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MKM investors reject proposal

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MASERU – ABOUT 1 000 MKM creditors have resolved to fight a proposal by liquidators to repay them with shares in a new company that will be formed out of the remaining properties of the collapsed Ponzi scheme.  The creditors rejected the proposal at a meeting held at Manthabiseng Convention Centre yesterday.
Sekhonyana ‘Stix’ Mosenene, who claims to speak for the creditors, told thepost that the meeting also resolved to pursue the legal route to the “bitter end”.
Mosenene said the meeting was suggested by the High Court which said they should talk to other investors to hear their “opinions and recommendations”.
He said the support for the legal fight against the liquidators was “overwhelming”.

Mosenene said the creditors also want the court to reserve the sale of three MKM properties. The properties were sold for M115 million in May last year.
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.
The buyer was Sekhametsi Investment Consortium, a venture capital company with interests in several businesses in the country.
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.
The building used to house a Nissan Motors dealership.

Mosenene said the creditors believe that they will recoup their losses if the sale is reversed. He also said they want the Central Bank of Lesotho (CBL) to release the money it allegedly confiscated when it closed MKM in November 2007. Despite reviewing thousands of MKM documents held by MKM liquidators thepost has not come across any evidence to suggest that the CBL is holding MKM’s monies. The liquidators who have been verifying MKM’s assets say they know nothing about the alleged funds.

Mosenene said the creditors will also demand that Webber Newdigate, the law firm working with the liquidators, should keep its paws off MKM matters.
The liquidators are suggesting a rearrangement that will see the 10 000 investors whose claims against the company have been verified and quantified owning shares in the new company in exchange of what they are owed.

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Together, the investors lost M128 million in what is Lesotho’s biggest pyramid scheme.
The creditors were supposed to have filed their claims with the MKM estate on June 29 in preparation for a July 23 meeting to discuss the rearrangement.
But Advocate Qhalehang Letsika, one of the liquidators, said they will issue a notice next week to postpone the creditors’ meeting.
Advocate Letsika said the impending lawsuit from some creditors was the main reason for the postponement.

“It is highly unlikely that the case coming to the court on July 20 will be finalised by July 23 so we have to push the date,” Advocate Letsika said.
The other reason for the postponement, he said, was the abrupt resignation of Advocate Salemane Phafane as chairman of the creditors’ meeting.
“The court has to appoint another chairperson so that might take some time.”
Advocate Phafane was preparing for the meeting when he was stung by false allegations that he was compromised because his wife was a member of the Investors’ Trust that supported MKM’s liquidation.

Advocate Phafane said although he had proven that these allegations were incorrect he found it impossible to continue as chairperson.
An unsigned statement published in a local weekly last week repeated the allegations against Phafane’s wife.
The statement carried a scanned copy of what was claimed to be evidence that Phafane’s wife, Matsuna Pontso Phafane, was a member of the Investors’ Trust.
It however appears that the document had nothing to do with the Investors Trust.

The document titled ‘Application form for MKM Bursary Scheme’ is on a Star Lion Funeral Centre letterhead, indicating that it was probably a normal investment like those made by hundreds of thousands of other Basotho.
Advocate Letsika said the creditors who want to reverse the sale of MKM properties are being misled because that is not possible.
“The auctioning of those three properties was done legally so there is no way the sale can be reversed,” Advocate Letsika said.

He said there is no way the High Court could withdraw the liquidators’ mandate because they were appointed lawfully by the same court.
“As for the funds they are claiming to be held by the Central Bank of Lesotho I can tell you that as a liquidator I don’t know of those funds. It’s the first time I am hearing about that,” he said.
“The truth is that this is just mudslinging that will not help the creditors. The majority of the creditors support the holding of the meeting to discuss the proposed arrangement.
As far as I can see those against the meeting are just a handful of creditors who are hurting the majority of the creditors.”

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Advocate Letsika said the new case filed by some of the creditors will increase the liquidation costs of the MKM.
“They keep bringing cases against the liquidators but they argue that we are spending a lot of money on hiring lawyers and other experts. It is the estate that will pay to defend such cases and that only means they are taking from the same small pool that is left. These cases are self-defeating.”

