Blow for John Xie

Blow for John Xie

MASERU-A company linked to John Xie, a controversial businessman, has lost the contract to manage the Lesotho National Convention Centre.
This was after the High Court ruled that the Ministry of Tourism had the right to terminate its contract with J & M Properties (Pty) Ltd, a company connected to Xie.

On July 16 J & M Properties filed an urgent application seeking to block the ministry from cancelling the lease agreement.
The company had been operating the convention centre, a government property, since it won the contract in February 2018.
Under the deal J&M Properties was paying the government M32 000 per month to lease the LNCC which is commonly known as the ’Manthabiseng Convention Centre.

Relations however soured in June this year when the Ministry of Tourism announced its intention to cancel the deal.
A June 24-meeting between the ministry and J & M Properties ended on a tense note after the parties failed to agree.
On July 6 the ministry terminated the contract, citing clause 12 of the agreement which says each party can pull out of the agreement at a month’s notice.

It said the basis of its decision was the “constraints of our agreement in the wake of Covid-19” and that the government has declared the facility as the National Emergency Command Centre (NECC).
That meant J & M Properties had until Thursday this week to surrender the building back to the tourism ministry. The company however had other ideas.

Ten days after receiving the termination letter, J & M Properties sued the ministry for breach of contract.
In an affidavit Bernard Ntaote, J & M Properties’ managing director, argued that the termination is “wrong and unlawful”.
Ntaote said the decision to declare the building a command centre did not “relieve the parties of their contractual obligations”.

He said J & M Properties has continued to pay its rentals to the government despite the Covid-19 crisis. Ntaote said the Covid regulations do not supersede the contractual rights and obligations of the parties.
“It follows, therefore, that the NECC is just another tenant in the LNCC (convention centre) and is liable to pay rentals to the applicant (J & M Properties),” Ntaote said.

He argued that the tourism ministry did not have valid reasons to cancel the contract.
The ministry however insisted that it was within its rights to terminate the contract.
It said it had correctly relied on clause 12 of the contract to end the relationship.

The ministry also said the Covid-19 crisis had necessitated the decision.
Justice Molefi Makara agreed with the ministry and dismissed the application. The judge was however yet to issue a written order at the time of going to print last night.
Tourism Minister Advocate Lekhetho Rakuoane confirmed that the ministry had won the case.

Advocate Rakuoane said J & M Properties has been given until the end of September to surrender the building.
“This is just to allow for time to do the handover and takeover of the property,” Advocate Rakuoane said.

“At long last we are beginning to undo some of the things of the previous government. We now have control of a national asset that had been handed to an individual just to reap profits for nothing.”
The victory comes amid public outrage over revelations that J & M Properties was charging the government M53 000 per day to use the convention centre.

The exposé shows the extent to which Xie controlled some government officials and ministers in the previous administration.
The tourism ministry has since said it was not involved in the negotiations for the NECC to rent the centre from J & M Properties at such an exorbitant fee.

Former Tourism Minister Joang Molapo said technocrats in the ministry tried to warn former Prime Minister Thomas Thabane’s office about the deal but their advice was not heeded.
The NECC is controlled by the Disaster Management Authority (DMA) which falls under the prime minister’s office.

Xie is close friends with Thabane and his wife.
Thabane controversially appointed him special economic adviser during his first coalition government.
Xie, who holds Lesotho citizenship, has previously bragged that he funded most political parties and politicians in Lesotho. He is friends with several ministers within the current government.

Majara Molupe

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