without an open tender process as required by procurement regulations.
Since “corruptly” obtaining control of the hotel, Mr Tlelai has used it to export millions of Maloti to his other South African based accounts but has never paid a single lisente of the monthly M60 000 rent for the facility. Nor has he paid any taxes to the Lesotho government, thereby prejudicing this impoverished country of revenue it should have obtained from a key asset.
It is estimated that the government has been prejudiced of M19, 4 million due to non-payment of rent. The DCEO’s director general, Advocate Mahlomola Manyokole, and his principal investigations officer, Tsotang Likotsi, have now trained their guns on former Finance Minister Dr Thahane. They accuse him of orchestrating the entire “corrupt” scheme and want him charged with corruption.
As if this is not shocking enough, the DCEO’s head of the assets forfeiture unit, Adv Peter Matekane, further revealed that government officials in the Finance and Tourism ministries as well the tender board were not even aware that the hotel is government property.
“The people that we have interviewed, including senior finance officers who worked at the central tender board, know nothing about this contract,” Adv Matekane told the Lesotho Times.
“It looks like this (granting of the lease) was a secret operation. We have other buildings and people in the government do not even know that they are owned by the government said,” he added.
Following the shocking revelations, National University of Lesotho (NUL) economics lecturer Machema Ratjomose and fellow analysts said the Victoria Hotel saga could be a microcosm of a much bigger problem of unaccounted for national assets currently in the hands of unscrupulous people.
Dr Ratjomose said if the allegations that a minister was involved in unprocedurally awarding the tender, then the country might be facing a serious problem of pilfering of revenues from national assets.
Had there been proper governance and accounting systems in place, government should have been able to track and reverse the “corrupt” tender award to Sobita, he said.
“The DCEO needs to probe this issue because if a minister was involved, there could be more than what meets the eye. The minister (Dr Thahane) was not alone in this. He could not have awarded such a tender without the blessing of the government of the time,” Dr Ratjomose said.
To prevent a repeat of such scenarios, he said the government needs to do due diligence and come up with an inventory of all national assets. An independent asset management company should be appointed to oversee and collect revenue from those assets on behalf of the government.
“The asset management company can operate along the lines of the Lesotho National Development Corporation (LNDC) that was established to oversee the business interests of the government. That company should collect revenues from the state assets and remit them to the government,” he said.
Business and personal development trainer Harry Nkhetse concurred saying the Victoria Hotel debacle had exposed the laxity and lack of foresight on the part of government in administering and structuring deals pertaining to national assets.
Mr Nkhetse said despite having educated people in their ranks, successive governments had failed to contribute meaningfully to infrastructural development.
He said most of Lesotho’s infrastructure was built under the tenure of the late Prime Minister Leabua Jonathan who ruled from independence in 1966 until his overthrow in 1986.
Such has been the ineptitude of successive governments that they had not only failed to build new infrastructure but had also failed to maintain the Leabua-era assets for the benefit of the nation, Mr Nkhetse said.
“Morena Leabua did not have a university degree but he was industrious. Under his leadership our country developed facilities for the benefit of Basotho including (the now defunct) Lesotho Airways, housing schemes, agricultural projects and the Victoria Hotel that is now sadly gathering dust.
“How do you sleep at night when you are a leader of a hungry nation and you know you have such dormant facilities? How do you sleep at night when you are told that in the 1980s Lesotho was able to feed herself but can no longer do that now? How do you sleep at night when you and your ministers have travelled to every corner of the world and seen how other countries do it but fail to emulate them,” Mr Nkhetse rhetorically asked.
Economic analyst Arthur Majara said the Victoria Hotel tender was a “heist” with all the elements of “state capture” by unscrupulous individuals who had connections in high offices.
Mr Majara said the Moeketsi Majoro-led government should repossess the Victoria Hotel and other national assets that had become white elephants and were not benefitting the nation. He said all those involved in the controversial Victoria Hotel tender should be prosecuted.
A senior government bureaucrat, who spoke on condition of anonymity, blamed the tender scandals and failure to follow up on national assets on the frequent changes of governments.
He said each new government came with new people who lacked the institutional memory to follow up on national assets.
He said ordinary citizens should also shoulder blame because their passivity in the face of frequent exposés of corruption had emboldened political leaders and civil servants to become even more brazen in their corruption.
“Lesotho’s successive governments and related national institutions have shortchanged citizens through ineptitude and dereliction of duty over the years.
“Citizens should also shoulder some of the blame for the malaise. They ought to be outraged and even protest against the scandalous politicians but they are shockingly quiet even when big scandals are exposed.
“In countries like South Africa, people and workers’ unions take to the streets whenever scandals are reported. Even in a country like Zimbabwe where leaders are notoriously corrupt and often pay scant regard to citizens, we have recently seen people power forcing that country’s President Emmerson Mnangagwa to fire his health minister for sanctioning a corrupt deal involving the president’s son in the procurement of Covid-19 equipment.
“But our own people are very quiet. Perhaps years of scandals in high places have numbed them and it no longer shocks them anymore when corruption is reported. The silence has emboldened politicians and government officials to even bigger acts of corruption which are now happening in broad daylight.
“Such is the impunity that a few months ago, then Small Business, Cooperatives and Marketing Minister Chalane Phori had no qualms about publicly demanding that his company be awarded the multi-million maloti Mpilo Boulevard tender to construct roads in Maseru. According to Ntate Phori, his company just had to be awarded the tender simply because his All Basotho Convention (ABC) was the ruling party.
“Even in the face of such brazen pronouncements no one protested or said a word of condemnation. One could therefore say we deserve the kind of government officials we have,” said the official.
The analysts’ views that the Victoria Hotel is symptomatic of a much wider problem of unaccounted for national assets has been borne out by the Public Accounts Committee (PAC) and the Auditor General Lucy Liphafa. Based on Ms Liphafa’s audits, the PAC reported last year that from 2013 to 2016, Lesotho lost about M1, 5 billion to corruption involving the misuse of public funds and mismanagement of assets.
The PAC report also speaks of government properties in South Africa that were not accounted for. According to the report, 19 such properties are being managed on behalf of the government by a South African estate management firm called Ebilox (Pvt) Ltd.
Ebilox is supposed to collect rentals on behalf of the government and it is paid 10 percent of the collections as a commission.
Despite collecting about M1, 2 million, Ebilox only remitted M133 323, 68 to the government, the report says.
Unsurprisingly the PAC advised the government to terminate its contract with Ebilox and engage another asset management firm.
The PAC blamed political patronage for the appointment of principal secretaries who lacked capacity and often engaged in acts of corruption in the tender processes instead of protecting national interests.
It also blamed the premature collapse of successive governments for inhibiting processes to bring corrupt officials and their partners in crime to justice.
As long as sound corporate governance practices are not implemented and as long as the nation remains passive, corruption will flourish and the country will continue losing revenue from national assets like the Victoria Hotel.