He said what makes the MKM case complicated is “because no one was prosecuted for creating and running the Ponzi scheme”.
“It was clear from the onset that this was a Ponzi scheme. Were this another country those people who started, invested and benefited from MKM would have been prosecuted”.
Any attempt to reverse the sale of the properties is likely to be hotly contested by the buyers, some of whom have since started preparing the buildings for occupation.

Nkheli Liphoto

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Knives out for Molelle

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MASERU

KNORX Molelle’s appointment as the Director General of the Directorate on Corruption and Economic Offences (DCEO) in February 2023 could have been illegal.

The Law Society of Lesotho has told Prime Minister Sam Matekane that Molelle was appointed without being admitted as a legal practitioner in Lesotho, as required by law.

The society claims the information came from a whistleblower on January 2 and was corroborated by its roll of legal practitioners in Lesotho.

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The society says the appointment violates section 4 of the Prevention of Corruption and Economic Offences Act 1999 which states that a person shall not be appointed as the DCEO director general unless they have been admitted as a legal practitioner in terms of the Legal Practitioners Act.

In the letter, Advocate Ithabeleng Phamotse, the society’s secretary, tells Matekane that this requirement “is not a mere procedural formality but a substantive qualification essential to the lawful appointment of the Director General”.

“The absence of such qualification fatally impairs the appointment ab initio, rendering it null and void from the outset,” Advocate Phamotse says in the letter written on Tuesday.

The society argues that if left unaddressed the illegality undermines the credibility, effectiveness and legality of the DCEO’s operations and exposes the kingdom to serious risks, including challenges to the lawfulness of decisions and actions made by Molelle.

“Should it be confirmed that the appointment was made in contravention of the mandatory legal requirements,” Advocate Phamotse said, “we respectfully urge you to take immediate corrective action to rectify this glaring irregularity”.

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Advocate Phamotse tells the prime minister that if the appointment is not corrected, the society would be “left with no alternative but to institute legal proceedings to protect the interests of justice and uphold the rule of law in Lesotho”.

“We trust that you will accord this matter your highest priority and act decisively to avert further damage to the integrity of our governance structures.”

The Prime Minister’s spokesman, Thapelo Mabote, said they received the letter but Matekane had not yet read it yesterday.

Matekane is on leave and is expected back in the office on January 14.

Questions over the validity of his appointment come as Molelle is being haunted by the damaging audio clips that were leaked last week.

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The clips were clandestinely recorded by Basotho National Party leader, Machesetsa Mofomobe.

In some of the clips, Molelle appears to be describing Matekane and his deputy Justice Nthomeng Majara as idiots. He also appears to be calling Law Minister Richard Ramoeletsi a devil.

In other clips, he seems to be discussing cases. thepost has not independently verified the authenticity of the audio clips.

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Massive salary hike for chiefs

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MASERU

THE government has increased the salaries for traditional leaders by a massive 88.5 percent.

This means that a village chief not appointed by a gazette will now earn M3 001 a month, up from the previous salary of M1 592. That means village chiefs will now earn an extra M1 409 per month.

A village chief, or headman, appointed by a gazette has moved from M1 966 to M3 567 per month.

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Above a village chief is one with jurisdiction over a small cluster of villages, a category three chief, who now moves from M3 768 to M5 181 per month.

A category four chief, known as ward chief, has moved from M4 455 per month to M7 993.

The category five chief, who reports directly to a principal chief, will now earn M10 674, up from M9 939 per month.

There is no increment for principal chiefs.

The government says the budget for chiefs’ salaries has moved from M129.4 million to M208.3 million annually.

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The hike follows a series of discussions between the Lesotho Workers Association, representing the chiefs, and the Ministry of Local Government and Chieftainship.

The revised salaries will be implemented with effect from April 1, 2025.

According to the settlement agreement, a discussion about raising the lowest salary of M6 000 for the lowest-ranking chiefs will be revisited in October 2025.

Chiefs who spoke to thepost have expressed satisfaction with the hike, saying it will significantly improve their lives.

Chief Mopeli Matsoso of Ha-Tikoe in Maseru said his previous salary of M1 500 per month would now be doubled, which would improve his life and help provide smoother services to the community.

