Shi’s licence suspended

Shi’s licence suspended

MASERU-THE government has suspended the licence of Maseru Dawning, the controversial wool broking company accused of fleecing thousands of farmers over the past two years.
The company owned by Stone Shi, a Chinese businessman, is accused of habitually failing to pay farmers for their wool and mohair.

The Small Businesses Principal Secretary, Tankiso Phapano, told a press conference on Tuesday that the company’s director was also failing to cooperate with the government.
Phapano said Shi could not produce data on how many farmers he had paid after auctioning their wool and mohair.
Shi allegedly could not tell the government how much wool and mohair he had auctioned and what the company owes farmers.

“He has not paid farmers and he refuses to cooperate with the ministry on the collection of the names of those owed and paid,” Phapano said.
Thousands of farmers are still awaiting payment for their fibre that the government forced them to take to the Lesotho Wool Centre in 2018.

The government had imposed the Agricultural Marketing Regulations banning the exportation of wool and mohair to brokers in South Africa. That left Shi as the only broker through which the more than 50 000 farmers could sell their fibre.
With the support of some ministers, Shi had instantly become a monopoly.
The arrangement, deeply loathed by farmers, however quickly unravelled as Shi failed to pay farmers on time. Some farmers alleged that he was cheating them.

Shi vehemently denied these allegations but never produced evidence to prove otherwise. Instead the government would later fork out some M10 million to help pay the farmers he owed.
Shi did not take kindly to that gesture and accused the government of jumping the gun to embarrass his company.

A few weeks ago, he told the government that his company had made double payments to some farmers who were now refusing to cooperate when he demands refunds.
His appeal to the government was however seen as an attempt to deflect attention from his failure to pay farmers.

Phapano said the Maseru Dawning “must stop accepting fibre from farmers with immediate effect”.
He said the decision to suspend Maseru Dawning’s licence is a result of numerous fruitless meetings with Shi, the Standard Lesotho Bank and chairmen from owed shearing sheds.

“I wanted to understand their reasons for having failed to pay farmers’ outstanding balances to date,” Phapano said.
Phapano said he asked Shi for a clear time frame in which he would pay the farmers.
The minister said Shi missed the deadline.
“I called another meeting and reminded Maseru Dawning of the initial agreement,” he said.
“I even extended time to give them enough room to sort out things on their side and pay farmers.”

“Up until now payments have not been made. We then decided to suspend their licence because as an issuing ministry the law also allows us to revoke licences.”
Phapano explained that until Shi has paid farmers his company should not accept fibre from any farmer.
“Farmers are demanding their pay and it is clear that the broker is not ready to solve their issue. Their licence had to be suspended to avoid accumulating more problems,” he said.

Phapano said they are looking at bailing the broker out and ensure that farmers get what is due to them.
To try and minimise the chances of farmers suffering like they did in 2018, Phapano said the ministry has embarked on a countrywide initiative to engage with farmers.
“We are basically engaging with farmers to hear from them about their challenges and grievances with the intention of making things easier for them,” Phapano said.

He said the ministry is also working on improving the process of getting a permit to export fibre.
“Civil servants who will issue unlawful licences will be expelled with immediate effect. As the memo released on the 12 clearly states, only the director of marketing or marketing managers will sign prepared documents for acquiring wool and mohair export permit,” Phapano said.

He however said the memo does not stop the sale of wool and mohair outside the country.
Shi could not be reached for a comment.
The Maseru Dawning spokesman Lawrance Keketso told thepost that the announcement came as a shock and they are awaiting further instructions from the management.

Keketso said the suspension is unfair because “it was done without a hearing”.
“The owner did not even know that the licence had been suspended,” Keketso said.
The Lesotho National Wool and Mohair Growers Association (LNWMGA), whose members are owed by Shi, sees the government’s decision as a vindication of what they have been saying about the broker for the past two years.

LNWMGA spokesperson, Khotsang Moshoeshoe, told thepost that the government should have “cancelled the licence because a mere suspension will not change anything”.
Moshoeshoe said he doesn’t believe Shi will pay the farmers.
He said the Ministry of Small Business should clean up Shi’s mess because they supported him when the farmers were complaining about his operations.

“If they are no longer on good terms with that friend of theirs then that is their problem,” Moshoeshoe said.

Nkheli Liphoto

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