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New mall in fierce legal storm



MASERU-THE Masianokeng Lifestyle Centre, whose roof was blown away by heavy winds on Tuesday night, has been caught up in yet another fierce legal storm.

This time it is the owner, Mphoto Thabane, through his MPP Holdings (Pty) Ltd, who is squaring off against the contractor, Afro-Asia Engineering.
Afro-Asia Engineering is owned by a Chinese businessman, Li Wen Shu.
At the centre of the dispute is a M52.1 million claim by Thabane from Afro-Asia Engineering which was tasked with building the new mall.

On the other hand, the contractor, Afro-Asia Engineering, is claiming that Thabane owes it M52.5 million.
Li Wen Shu has refused to hand over part of the mall until Thabane pays him.
Thabane says the contractor delayed to complete building and as a result he suffered losses to the tune of over M52.1 million.

The contractor says the mall owner caused the delays and therefore he cannot be held accountable.
In an urgent application filed in the Commercial Court, Shu said his company carried out the work until there was a lockdown ordered by the government on March 29 due to the Covid-19 pandemic.

Shu said on March 27 Lethola Cost Associates had issued a valuation for payment certificate so that MPP Holdings could pay him more than M52.5 million he had worked for.
He said when the MPP Holdings was supposed to pay, Thabane informed him that the financier, Nedbank Lesotho, wanted to do a valuation of the work but its expert could not leave South Africa because of the lockdown.

He said in July Thabane emailed him a payment certificate which showed that he was now demanding that Afro-Asia Engineering should pay him what he called penalties for delaying to complete the work.
Afro-Asia Engineering disputed that it was responsible for the delays.

Lawyers between the two sides met to resolve the matter but still they could not agree.
“The employer (MPP Holdings) was blaming the contractor and the contractor was blaming the employer,” Shu said in an affidavit.
“The employer flatly refused to make a payment to the contractor. It instead suggested that the contractor should agree to a scheme where the employer would pay selected sub-contractors directly,” he said.

“This the (Afro-Asia Engineering) rejected and declared a deadlock to the negotiations. The meeting ended abruptly.”
Shu said the penalties his company was slapped with meant that for not completing the building now housing Pick and Pay on March 15, 2019 it would pay MPP Holdings M50 000 per day until completion.

For the part that would house Cash Build his company would pay the mall owner M35 000 per day until completion, for failing to end it on April 12, 2019.
For the other section, which is for a line of shops, the deadline was April 12, 2019 while a daily penalty for not meeting the deadline was M20 000.

Section 4, which refers to the completion of the whole work, was to be completed on July 2, 2019 failing which he would have to pay M20 000 as a daily penalty until completion.
“Identical penalties are levied in respect of delays to achieve what (MPP Holdings) has called beneficial occupation in terms of C39 in the bill of quantities,” he said.

Contesting that he is not guilty of any delays, Shu said “the delays were caused by the employer and (his company) cannot be saddled with the employer’s fault”.
“The penalties are illegal and unenforceable,” he said.
He argued that “the sums were fixed in order to terrorise and compel (his company) to complete the work for fear of penal consequences”.

“Indeed, the fact that the various sums are described as penalties is a strong indication that is just what they are,” he said.
Shu said the amount per section for both practical completion and beneficial occupation “are unconscionable and extravagant in comparison to the greatest loss that could reasonably be incurred by” MMP Holdings.
“Penalties have no relationship to loss of rentals at all,” he said.

Shu said that the MMP Holdings refusal to pay and demands for an amount which is nearly the same as the total tender sum “is clear evidence of unconscionable conduct that is not just an attempt to unjustly enrich itself, but also borders on fraudulent conduct”.
Shu said the MPP Holdings “states in its report of the 13th July 2020 that there were delays caused by it and (Afro-Asia Engineering)”.

“The report is silent about the length of the delays caused by the (MPP Holdings), and a reduction of the purported penalties to reflect the (MPP Holdings)’ fault,” he said.
“This is not contractually permissible.”
Shu said the MPP Holdings “extended the scope of work among other things which caused huge delays”.
He said the walls of Pick and Pay were all built to completion using cement bricks as specified in the original plans but the MPP Holdings wanted face bricks.

“The completed walls had to be demolished and rebuilding re-done,” he said.
Shu said he wishes to exercise his company’s right to retention of the building until MPP Holdings pays him.

Thabane, on the other hand, told the court in an affidavit that the Afro-Asia Engineering “had in July 2020 voluntarily abandoned the project”.
“They together with all sub-contractors have since left the construction site,” Thabane said.
He said any of the Afro-Asia Engineering rights and interests borne by its construction and possession of the place “were and still are voluntarily waived”.

He said the penalties were determined with the intention of fulfilling two important things: to put pressure on Afro-Asia Engineering to fulfill the contract time and to compensate the MMP Holdings for anticipated losses in case of breach by the contractor.

