A highly controversial contract between Liqhobong Mine Development Company and Basil Read Lesotho (BLR) continues to exist despite fraud charges levelled against the latter last month.
Lesotho’s corruption watchdog, Directorate on Corruption and Economic Offences (DCEO), has dragged to the Maseru Magistrates Court South Africa-based Basil Read Mining (Proprietary) Limited, which wholly owns BLR, on two counts of fraud in September.
At issue is a questionable contract the Liqhobong mine signed with BLR in November last year.
Evidence led in court shows that in October 2015, the mine published a notice inviting expressions of interest to tender for a contract to carry out open pit mining operations in Lesotho.
On March 3, 2017, Basil Read Mining, purporting to be B&E (Pty) Ltd – a company which had been deregistered from the Lesotho’s companies register in December 2014 and no longer legally in existence – submitted in writing its expression of interest in response to the aforesaid notice and did so in the knowledge that B&E no longer existed, the court has heard.
Along with the then Liqhobong mine Chief Executive Officer Stuart Brown, the evidence reveals Basil Read Mining lobbied the mine’s board of directors, on June 28 last year, to award the contract to B&E.
This means, according to the charge sheet that Basil Read Mining and Brown presented to the board that B&E was an existing and locally registered company in Lesotho and its application to tender was in order.
Based on this misrepresentation, the board awarded the contract to B&E.
On October 12, 2017 – almost four months after the Liqhobong mine awarded contract to B&E – BRL was registered in Lesotho.
On November 1, Brown signed a contract with Basil Read Lesotho on behalf of LMDC, “thereby holding out to LMDC (Liqhobong) and the minister (mines) that this was the contract which had been awarded on June 28”, whereas Brown and BRL “well knew that the contract had been awarded to a non-existing entity (B&E), and that BRL only came into existence on October 12, which was after the award of the contract” by the board in June.
But despite this evidence, the Liqhobong mine General Manager Gert Buitendach told the MNN Centre for Investigative Journalism last Friday that: “We confirm that LMDC entered into a mining services agreement with Basil Read Lesotho (Pty) Ltd (BRL) in 2017, a wholly owned subsidiary of Basil Read Mining (Pty) Ltd, and that this company is currently performing mining services at Liqhobong Mine.”
This was a few days after Basil Read Mining was charged on two counts of fraud.
This week again, the Centre contacted the Basil Read Mining’s senior contracts manager Frikkie Van Niekerk via email and he responded: “Please note that we will do a press release in due time. As for now I am not willing to comment on any of these allegations.”
Basil Read Mining was charged on September 25 and Van Niekerk was released on M50 000 bail. He will appear in court again on October 26.
In May this year, a local newspaper Public Eye, reported that in 2017, a joint venture of BRL and a local company linked to the former Commissioner of Mines Tšeliso Ntabe – Makamics Pty (Ltd) – was controversially awarded a tender by the Liqhobong mine.
Mining Minister Keketso Sello told Public Eye then that he had always suspected that the tender was awarded fraudulently.
Sello said: “I queried the awarding of this tender to Basil Read Lesotho and Makamics even though I was not aware at that time that even the then commissioner of mines (Ntabe) was involved in the deal.”
He added: “I requested to be furnished with all documents showing how the companies were evaluated. I was not happy with the whole tender process.”
Sello also revealed that “even though Basil Read is registered in Lesotho, it was only registered after the contract had been awarded”, and members of the board “were made to sign for this deal yet they did not know or understand much about it”.
He said when he “queried these things”, some people went to Prime Minister Thomas Thabane “to say I had received bribes” from one of the bidding companies.
“They told Prime Minister that I wanted to influence the tendering process to favour the company that had allegedly bribed me. These were lies but they did not frustrate my efforts to find out how the contract was awarded”.
The minister also disclosed that he had roped in the corruption watchdog DCEO to investigate the matter.
“I always believed the tender was awarded fraudulently, it was suspicious,” he said.
When confronted with the information in May this year, Ntabe denied any wrong doing on his part.
Liqhobong mine is partly owned by the United Kingdom-based Firestone Diamonds through a 75 percent shareholding. The Lesotho government owns the residual shares.
The mining lease that Firestone Diamonds holds is reportedly valid until June 2021, with options to renew it by two additional periods of 10 years.
The project primarily involves the development of an open-pit mine to a depth of 393m and construction of a main treatment plant.
The mine is considered to be the world’s third biggest underdeveloped kimberlite resource, based on the contained carats.
As of September 2015, it was estimated to contain probable reserves of 36.04 million tonnes of ore.