MASERU – THE Lesotho Electricity Company (LEC) bought second-hand cables worth M1.2 million from a catering company in South Africa.
The transaction, made on April 1 through single sourcing, was revealed during the Public Accounts Committee’s hearing on the LEC this week.
It raised serious questions about procurement integrity, oversight failures and possible fraud. How HDM Catering, based in QwaQwa, got the second-hand 4-core electrical cable, is unclear.
There is also no history of it supplying electrical equipment to the LEC.
The LEC management however defended the transaction, claiming that the cable was not available on the market for months and urgency necessitated the purchase.
But the suspended LEC Head of Finance, ’Makabelo Matsoso, contradicted that explanation, telling the committee that she had rejected the transaction before her suspension in March this year.
“I received the request to buy the cable from HDM Catering but I refused,” Matsoso said, adding that the deal was signed off immediately after her suspension.
Matsoso told the committee she was concerned about the supplier’s dubious address and insisted that the cable be sourced directly from manufacturers.
PAC chairperson ’Machabana Lemphane-Letsie questioned how a catering business could supply electrical components that are not available from licensed suppliers.
“You bought a cable from a fat cake-producing company. This shows there is criminality here,” she said.
“The caeble may even be a stolen property, possibly from Eskom, and you should expect legal action.”
South Africa is grappling with the theft of cables and electrical equipment.
What also baffled Lemphane-Letsie were the inconsistencies in the documentation.
She noted that the procurement approval and delivery were both dated 1 April, despite the long distance from QwaQwa to Maseru.
“How did it arrive so conveniently from Letšis Hoek Street in QwaQwa on the same day it was approved?”
Ntsie Maphathe, the acting managing director, admitted that Matsoso rejected the transaction.
“I am ashamed that this happened. But I eventually signed because the procurement committee had already approved the deal,” Maphathe said.
“We had struggled for months to find this cable. Multiple suppliers told us it was out of stock.” Maphathe claimed he was unaware that HDM Catering was a catering company and insisted that the price escalation had not been disclosed to him.
“I agree that it is not right. But we were under pressure and opted for single sourcing.”
Acting board chairman, Thabo Khasipe, distanced the board from the transaction. He said the board will act now that they are aware of the transaction.
“This clearly shows there is no internal control at LEC,” Khasipe said.
PAC member Lephoi Makara presented documentation showing that HDM had initially quoted M700 000 for the cable but the price suddenly escalated to M1.2 million.
This, Makara said, suggested “criminal intent”.
“This implicates you directly, Managing Director,” Makara stated.
Machesetsa Mofomobe, who is not a PAC member but is allowed to attend its hearings, praised Matsoso, the suspended head of finance, for standing her ground.
“She refused when something suspicious was happening. But right after her suspension, the deal went through. That points to deep rot,” Mofomobe said.
He said Maphathe’s decision to continue with the transaction raised questions about his credibility and the integrity of the board.
“You may be competent but from where we sit, it looks like you are part of this.”
Dr Tšeliso Moroke, a committee member, said the timing of the deal immediately after Matsoso’s suspension was highly suspicious.
“This board and management are not solving the problem, they are making it worse,” Dr Moroke said.
Nkheli Liphoto