“The provision of the penalties stipulated in the Principal Building Agreement was agreed between two commercial parties of equal bargaining power,” he said.

He said the penalties were based on anticipated loss of revenue and profit, additional project administration costs and others.

Itumeleng Khoete

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Mahao, PS in big fight



PRIME Minister Sam Matekane this week summoned the Basotho Action Party (BAP) executive committee in a bid to defuse simmering tensions within the party.
This comes amid fears that Professor Nqosa Mahao’s fallout with his principal secretary at the Ministry of Energy, Tankiso Phapano, could threaten the unity in the BAP and the government’s stability.

thepost can reveal that Mahao has hinted that he would resign if Matekane doesn’t fire or reassign Phapano.

But there are strong indications that Mahao doesn’t enjoy the backing of his executive committee and MPs in his fight with Phapano.

Inside sources this week told thepost that some members of the BAP’s executive committee and MPs are openly siding with Phapano and have been secretly lobbying Matekane to reshuffle Mahao from the Ministry of Energy to Sports.

A source said Mahao is aware of these manoeuvres, including a clandestine meeting in Maputsoe, and has said he would rather resign than be the subject of a humiliating reshuffle instigated by people he leads.

The source of the bad blood between Mahao and Phapano is not clear but it is understood that they have disagreed over tenders and the ministry’s direction.

The source said Matekane was first briefed of the running battles at the ministry some three weeks ago just as matters were coming to a head.

It is the second briefing which revealed a complete breakdown in the relationship that triggered Matekane’s meeting with the BAP’s executive committee and MPs on Monday.

Three people who were in that meeting said Matekane told the BAP officials to deal with the crisis before it affected the ministry and threatened the coalition government’s stability.

The BAP’s executive committee, including MPs and Mahao, then had a marathon meeting to discuss ways to make peace between Mahao and Phapano.

A source who was in that meeting said “it was clear to Mahao that the majority of the committee and the MPs were on Phapano’s side”.

“Mahao quickly realised that he did not have the backing of the majority and took a conciliatory approach. It was clear that the committee would rather have him resign than get Phapano removed from the ministry,” the source said.

“In the past Mahao had flatly refused to reconcile with Phapano because of seniority. But this time he appeared to be open to a meeting to discuss reconciliation.”

Both Mahao and Phapano told thepost last night that their relationship was still cordial. ‘“We are still in good books with Phapano until further notice,” Mahao said.

“However, we cannot predict the future.”

Mahao denied ever discussing Phapano’s dismissal or transfer with Matekane.

Phapano also insisted that he was working well with Mahao.

“We are still on good terms,” Phapano said, adding that the allegation that they were fighting was “baseless”.

The fallout between Mahao and Phapano has been quick and spectacular.

The two had been almost inseparable months before Mahao agreed to join the coalition government.

Phapano would use his car to drive Mahao around. They would attend party meetings together. Some party insiders saw Phapano as Mahao’s right-hand man and adviser.

Mahao allegedly strongly pushed for Phapano to be appointed as his principal secretary when he became energy minister.

But sources said Mahao started having second thoughts days after recommending Phapano and tried to get his appointment reversed but it was too late.

A source says within weeks Mahao was telling cabinet colleagues that Phapano had captured the ministry and he was unable to function as the minister.

“He started pushing to oust Phapano within days because they were already clashing. It’s been war from the first days,” said the source.

Staff Reporter

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How chicken import ban hit vendors



MALESHOANE Pakela used to work at small backyard chicken farms where she was paid with chicken heads, necks, legs, and offals that she would roast and sell to factory workers at the Thetsane Industrial Area.

Her job was to clean and pack chicken.
The profit wasn’t much but just enough for the 37-year-old widow to feed and keep her four children in school.

“It also covered her monthly rental of M150 for a room in Ha-Tsolo Sekoting.

Her life was however shattered last October when the government imposed a ban on chicken imports from South Africa following an outbreak of bird flu.
Without day-old chicks the farms quickly shut down, cutting Pakela’s supply of heads, necks, legs, and offals.
Within a few days, her family was starving.

Pakela had been struggling even for months before the ban. The closure of the factories and retrenchments of thousands of workers has severely hit her sales. She was behind on her rent and could barely feed her children.

The partial lifting of the chicken ban has not helped Pakela because her former employers still cannot import day-old chicks or live birds.
Pakela and a family were kicked out of their rented room in November when their arrears were about M1 000.
She has found another room nearby.

A ‘Good Samaritan’ has allowed her to use a room for free until she can afford the rent. But Pakela says she still feels obliged to pay something because she understands that things are hard for everyone.

“Here the rent is still M150 but the landlord accepts every amount that I give her,” Pakela says.
There are days when her children go to bed hungry.

“I have told them (children) that if I have nothing they should accept (the status).”

She now survives on handouts from neighbours and other well-wishers. Pakela’s poverty is apparent.

