Billy Ntaote

A whistleblower as well as employees of Lesotho’s biggest diamond mine — Letšeng Diamond Mine — have raised questions about the way in which a catering, housekeeping and laundry services contract on the mine was awarded.

While the losing bidder of this contract also lodged concerns, the mine’s owners have responded to questions about this contract through lawyers with a firm denial of any impropriety, a demand that MNN Centre for Investigative Journalism gave a written undertaking not to publish a story on this matter and a warning that the client reserves all rights, including seeking an interdict to stop publication.

The three-year catering contract in question was awarded to International Facilities Services Lesotho Pty Ltd (IFS Lesotho). It took over the catering services contract at Letšeng mine on 1 March this year replacing Tsebo Solutions Group Lesotho (Pty) Ltd. In 2018 Tsebo secured a three-year M150 million contract to supply these catering and cleaning services.

Tsebo’s contract officially ended in February 2022 but when the mine put the contract up for renewal it got complicated. A whistleblower raised questions about the mine’s contracts manager, Mphokoane Monkhi, being related to the owner of one of the companies bidding for the contract. The bidder in question was IFS Lesotho.

IFS Lesotho is owned by two shareholders. The first is the South African based International Facilities Services South Africa Pty Ltd which has a 49 percent stake. The remaining 51 percent is held by the Ramaili Group of Companies (Pty) Ltd. This group is owned by Molise Naphtali Ramaili and his spouse Mpoetsi Nora Malisemelo Ramaili to whom Monkhi is related. Ramaili and Monkhi are first cousins whose mothers are siblings.

While the Ramailis have strong ties to an opposition party in Lesotho, the Democratic Congress (DC), Molise Naphtali Ramaili is also the interim chief executive officer of the Lesotho National Development Corporation (LNDC). He was appointed to this position in 2021 when the DC leader Mathibeli Mokhothu was Deputy Prime Minister.

The Letšeng mine first opened the tender in June 2021. Eight months into the process, in March 2022, while the adjudication process was still under way, then spokesperson for the Socialist Revolutionaries political party, Thabo Shao, posted on his Facebook account about Monkhi and Ramaili being related. The post raised questions about Monkhi’s influence in the bidding process to favour the Ramailis.

Tsebo which had put a bid in to continue with the cleaning and catering contract, which it had been running since 2018, lodged a complaint about the conflict of interests and the way in which IFS was allowed to continue as a bidder. MNN has seen this letter which is addressed to the Minister of Natural Resources, Mohlomi Moleko and Gem Diamond CEO, Clifford Elphick who is also Chairman of the Letšeng board. The letter was received by Minister Moleko’s office on February 13, 2023.

In the letter Tsebo states how the company was alerted to a whistleblower’s social media post which appeared during the “adjudication process (in March 2022)”. Tsebo states that it had alerted relevant stakeholders (Letšeng and Gem Diamonds) about this post that can be summarized as; “IFS is going to be awarded the catering contract tender and Compliance Manager Mphokoane Monkhi is deployed to ensure that IFS is awarded the tender.” It goes on to set out how the post draws attention to Monkhi, to whom Tsebo’s onsite team reported to and who had detailed knowledge and oversight of the company costs and performance, was related to a shareholder in IFS Lesotho.

“This was obviously extremely concerning as Tsebo shared information on strategy, operations, and pricing freely with the Contract Managers as part of the normal course of managing the business with Letšeng and the partnering approach adopted with Letšeng.

“This created reasonable doubt as to the fairness of the process and suspicion of a probable conflict of interest that could have been detrimental to Letšeng’s reputation, and all other parties involved in the process”.

Following the whistleblower’s revelations and the investigation by Letšeng, the mine officially withdrew the controversial catering tender in June 2022 and the contracts manager, Monkhi left the company. As a result of the delay that all this caused, Tsebo’s contract, which was supposed to expire in February 2022, was extended twice: until August 2022 and later until 28 February 2023. The extension gave Letšeng time to re-advertise the tender which it did in August 2022 and, after a second tender process which has also raised some questions, IFS Lesotho secured the contract and started providing the catering services on the mine on 1 March 2023.

When MNN approached Tsebo’s director Hubbard Monaheng for comment about Tsebo’s letter of complaint about the tender process and about IFS Lesotho finally being awarded the bid, he denied knowledge of any irregularities in the tendering process. Sources inside Tsebo told MNN that Monaheng’s denial was, they believe, because of the company’s strict policy of not disclosing internal communication of clients to third parties.

