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Co-op Lesotho revival long overdue

…smacks of corruption threaten total shutdown

BILLY NTAOTE and MPHO THAA THAA

A drive for the renaissance of Cooperatives in Lesotho is under threat as one erstwhile success story Cooperative battles to shake-off its dark past riddled with mismanaged funds and corruption that drove it into near collapse.

Co-op Lesotho, known to have been the mother-body to various start-up Cooperatives in the country has moved from a bungled liquidation process early 2000 to joining the rebirth of Cooperatives in 2006, but a renaissance process that has dragged for more than a decade but continues to be marred by the Cooperative’s past misfortunes.

Cooperatives have a long history in countries in Africa, including Lesotho and have experienced periods of decline and success and in many countries, Cooperatives were abandoned by the state during structural adjustment, and many disintegrated, however, Cooperatives are now experiencing a renaissance.

And several studies indicate that, through Cooperatives, people can address multiple aspects of poverty, job creation, access to education, links to networks and participation in the community.

Key challenges that dogged the Co-op Lesotho started with a rebirth process that the MNN Centre for Investigative Journalism has established was led by the Ministry of Trade, Industry, Cooperatives and Marketing officials seconded to the Cooperative in 2006.

Now, the Cooperative under a new Chief Executive Officer Neo Theoha continues to struggle to find its footing as new initiatives are under threat due to suspicions of corruption and maladministration.

The Centre in an interview with the Commissioner of Cooperatives ‘Maphamoli Lekoetje, responsible for the regulation of Cooperatives, said she has learned that under Theoha’s leadership, Co-op Lesotho has illegally disposed of about seven of its sites.

“I received inside information from some Co-op Lesotho employees who went to my house to update me with documents that about seven sites have been illegally sold.

“When I learned that Co-op Lesotho was being renovated, I inquired if there was any agreement with the board regarding developments being made on the buildings and I was told everything was in order,” said Lekoetje.

But Lekotje suspects Theoha since his appointment, he has been misappropriating the Cooperative’s resources.

She said this, prompted her to request that she be showed minutes of the board agreeing to the disposal and developments being made on the sites of the Cooperative by a private developer.

She said she also requested to be given a copy of the actual contract between the developers and the Cooperative but she argues her request has not been replied to since October 2017 when the developments commenced.

Lekoetje said following the discovery of suspected abuse of resources by Theoha, an Interim Committee appointed by the Cooperative’s membership to investigate and advise the cooperative on development of its sites and properties, a report was released in July 2018.

This interim committee made a damning report against Theoha’s conduct.

It details how Theoha with the help of Harley and Morris, the trustee of the estate of the Old Lesotho Bank, secured a property developer named Best Deal Investments (PTY) Ltd to develop prime land belonging to the Cooperative and also repay a debt close to M4 million with the Lesotho Bank.

Theoha, in the report is accused of having flouted laws governing the Cooperative and also having made hidden agreements to settle the debt, which the report argues should be far less than M4 million claimed.

Furthermore, the report also reveals that since his appointment Theoha has also sold a piece of land located near Liqhobong mine to the mine for M250, 000.00 in stark violation of the Cooperative’s rules and best interests as the price was put without engagement of a professional valuer.

The report shows that the Interim Committee discovered a signed agreement between Co-op Lesotho and developer named Best Deal Investments (PTY) Ltd.

The agreement between Best Deal Investments and the Cooperative provides that the Cooperative’s site located along the Cathedral Area in Maseru will be developed and be placed under management of Best Deal Investments for 51 years with a chance for further 10 years increase to the sub-lease agreement.

The report indicates that in July 2017 an agreement was reached in connection with a 394 Square meters site and later amended to be 1225 square meters.

Also the report further indicates the Interim committee was not granted access to other sub-lease agreements but were only verbally told that a site located along the Sir Seretse Khama road in Maputsoe is also allocated to Best Deal Investments for development together with another site.

But, the interim committee while making its inquiry, reports that it was only given access to a letter from Harley and Morris dated August 2017 indicating that a debt of the Cooperative with Old Lesotho Bank had been settled in full by Best Deal Investments.

Above settling the debt in full, Best Deal Investments also gave the Cooperative M1.8 million for sublease of 51 years.

However the Interim Committee argues that it is not clear how much was paid to settle the Lesotho Bank debt in full.

