PAC demands  dividends from Kao

PAC demands dividends from Kao

MASERU – THE Public Accounts Committee (PAC) on Tuesday aggressively pushed Storm Mountain Diamonds (SMD) to explain why it has not paid dividends to government since it took over Kao Mine.
The Lesotho government owns 25 percent in the mine. Pressure has been mounting on companies in which government has shareholding to cough up dividends.

The government is pressed for cash because of dwindling revenues from traditional sources.
SMD’s company secretary, Morne Maree, told a joint sitting of the PAC and the Natural Resource Committee that the company has generated some profits in the past but had to reinvest them in the business.

He told the committee that from 2012, the enterprise ran a loss and it was only in 2014 and 2017 when some profits were generated.
“But the directors of our company decided that we should not pay dividends,” Maree said.

’Matšepo Ramakoae, a PAC member, asked the Kao officials to furnish Parliament with the mine’s financial statements.
“We are also interested in investors who have money. We do not want people who come to our country as investors and yet they do not have money because they would not be able to pay dividends,” Ramakoae said.
“So if you do not have money then you have to quit,” she said.

SMD chief executive, Officer Robert Cowley said investors poured in over M300 million in developing the mine’s infrastructure hence the failure to pay a dividend.

Chairperson of the Natural Resource Committee Mpalipali Molefe expressed worry that a director could just instruct that no dividend should be paid in contravention of the law.
Molefe said it was wrong for the company to milk the country’s resources yet refuse to follow the laws of the land.
Molefe is the Member of Parliament (MP) for Maliepetsane Constituency.

Another PAC member Tsoinyane Rapapa questioned the role of other players in the decision.
Rapapa, who is the MP for Mosalemane, said the mine’s shareholders were also a part of the decision not to pay a dividend.
He asked the mine management to bring minutes of the meeting where the decision not to pay a dividend was taken.
Cowley said the company’s ability to pay a dividend is measured by its solvency and liquidity.
“So these are some of the issues that led the company to be unable to pay dividends,” he said.

Ministry of Mining Deputy Principal Secretary, Lira Ralebese, said the ministry would get the Auditor General Financial Report for every mine.
He said this will help trace the operations and profitability of every mine operating in the country.
Mathaleha Lerotholi, the mining ministry’s legal officer, blamed the rot on politicians who staff the mines with cronies with no expert knowledge on mining.

In an angry outburst, Molefe said he suspected that the Ministry of Mining and Kao mine were working in concert.
“Some mines are already paying the dividends but Kao mine does not pay theirs. It seems that the ministry and the mine have forged a relationship that does not benefit these poor Basotho out there,” Molefe said.

“When we allow you to come and invest in our country it was because we have seen that you have financial muscle but now you are telling us that you start the business with the loans and then you end up not paying dividends. This is not good at all,” he added.
Molefe said Kao mine is one of the biggest in the country.
“If they were doing everything as good as they were supposed to do, we should have benefited as a country,” he said.

Thooe Ramolibeli


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