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Deadline for MKM investors

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MASERU – MKM creditors have until the end of this month to register their claims with the liquidators or lose everything they invested in the collapsed Ponzi scheme.
The registration will allow the creditors to become shareholders in the company that the liquidators are proposing to form out of the remaining properties of MKM.
Creditors will convert their claims against MKM into shares in the new company.

But for that to happen they have to register their claims before the June 29 deadline, according to Attorney Qhalehang Letsika, one of the liquidators.
Claims are being lodged at Webber Newdigate’s offices, at the Metropolitan Building opposite the State Library.

“If you don’t register it means you will not be a shareholder in the new company,” Letsika said.
He said after the registration is closed creditors will have a meeting on July 23 to approve the arrangement. The arrangement will still need the High Court’s approval before the new company is formed.

Letsika said those who have proof that their deceased relatives were investors in MKM should also register claims.
“Who will benefit from those shares in the new company will be determined by the inheritance laws of the country.”
The High Court has appointed Advocate Salemane Phafane as chairman of the creditors’ meeting.

Letsika said once the registration has closed there will be no opportunity for creditors to lodge claims against the MKM estate.
The arrangement, he said, was the only way for the MKM creditors to recoup their losses.

“After selling some of the assets MKM had to pay some contractors and suppliers. There was also a huge administration fee. That left next to nothing for the creditors,” he said.
“Even if we were to sell the remaining properties the money we will raise is not enough to pay even a quarter of what MKM owes to its creditors.”
“The formation of a company in which the creditors own shares was therefore the best option available. That way they can recoup their losses in the long run and also get to invest in other areas or buy more properties to grow their business.”

How much a share in the new company is worth is yet to be decided. Court documents however show that there are nearly 10 000 investors whose claims against the company have been verified and quantified. Auditors have estimated that these investors lost M128 million.

To qualify for shares in the new company creditors will be required to produce records of all transactions with the MKM companies.
Such documents include receipts, contracts and bank transfers which should tally with the transaction records held by the liquidators.
Last year the liquidators raised M115 million from the sale of three MKM properties.

The former Agric Bank building, along Kingsway road opposite Queen Elizabeth II Hospital, and in which FNB Lesotho is the main tenant, was bought for M58 million by Sekhametsi Investment Consortium, a venture capital company.

The new and yet to be occupied building opposite Pioneer garage and next to Sparrows Bar was bought for M43 million by Executive Transport, a haulage company.
Executive Transport also paid M14 million for the dilapidated building opposite Selkol along Moshoeshoe Road.
thepost understands that nearly half of what was raised went to a company that was hired to reconstruct MKM’s shambolic financial records.

In justifying the proposed arrangement the liquidators claim that the cost of administration of the MKM Star Lion Group Estate “have been high because of inadequate books and records that had to be reconstructed and because of various legal battles and the need to protect the estate and creditors from various attempts to disrupt the estate”.
“If the liquidation is to continue it is likely that further substantial costs will be incurred.”

They say trying to recover money from those who made profits from the MKM scheme will cost much more and the process could drag on for several years while the rate of recovery is unknown.
The rearrangement, the say, is therefore a compromise that will allow creditors to own shares in the new company and have a chance of clawing back their losses through dividends.
“If the rearrangement is rejected, the expected dividend to concurrent creditors is unlikely to exceed a few cents in the Loti.”

The liquidators tout the rearrangement as a simple process that will allow creditors to prove their claims on the basis of the records held by the liquidators. They however warn that they cannot guarantee that the new company will make a profit because some business assumptions might be wrong.
On the disadvantages of the deal the liquidators say once the rearrangement is approved the creditors would have accepted that the MKM estate is insolvent and they can no longer have claims against it. They will only have rights in the new company. This means that the liquidators will not be able to launch legal proceedings against investors who made profits from the MKM schemes.

Staff Reporter

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Police hunt former minister

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THE police have launched a hunt for former police minister, Lepota Sekola, who is suspected of involvement in stock theft.
Police want to arrest Sekola in connection with two cattle carcasses that were found at his grandfather’s funeral in Borokhoaneng three weeks ago.

During the initial interview, Sekola had insisted that the cows belonged to his late grandfather who had kept them in South Africa for better pastures.

The police didn’t arrest him at that time because investigations were still in the early stages. Further investigations have however led the police to believe that the animals were stolen from South Africa.

But when they were ready for the arrest, Sekola could not be found at his home or on his phone.

Police say Sekola will be charged with unlawful possession and illegal importation of two cows from South Africa.

The National Stock Theft Coordinator, Senior Superintendent Mapesela Klaass, told thepost last night that they “have completed investigations but he (Sekola) is nowhere to be seen”.

“We cannot get him on his mobile phones,” S/Supt Klaass said, adding that the police have been “visiting his home but he is not there”.

“His family members are aware that we are looking for him,” he said.

S/Supt Klaass said they are continuing with their search and as soon as they find him, they are going to drag him to the courts.

He said the police suspect the cows were brought from South Africa to be slaughtered for Sekola’s grandfather’s funeral.

Police sources told thepost that one of the cows had new branding while another had nothing. Both had holes on the ears that signalled that they used to have ear tags.

Majara Molupe

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Magistrate saves WILSA boss

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A Maseru magistrate, Nthabiseng Moopisa, this week stayed the criminal prosecution of Advocate ’Mamosa Mohlabula who is accused of tax evasion, money laundering and corruption.