To its surprise, the Interim Committee reports of its discovery that Harley and Morris being the trustee of the Old Lesotho Bank were engaged by the Cooperative’s Theoha to solicit a developer for its properties in order for the old Lesotho bank debt to be settled by the Cooperative.

But, the debt, settled as it was, the interim committee argues in the report that it discovered there were no clear reasons why the Best Deal Investments was selected as the best developer of the Cooperative’s properties as it had an offer similar to two other property developers.

The interim committee further said in the report there is a need for an investigation by the Directorate on Corruption and Economic Offences into how the developer was chosen as Theoha allegedly desecrated laws and procedures governing Cooperatives.

On the site located in Liqhobong,in the Botha-Bothe, the interim committee’s reports it was also sold in June 2017.

The interim committee argues the sale happened without minutes of a meeting of the Cooperative members meeting or that of the board of the Cooperative that authorised the sale of the site.

This, the interim committee’s report, points that the site was sold illegally taking the seriousness of the decision to dispose of such a site without the authorisation of the members or of the board.

The interim committee said the Cooperative should order Theoha to have all its sites either returned and or offers made for their sale being renegotiated in favour of the Cooperative.

But, Theoha in an interview with the Centre, said when he was hired as Co-op Lesotho’s Chief Executive Officer, the cooperative had undergone so much troubles that its board told him there were no funds to pay him but he should turn around its fortunes and promised to be well rewarded.

“Upon negotiation of my salary, I was told that the Co-op Lesotho does not have funds to pay me. But then, the Board said through its assets, Co-op Lesotho has a lot of potential for growth.

Co-op Lesotho site under construction and Bonhomie House building

“I was told to look at the bigger picture and I’d get rewards later if I turned around the Cooperative’s fortunes,” Theoha told the Centre.

Theoha said Harley and Morris contacted him demanding that the debts with Lesotho Bank must be paid by the Cooperative.

“They said their clients are demanding that properties belonging to the Cooperative must be sold to repay the debt.

“We were then advised, by Harley and Morris, that we could seek a property developer who would pay the debts of Co-op Lesotho and also develop our sites and properties to have better income,” Theoha said.

Theoha said since taking over office he brought in new ways of courting property developers using many properties of the Cooperative “and that benefitted the Cooperative”.

“All our sublease agreements now allow us to share rentals with developers.

“The developers take 75 percent while we will get 25 percent from proceeds accruing from the developments made by the developer. They also pay off all our debts as agreed and give our office some funds per agreement.

“A sublease normally takes 25-35 years. But now that we want developers to share rentals with us and to also pay our debts the sublease has to be for a longer period,” said Theoha.

Quizzed about the Best Deal Investments, Theoha said the company was found to be the best candidate as it agreed to pay off the debt of the Cooperative with the Lesotho Bank as demanded by Harley and Morris while also sharing profits at 75 percent to 25 percent with the Cooperative.

Co-op Lesotho CEO Neo Theoha under site under development by Best Deal Investments

“The land, it should be clear still belongs to the Co-op Lesotho, we’ve only sub-leased it. The subleased sites are in Maseru and in Maputsoe. And the length of sublease is 51 years and they have already paid to us M3.5 million for out debts. This Money did not come to us but settled all our debts as Co-op Lesotho. The Maseru site costs M1.8 million and the Maputsoe site near St Luke Primary,” said Theoha.

While negotiating, Theoha said the developers were demanding to develop the 13 sites of the Cooperative, but he disagreed and managed to convince them to only take the Maputsoe and Maseru sites.

On the findings of the interim committee, Theoha dismissed the report as a distortion of facts by a group of disgruntled members of the Cooperative who wanted him to fail his mandate.

He said when the report by the interim committee was submitted to a Special Meeting and a resolution was made that ratified his decisions to put on sublease and find a developer for the assets of the Cooperative.

He also said the special meeting made a resolution that said the interim committee went astray and beyond its mandate and that there is no need for him (Theoha) to be investigated for alleged corruption.

“Voting took place. And 14 members were for Interim committee’s report while 34 members were against the report and stood by the developments made.

“That’s why the developments are ongoing on the two sites that have been sub leased to the developers,” said Theoha.

He further said the sentiments shared by the Commissioner of Cooperatives are due to the fact that she does not wish the Cooperative to be stable.

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