Sources at the Letšeng Diamond Mine spoke to MNN about what kind of information the contracts manager would have access to. They asked not to be named for fear of reprisals but also confirmed that Monkhi would have received detailed reports on how Tsebo as the incumbent catering contractor was performing.

Monkhi’s access, MNN learned included “all information from the contractors”.

“On a monthly basis, there would be a monthly contract meeting where she would be in attendance with Contract Administrator, Supply Chain Manager, and other officials depending on type of contract. These monthly meetings are intended to assess performance of the contractors, in this case Tsebo.

“As contracts manager, she would be presented with information about rates of the contractor per plate per meal, salaries of employees, cleaning costs etc.

“She would also have access to how much the contractor is spending in sourcing good and services locally. Localisation is a critical mine strategy intended to ensure the mine sources services and goods from local producers or service providers and empowers them.

“In the tendering process, having knowledge of the rates a contractor charges including localisation component are important as they determine a winning proposal.

“Monthly spent money in Lesotho is important for contractors as it makes them achieve the localisation targets and goals of the mine.

“So, on a monthly basis the contractors report how much they spent in Lesotho sourcing commodities used at the mine,” MNN was told by a mine insider who refused to be named for fear of reprisals.

Tsebo’s letter to Minister Moleko and Elphick goes further and complains that Monkhi registered a company on 24 August 2021 (while the adjudication of the first tender was underway) with her other Ramaili relatives as reflected by the companies’ registry records.

Monkhi registered Selemeng (PTY) Ltd with Ramaili’s siblings Lisema Ramaili, Lisebo Ramaili and her sister Palesa Monkhi.

This company, according to the Tsebo letter, was closely aligned to the services required by the Letšeng tender under adjudication.

According to company registry records Monkhi ceased to be a shareholder of the company she registered with Ramaili relatives on 4 November 2022, a date that Tsebo’s letter points out is close to 1 November 2022. This is the date that IFS was supposed to take over some responsibilities at Letšeng in line with an exit management plan.

In its letter of objection Tsebo states that: “Even though the consultants and Letšeng indicated in the meeting of 7 April 2022 (that was held as a direct request of Tsebo) that the contract manager had nothing to do with the adjudication process, the coincidence is hard to ignore.”

When the whistleblower posted concerns about the contract manager and her relationship to the Ramaili family, Letšeng Diamond Mine did investigate. This led to the tender process being stopped and Monkhi leaving the company.

Sources in the mine described to MNN how Monkhi and some of her colleagues, were subjected to an inquiry. Sources claim that this inquiry involved lie-detector tests. Monkhi resigned and others, according to sources close to the process, were demoted.

Monkhi refused to answer questions posed to her by MNN but admitted that she left Letšeng out of anger.

When MNN asked for comment, Royal Haskoning DHV’s Head of People, Culture and Communications Pat van Wyk, confirmed that the company was involvement in the first tendering process. Royal Haskoning DHV is a consultancy company that was contracted to help Letšeng adjudicate the tender process.

Van Wyk also said that due to confidentiality within “our contract, we cannot comment on who we worked with from the Letšeng team, nor can we comment on internal human resources processes undertaken by Letšeng with regards to their staff”.

But Royal Haskoning DHV stressed that the tendering “process was run fairly, transparently, and independently”.

When MNN sent questions (January 2023) about this tender process to Letšeng’s board chairperson Clifford Elphick (also CEO of Gem Diamonds which owns the Letšeng mine) said: “Gem Diamonds Limited does not comment on the internal processes concerning the award of contracts by its subsidiary companies – in this case Letšeng Diamonds (Pty) Limited. However, any allegations of irregular conduct are taken very seriously and are fully and carefully investigated”.

Gem Diamonds has a 70% share in Letšeng Diamond Mine and the remaining 30% is owned by the Lesotho Government.

The Gem Diamonds’ code of ethics, which Letšeng is also bound by, reads: “We are committed to afford service providers with an equal and fair opportunity to compete for our business on the grounds of capability, competitive pricing, quality, service, and ethical behaviour. Business will be conducted in accordance with transparent sourcing policies and ethical procurement practices.”

