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Shi’s licence suspended

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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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Mahao, PS in big fight

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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

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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

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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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