Barefoot and holding her small child in a seshoeshoe dress, Pakela says her two children usually go to school without eating.
The other child has dropped out of school because she doesn’t have shoes.

’Mako Lepolesa, 44, who has been running a chesanyama (meat grill) at the Maseru West Industrial Estate since 2018. The father of three says his clients are mainly taxi drivers and factory workers.

Chicken was her main product until last October when the ban was imposed. It wasn’t long before his business started wobbling.

“I thought it would be just a short-lived problem (chicken import ban) but it passed on this year,” he says, adding that it might take months for his business to recover.
Moshe Ramashamole, 42, who also owns a chesanyama in the Maseru West Industrial Estate, tried to remain in business by sourcing chicken from local farmers.

It was a stopgap measure that however lasted a few weeks because the farmers also ran out of stock. He resorted to bad chicken but they were double the price of a full chicken before the ban.
Yet Ramashamole thought he could make it work by increasing the price of his plate from M35 to M55. The customers however resisted the new price and Ramashamole had to take the losses.

The poultry ban did not affect street vendors like Pakela alone.
Former Minister of Communications, Khotso Letsatsi, is one of those poultry farmers struggling following the chicken ban.

He ventured into poultry in January last year. It was an audacious venture that included a M100 000 investment in a shelter and other equipment.
He started with a batch of 300 chicks and had reached 1 000 by the time the ban was imposed.

“The business was lucrative,” Letsatsi says.

“I had to employ two people permanently to assist me on a full-time basis,” he says.

When it was time to slaughter the chickens, Letsatsi says he had to employ seven casual labourers.
Since the ban was imposed he had released all his workers.

“I do not know where they are now. Maybe they are starving,” he says of the workers he released.

Letsatsi doesn’t know how he will revive his business.
The Director of Marketing in the Ministry of Agriculture and Food Security (MAFS), Lekhooe Makhate, says the ban has been devastating to farmers and businesses.

“Some big businesses are going to declare less tax to the government because there was no business,” Makhate says.

He says Lesotho spends M2.1 billion on the importation of chicken and its products from South Africa every year.
But that amount usually soars to M4 billion depending on the market forces of demand and supply.

Makhate says the M2.1 billion goes to South Africa where the chicken and its products are imported.

At the height of the scarcity of chickens in the country, Makhate says people were supposed to make initiatives to travel to villages to search for chickens.

“There is not enough production of chickens in the country,” he says.
“Economically speaking we rely on South Africa. We have to be self-reliant.”

Majara Molupe

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Letseng fends off threat to sue



LETŠENG Diamond says it is under no obligation to advertise jobs for Basotho to provide certain services “where it has the capacity to undertake the same services”.
Letšeng Diamond boss, Motooane Thinyane, was responding to a threat to sue by a little-known political party called Yearn for Economic Sustainability (YES).

Matekane’s company, the Matekane Mining Investment Company (MMIC), had been providing blasting, haulage and drilling services at Letšeng mine since 2005.
The deal with the MMIC was terminated in December last year with the mining company saying it was improper because Matekane had now become a politician.

Letšeng Diamonds announced that it had reached an agreement with the MMIC to acquire its mining equipment at the mine and offered employment to its current employees in line with operational requirements.

“This will enable Letšeng to continue with its mining activities,” the company said in its statement.

This infuriated opposition parties that argued that the mine should have called interested Basotho companies to bid for the contract, saying it is provided for in the Minerals Act of 2005.

The leader of Yearn for Economic Sustainability (YES), Molefi Ntšonyana, wrote the mine last week threatening to sue for allegedly failing to follow section 11 of the Act.
Ntšonyana argued that the Act “does not grant the Letšeng Diamond 100 percent to mine with its good own equipment” but it should engage Basotho companies like it did with the MMIC.

Ntšonyana said Letšeng Diamond and the MMIC made the agreement to acquire the MMIC equipment so that the mine could continue with its mining activities “without any advertisement to seek qualified Basotho to provide such services”.

Ntšonyana said the agreement unilaterally denied Basotho a chance to tender for such services and ignored the fact that the government of Lesotho on behalf of Basotho own 30 percent in the Letšeng Diamond.

“It is advisable to reconsider your decision,” Ntšonyana said, adding that they would also write to the mining board requesting the resolution they made regarding this matter of insourcing mining activities.

He said the company should adhere to section 11 of the Mines and Minerals Act of 2005 and within 14 working days the matter should be reconsidered, “failing which we will have no choice but to drag the company to the courts of law”.

In his response, Thinyane said Ntšonyana must “revisit the section in question in full for its correct interpretation”.

“Letšeng Diamond is under no obligation to advertise to seek qualified Basotho to provide services where it is willing and has the capacity to undertake the same services,” Thinyane said.

He said the decision relating to the agreement referred to has been through the necessary governance structures and is therefore procedural.
Thinyane said Letšeng is a corporate citizen that is fully compliant with the laws of Lesotho.

Majara Molupe

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