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He stressed that they used to close the offices while going out looking for jobs to compensate for their little salaries.

“Now the people will get smoother services,” Chief Matsoso said.

“The offices will forever be open,” he said.

Chief Matsoso said the salary hike will also serve as a motivation for other chiefs.

Chief Tumo Majara of Liboping, Mokhethoaneng, also expressed his gratitude.

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Chief Majara acknowledge the positive impact the salary review would have, especially as a new officeholder.

“I guess we are all happy, that review will help a lot,” he said.

The Principal Chief of Thaba-Bosiu, Khoabane Theko, said the salary increase of chief is a welcome move by the government.

“I’m yet to study how the new salary structure looks like. But I welcome it as a good move by the government,”Chief Theko said.

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Maqelepo says suspension deeply flawed

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MASERU

Motlatsi Maqelepo, the embattled Basotho Action Party (BAP) deputy leader and Tello Kibane, who was the party chairman, have rejected their suspension from the party arguing it was legally flawed.

The BAP’s central executive committee on Tuesday suspended Maqelepo for seven years and Kibane for five years. The suspensions became effective on the same day.

The party’s disciplinary committee which met last Wednesday had recommended an expulsion for the two but that decision was rejected with the committee pushing for a lengthy suspension.

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Maqelepo’s suspension will end on January 7, 2032 while Kibane’s will run until January 7, 2030.

Their suspension letters from the BAP deputy secretary general Victoria Qheku, say they should not participate in any of the party’s activities.

“In effect, you are relieved of your responsibility as a CEC member and BAP deputy leader,” Maqelepo was told in the letter.

“You were found guilty by default on all charges and the committee recommended your immediate dismissal from the party,” the letter reads.

On Kibane, the verdict states that the committee decided to mitigate the recommended sanction by reducing his suspension to five years.

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“In the gravity of the charges, the suspension affects your membership in the BAP parliamentary caucus from which you are removed as a chairman.”

They were suspended in absentia after they refused to attend the disciplinary hearing, which they said was illegal.

In response to the suspension, Maqelepo wrote a letter addressing the BAP members in general, defying the committee’s decision to suspend them.

He has called for a special conference, appealing to party constituencies to push for it, citing the ongoing internal fight that includes the leadership’s decision to withdraw the BAP from the coalition government.

Maqelepo also said the central executive committee is illegally in a campaign to dissolve committees in the constituencies and replace them with stooges.

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He reminded the members that there is a court case pending in the High Court seeking an interdiction to charge them in the party’s structures without approval of the special conference that he is calling.

He said the party leadership should have awaited the outcome of the case before proceeding with any disciplinary action.

“The party that is led by a professor of law continues to do dismissals despite the issue being taken to the courts,” Maqelepo said.

The party leader, Professor Nqosa Mahao, is a distinguished professor of law.

Maqelepo said they would write the central executive committee rejecting its decision to suspend them, saying they will continue taking part in party activities.

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He said their fate in the party is in the hands of the special conference.

He appealed to all the party constituencies to continue writing letters demanding the special conference.

Both Maqelepo and Kibane received letters on November 28 last year inviting them to show cause why they should not be suspended pending their hearing.

They both responded on the following day refusing to attend.

Maqelepo, Kibane, Hilda Van Rooyen, and ’Mamoipone Senauoane are accused of supporting a move to remove Professor Mahao from his ministerial position last year.

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They were part of the BAP members who asked Prime Minister Sam Matekane to fire Professor Mahao, who at the same time was pushing for the reshuffling of Tankiso Phapano, the principal secretary for the Ministry of Energy.

When Matekane ignored Professor Mahao’s demands, the latter withdrew the BAP from the coalition government much to the fierce resistance of the party’s four MPs.

Maqelepo started touting members from constituencies to call for a special conference to reverse Professor Mahao and the central executive committee’s decision.

The central executive committee issued a circular stopping Maqelepo’s rallies but he continued, with the support of the other MPs.

In the BAP caucus of six MPs, it is only Professor Mahao and ’Manyaneso Taole who are supporting the withdrawal from the government.

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