In her application Advocate Mohlabula, who is the director of Women and Law in Southern Africa (WILSA), said the Director of Public Prosecution (DPP) should not charge her pending finalisation of her tax evasion case.

Advocate Mohlabula is out on bail after she was formally charged with tax evasion in July last year.

She told Magistrate Moopisa that the DPP, Advocate Hlalefang Motinyane, was wrong to have agreed with the Director General of the Directorate on Corruption and Economic Offences (DCEO) to bring charges against her.

“In my viewpoint, the DCEO cannot be heard to charge me in relation to matters already seized with this Honourable Court,” she said in an affidavit.

She also said there is a pending civil case in the High Court in which the DCEO’s abuse of power is referenced, saying the precise way the case is handled will depend “on the way an alleged offence comes to the light”.

“Before that pending case is finalised, DCEO has no jurisdiction to detail me to court over isolated phenomenon of tax evasion and or over grievances of former employees of WILSA,” she said.
Advocate Mohlabula was charged together with the WILSA’s chief accounting officer.

She argued that it was WILSA that was being investigated, not individuals, further saying that was “a significant safeguard that the DCEO was impartial from an objective viewpoint”.

“To exclude any legitimate doubt in this respect the DCEO returned the items it seized from WILSA,” she said.

“This was a realistic and practical step towards administering justice and to avoid premature embarrassment to the management of WILSA.”

She said the Board of Trustees of WILSA were sent briefing notes which in certain respects reflected that the DCEO returned the properties of WILSA without warning them that they were suspects.

“In any event, we proceeded to fashion our arguments before the High Court. There was, and could be, no evidence to back up the decision of the DCEO to apply for the search warrant,” she said.

Advocate Mohlabula said before they took the matter to the High Court, she cooperated with the DCEO and it conducted an inquiry into the alleged crimes.

“Now that the matter is pending before the High Court, there is no more reason for the DCEO to remand me before the pending cases are finalised,” she said.

Staff Reporter

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Mphaka barred from ABC deputy’s race

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THE All Basotho Convention (ABC) has barred former Government Secretary Moahloli Mphaka and three others from contesting for the deputy leader’s position at an elective conference set for this week.
The three are Kefeletsoe Mojela, Katleho Molelle, and Lekhetho Mosito.

Mosito was an MP who was appointed Defence Minister for a day and removed the following day during Dr Moeketsi Majoro’s premiership.
The elective conference is set to be held at the Leqele High School hall this weekend.

A circular from the ABC said the three did not qualify to enter the race because they had not held any positions in the party’s committees.

The decision to bar the three is reminiscent of the same tactics that saw former leader Thomas Thabane block Professor Nqosa Mahao from contesting for the party’s deputy leader’s position.
Professor Mahao subsequently walked away and formed the Basotho Action Party (BAP).

A weakened ABC has never recovered from that split.

Mphaka and his colleagues were vying for the deputy leader’s position until they were stopped in their tracks by the circular which was issued out on Monday this week.
Dr Pinkie Manamolela is the current deputy leader.

She was plucked from the women’s league to replace Dr Majoro who had resigned from the national executive committee after losing the leadership race to Nkaku Kabi in 2022.

There is a high chance that the four could drag the ABC to court to assert their right to contest. The legal wrangles will likely destabilise the party that is still smarting from a thorough thrashing in general elections held in October 2022.

Mphaka this week told thepost that he will challenge the decision to block him in the courts of law.
“They are crazy people,” Mphaka said.

“I will not allow this to happen,” he said.

“I have already instructed my lawyers to launch an urgent application in the High Court to challenge the decision before Friday this week.”

He complained that it was not clear why the party had decided to kick him out of the race after he spent a lot of time and resources campaigning.

Mphaka said the national executive committee “usually allows members to contest for positions without considering whether they were ever in the constituency committees or not”.

The contenders in the race are former Water Minister Samonyane Ntsekele, ex-Police MP Lehlohonolo Moramotse, former Minister in the Prime Minister’s Office Leshoboro Mohlajoa, and Maseru Star Taxi Association member Sekhonyana Mosenene.

A member of the national executive committee told thepost that “many of us support Mphaka and Kefeletsoe at all costs”.

“We were dismayed when we saw the circular removing the duo from the race,” he said.

He said many ABC members were rallying behind Mphaka because “he has been campaigning even before everyone could start”.

“They know he has lots of followers.”

He said it is unfair that Mosenene has been allowed to run but he has never held any position in any constituency except that he represented his taxi association in the ABC national executive committee.
“Why has he been allowed to contest yet he is just like Mphaka and Kefeletsoe?”

He complained that Sekhonyana, while representing taxi operators in the committee, was eventually made the deputy party spokesman despite not being in any constituency committee after ’Matebatso Doti resigned from the position.

“Mphaka was chosen by the party to lead the 2022 elections campaign teams and develop a party manifesto,” he said.

“He was allowed to do all that without being involved in any party structures.”

The party’s spokesman Montoeli Masoetsa declined to comment.

Dr Manamolela told thepost that “the decision was not made by the party’s national executive committee”.

“I do not want to talk much …but it is not true that the party’s NEC decided to remove Mphaka and Kefeletsoe”.

Kabi could not be reached for comment.

Nkheli Liphoto

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