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Old debts bog down Co-op Lesotho

BILLY NTAOTE and MPHO THAA THAA

With a history of a bungled liquidation process halted after audit established the Cooperative Lesotho is not insolvent, new Chief Executive Neo Theoha says the fortunes of the Cooperative continue to be stalked by a prolonged rebirth process.

“An audit revealed that the cooperative was not insolvent and in fact its assets far outmatched its debts. It was found that it assets were worth more than M17 million while the debts then were worth about M9 million,” Theoha said.

He said as a result the liquidation process was quashed.

However Theoha told the MNN Centre for Investigative Journalism that the revival campaign started in 2006 and has since been a rocky one.

He said the Commissioner granted permission to revive Coop Lesotho within 2 years, starting from 2007 and ending in 2008.

But, the two year resurrection ended being extended and only ending in 2014, Theoha said he discovered when going through the records of the Cooperative upon his appointment.

He said surprisingly employees of the ministry of Trade, Industry, Cooperatives and Marketing believed to have technical expertise were assigned to revive Coop Lesotho were granted honorariums for working on the revival of the Cooperative and earned themselves an extra income of about M2, 500.00.

A development, Theoha described to have been a motivating factor for the ministry’s employees to take many years to revive the cooperative.

Contacted for comment one of the technical experts assigned to revive the cooperative, Mamonokoana Marai said they were assigned by current cooperatives commissioner Lekoetje to oversee the cooperative’s rebirth.

She said: “I was seconded to the Co-op Lesotho from October 2006 to July 2010”.

But Marai argues that when she got to the Cooperative, the liquidator, Letlama Talejane had made all arrangements and received funds on behalf of the Cooperative while he was the liquidator.

She said following their arrival, they were approached by a man from Boliba Savings and Credit who said he had come to the offices to settle the purchase of a site located along the Main South 1 road opposite Mabathoana High School affectionately known as Koporasi.

Marai said to her surprise there were no files indicating the agreements.

“It’s not clear to me, in fact I can’t recall how they were to pay for the land. But I think it was M900,000.00. But, then Co-op Lesotho had problems and Boliba was bringing in much needed funds amid lack of clear records of what they actually owed to the Cooperative.

“The Cooperative’s building known as Bonhomme House had its roof leaking heavily when it rained then. So we contracted a contractor to help stop the leakages. It cost us more than M80,000.00.

“Also the money we received was used to pay workers owed by Coop Lesotho, who had been retrenched with the remainder of the money. But we never sold any of the Properties of the Cooperative,” said Marai when quizzed about her work during the revival of the cooperative.

With a history of an old debt dating as far back as 1980s with the Lesotho Bank (under liquidation), the Centre has learned that the Cooperative members have vicious circle conflicts over its assets, mostly with anyone trying new if not innovative ways to revamp the Co-op Lesotho to erstwhile glory.

Early 1980s, the Centre learned that the Lesotho Bank had loaned the Cooperative M4 million and put as collateral or bonded were 13 sites belonging to the Coop Lesotho.

According to Letlama Talejana, a man who was appointed to liquidate Co-op Lesotho in 2000 and later told to halt the process and make way for a revival process after a forensic audit revealed the Cooperative was not insolvent as earlier thought, told the Centre when he began liquidation processes there was no indication that there is a collateral with the Lesotho Bank in the records hence decision to sell various pieces of land belonging to the Cooperative.

“But in the middle of the process of the sale, it was discovered that these site are part of a collateral with the Lesotho bank.

“Then we found out that government had given Co-op Lesotho a task to distribute Maize donations across the country and due to lack of funds, Co-op Lesotho was told to seek a loan with Lesotho Bank to finance the distribution of the Maize to the destitute multitudes of Basotho across the country.

“And the funds were sourced from Lesotho Bank to the tune of M4 million. The funds were for the distribution and construction of Storage facilities for the Maize donation from China that were supposed to be distributed to various beneficiaries,” Talejane said.

Talejane said the only surprising thing was that the loan, amid being guaranteed by the government of Lesotho as the debt was incurred to distribute maize to Basotho on its behalf there were sites bonded to the debt.

“We had the Guarantee Certificate by Government for the M4 million. And when the liquidation process was ongoing we approached Harley and Morris, the firm appointed as trustees of the estate of the Old Lesotho Bank, showed them the guarantee certificate and asked them to release the leases to the three sites we wanted to sell to TRC, Dr Kareen and Boliba Savings and Credit.

“Unfortunately, Harley and Morris was uncooperative and refused the guarantee certificate from government and further claimed the leases to the three sites could be found in the bulk of the defunct Agriculture Bank property which was also collapsing then,” said Talejane.

Talejane said while doing the run-arounds trying to untie the 13 sites from the M4 million debt, Harley and Morris later said another audit firm could be the one which has the leases in question.

Talejane said the plan was to dispose of the residential sites which did not carry much value to finance the liquidation Account for the running of the liquidation process as the Cooperative was living hand to mouth.

He argues that amid the unfortunate turn of events that saw the Cooperative collapsing, much of the blame must be put to government of Lesotho for failure to pay for services rendered to its ministries and departments by the Cooperative.

“We discovered during the liquidation process that Co-op Lesotho was owed by many government Ministries and departments for services it had provided.

“Huge debts either for the provision of seeds, fertilisers and or even for food stuffs that were sold to various government ministries and departments by Co-op Lesotho were outstanding and have never been paid to the Cooperative,” he said.

Talejane said the debts could amount to M4, 900,000.00 and when adding the M4 million for the guarantee to the Lesotho bank Loan, it meant that Co-op Lesotho had about M9 million that it could have sourced from government to meet its own obligations and not be in the problems it continues grapples with.

But, Talejane said the Harley and Morris continued to demand that Co-op Lesotho must pay back its debt.

But, even though, a private developer for various sites of the Cooperative engaged recently by Theoha has paid off the debt said to have been dragging for years with the Lesotho Bank, a former employee engaged in the rebirth process of the Co-op Lesotho argues the debt seems to have been blown out of proportion.

This is according to former senior cooperatives officer Malineo Mosoeunyane who argues that Theoha must be distorting reports of the Cooperative.

She claims that a report by Theoha dated November 23 2017is fraught with irregularities as she “discovered that is report the current CEO told the Co-op Lesotho board that the Cooperative was still indebted to Lesotho Bank Limited an amount more than M3. 5million. an amount that I know was partly settled when I left Co-op Lesotho”.

“Moreover, the amount M147 000 owed to Lesotho Land and Property had been settled in full contrary to what his report demonstrations to the board”.

But, Theoha has dismissed any suspicions that suggest he may be playing underhand tricks with the cooperative’s board and argues changes he has own personal businesses that make him money.

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