- Exchange accusations of corruption in Mothae Mine saga
- Minister accused of diverting M113m from deal towards elections
Lekhetho Ntsukunyane
THE vicious feud between Mining Minister Lebohang Thotanyana and Alliance of Democrats (AD) leader Monyane Moleleki has reached a crescendo amid counter accusations of corruption in the awarding of a contract to operate Mothae Diamond Mine in January this year.
Mr Moleleki has also claimed Mr Thotanyana is at the centre of a cabinet-approved scheme to divert US$9 million (about M113 million) paid by Mothae operator, Lucapa Diamonds Company, to a private commercial bank account for nefarious purposes.
However, the minister has denied the allegations, saying the decision to deposit the money in a commercial bank account and not at the Central Bank of Lesotho was above board and meant to develop infrastructure for the mining industry. He also insists the M113 million was not meant to bankroll the election campaigns of parties in the seven-party coalition government as his detractors allege.
Mr Thotanyana counter accuses Mr Moleleki and his acolytes of spearheading an intimidation campaign against him, warning the AD leader he had audio evidence that would expose the “real fraudsters”.
The long drawn out fight to nullify Lucapa Diamonds Company’s contract to operate Mothae Diamond Mine has continued unabated despite the expected resumption of commercial mining before year-end after the mine had been idle since 2015.
Mothae Mine, which is located close to Letšeng Diamond Mine, was put up for sale by the government in February 2016 after prospective buyer, Paragon Diamonds Limited had failed to secure the requisite funding within the given time frame.
Paragon had made an agreement in July 2015 with Mothae’s erstwhile majority owner, Lucara Diamond Corporation, to purchase its original 75 percent stake in Mothae for US$8.5 million (about M92.42 million).
However, after the deal fell through, the government temporarily assumed 100 percent ownership of the mine and asked potential investors to submit their Expression of Interest letters for the acquisition of the mine.
Announcing the deal in January, Mr Thotanyana had said the Australian-listed Lucapa met the government’s terms after the resubmission of bids and assumed 70 percent share ownership of Mothae, with the rest remaining in government hands.
He also explained that securing a partner for the government had taken a long time due to unforeseen challenges that plagued the procurement process. The ministry, Mr Thotanyana said, had to re-evaluate proposals from the five short-listed bidders following a breakdown in negotiations with the recommended bidder Sputnik Investments for the initial award.
Sputnik Investments was initially recommenced for the contract by the Mining Board after beating Trans Hex in the final two-horse race. The two companies eventually lost out after the re-submission of proposals from bidders that included Titanium and Lucapa.
However, the selection of Lucapa this year did not go down well with the losing bidders, who accused the minister of flouting bidding procedures.
Morafe Group Limited, which claims to be affiliated with mining firm Trans Hex Ltd, has since lodged a Commercial Court application seeking nullification of the contract.
In light of the incessant allegations of impropriety, Mr Thotanyana yesterday held a press conference in Maseru to “clear the air” over the Mothae deal.
The minister said the imbroglio started last November when Mr Moleleki, who was then Minister of Police, tried to influence him to award the Mothae mining rights to Trans Hex – a company allegedly linked to the AD activists Mohapi Khofu and Pusetso Borotho.
Mr Thotanyana also accused Mr Borotho, who was a member of the Mining Board of leaking its deliberations to Mr Moleleki.
The Mining minister said he fell out with Mr Moleleki and his acolytes after he refused to budge on their demand. The minister said the intimidation and de-campaigning he was being subjected to was pushing him to expose them.
“The truth of the matter is that I have always said I have information on them, but as a self-respecting person who respects other people I decided not to talk about these issues for a very long time,” said Mr Thotanyana.
“I have always said that somebody very senior in government (referring to Mr Moleleki) has approached me and tried to persuade me to these particular concessions for certain people. I do have those recordings but I decided not to use them because it was not necessary for me at the time to use these recordings. But I have always made reference to them.”
He added: “I was hoping that this thing will go away but this thing is not going away. With recent developments and with elections on the way, it looks to me like it is escalating. I am being tried in the court of public opinion for things that I do not know. It is indeed very true that these people are political activists and it is not a lie that I was approached and I was requested to sway the concession in one particular direction. That is the truth.”
The minister also dispelled social media reports that the M113 million government had received as purchase consideration for the Mothae deal would be channeled to the election campaigns of the seven parties in government. Lucapa is also supposed to inject $60 million (around M840 million) as investment in the project.
He said on 21 February 2017, cabinet approved the opening of a commercial bank account to deposit the M113 million and the establishment of a Project Management Unit (PMU) to manage the funds.
The money, Mr Thotanyana, said would be used to construct geo-sciences lab, the Lesotho Diamond Centre and for mineral exploration.
“Cabinet agreed that the PMU would be monitored by the office of the auditor-general and accountant-general accordingly like many other projects that the government conducted,” he said.
“As a minister, I am not authorised to withdraw the money. I have also heard some claims that some people had already been paid M4 million to manage the account. This issue has taken a political direction filled with lies.”
However, in his response to the minister’s claims, Mr Moleleki started off by denying having any links to any of the companies that made a bid for Mothae. He, however, admitted to having learnt of the tender through Mr Borotho.
“Mr Borotho complained to Hon. Moleleki that the Minister of Mining had approached him, and had directed him that he should ensure that the board awards the tender for the acquisition of the shares to Sputnik. Mr Borotho was worried that the Minister of Mining was interfering unlawfully in the tender process,” says Mr Moleleki in a statement he issued yesterday.
“So Hon. Moleleki indeed approached Minister Thotanyana just to advise him not to interfere with the board when it awards tenders. This Hon. Moleleki did as a former minister in that Ministry of Mining formerly known as the Ministry of Natural Resources.”
But instead of taking the advice, Mr Moleleki said, the minister decided to fire Mr Borotho from the Mining Board.
“Further, the minister also showed direct interest when he, without the recommendation of the board, awarded the tender to the company called Sputnik.
“This was unlawful because the minister should award the tender following the recommendation of the Mining Board, in this case Hon. Thotanyana awarded the tender without the recommendation, this is a clear demonstration of a direct interest that the minister had in Sputnik as a company.”
Mr Moleleki stipulates some of the reasons Mr Thotanyana had an interest in awarding the shares to Sputnik.
“In the first instance, the Minister showed direct interest when he awarded the tender without the recommendation of the board.
“But the Minister of Mining had even more sinister interests, he is actually benefitting financially from deals with Sputnik.
“Two companies that belong to the minister are doing business with companies related to Sputnik. There is a company called Thotanyana Construction services that is being paid M50 000 monthly from Storm Diamond Mines where Sputnik has shares. The company that belongs to the mining minister is doing business with Sputnik.”
The AD leader also claims that Mr Thotanyana has another company Premier (Pty) Ltd “which is doing business with the Storm Diamond Mines where Sputnik has shares”.
“It is apparent that the mining minister, in deciding to award the tender to Sputnik without the recommendation of the board, was influenced by personal interests.
“This apparent personal interests that have been exposed also corroborates the allegations of Mr Borotho that the minister actually approached him and attempted to influence the board to award the tender to Sputnik.
“This was unlawful because Lucapa had not submitted an expression of interest to acquire the shares. The minister, despite several objections and an on-going criminal investigation, and despite the matter being sub-judice decided to go ahead with the transfer of the shares to Lucapa.”
He says the investigating officers wrote a letter to Mr Thotanyana directing him to stop the tender process pending the finalisation of the criminal investigation.
“The minister refused to honour this directive. There is a civil case in court that challenges the legitimacy of the award of the tender to Lucapa, despite the pending litigation, the Minister has gone ahead to transfer the shares to Lucapa.”
Mr Moleleki further states that he had been alerted of a plot to divert M113 million from Lucapa to the minister’s control.
“It has been revealed by whistle-blowers that the minister intends and has obtained approval from cabinet to divert funds that will be paid by Lucapa into a private commercial account to be controlled by the minister and his ministry.
“The law is very clear that government funds shall be held in the consolidated account held at the Central Bank in order for the said funds to be allocated by Parliament to ministries. So in this case, the money is deliberately diverted from the public purse to be used without the authorisation of Parliament.”
Mr Moleleki calls for the instituting of criminal investigations against Mr Thotanyana “to their logical conclusion” adding that he was financially benefitting from the mining industry and “this is a clear conflict of interest”.