Molise Ramaili (LNDC interim chief executive officer) through WhatsApp responded to questions sent by MNN saying: “Please proceed with the story as per your investigations’ sir. This is all not true but I know it doesn’t matter to you so please proceed to the best of your ability. Thank you”.

Ramaili further added that: “Change is never an easy process and those that unfortunately lose feed wrong information to the media and use such an important platform to try and tarnish people’s reputations!!

“It’s sad to see the media being used to bring destruction in our country instead of fostering positive change that can bring development and change the lives of our people.

“I pray that you one day wake up to see the power that you have as young person to change our country, and not to be misused by people with ill intentions and who are so corrupt and focus on sticking to contracts as it they are the only ones who deserve to get contracts in our country”.

While MNN cannot confirm the final IFS Lesotho contract price and whether it was in line with the Letšeng’s austerity measures, MNN included questions about the IFS Lesotho bid price as well as other allegations to Letšeng in February 2023. The catering contract was one aspect of the Letšeng operations hit by its ongoing austerity measures, that include the labour optimization transition intervention (LOTI) that has resulted in restructuring and employees being offered lower salaries to save costs and avoid retrenchment. MNN got no response from the mine, but it did get a letter from a legal firm in South Africa, Weber Wentzel, which is acting on behalf of the mine. The letter from Weber Wentzel is written by a partner in the firm, Peter Grealy. It states that the mine was not given enough time to respond to all the allegations and warns against publishing anything about the “Offensive Allegations” that were put to the mine about the tender process.

“…we have been instructed to deny any allegation of impropriety or unlawful conduct on the part of our clients which you impute to them…”, states the letter.

Grealy’s letter demanded that this journalist and MNN “provide a written undertaking not to publish an article that includes the “Offending Allegations”. The letter also threatened to approach the High Court of Lesotho to “interdict the publication of the article, and to seek a costs order against you [this Journalist and MNN]”.

Grealy also stated that: “With regard to the contract price being inflated to facilitate bribery, our clients deny and reject same. Additionally, we are instructed that IFS’s quoted price was competitive and within the range of prices quoted by other preferred bidders”.

One or two tender processes?

In his letter to MNN Grealy states that, despite concerns raised about the Letšeng contracts manager, she resigned before the tender process began.

Grealy’s letter states: “The erstwhile Contracts Manager had no oversight over the tendering process or its requirements; the Contracts Manager had resigned before the tender process commenced; and the Contracts Manager never had access to the tender documents submitted in the tendering process.”

This does not recognise that there was a first tender process that opened in June 2021. This tender was, as MNN can show, withdrawn a year later in June 2022 following revelations by the whistleblower. The tender was then re-opened in August 2022.

The letter from Weber Wentzel’s Grealy goes on to say that Royal Haskoning DHV was appointed on or about 14 September 2022 to adjudicate the process and that the company “conducted a fair, transparent and public tendering process and presented its preferred bidders to the Board of Letšeng for approval on or about 28 October 2022”.

While the lawyer’s letter states that the Royal Haskoning DHV, an independent expert tender consultant, was appointed on or about 14 September 2022 and submitted its preferred bidders to the Letšeng board on or about October 2022, Royal Haskoning DHV’s Van Wyk confirmed that they were involved before this in the first tender process for this contract and said: “The team working on this assignment from Royal Haskoning DHV was not changed”.

Tsebo’s letter of complaint to Letšeng about the tender process refers to two tender processes. Tsebo director, Monaheng’s responses to MNN confirm the same.

“There was an initial re-tender in 2021 as part of their [Letšeng] normal business processes, which was subsequently withdrawn. Letšeng issued another tender in September 2022 which we were unsuccessful in our bid to retain the business,” said Monaheng.

MNN has seen a letter from Letšeng head of operations withdrawing the tender in June 2022. “We thank you for the tender submitted by your company for the Catering, Housekeeping and Laundry Services at the Letšeng Dimond Mine (Enquiry no. H-21-OSA-01).

“Due to reasons associated with the responses provided by the parties shortlisted for the tender as well as other non-disclosed reasons, Letšeng Diamonds Mine hereby exercises its right to withdraw the abovementioned tender in accordance with the specifications given in the Tender Documents,” reads the letter. It also states that Letšeng is “not obligated to provide reasons for the withdrawal and will not entertain requests for same”.

In its letter Tsebo states that, in the first tendering process — before Letšeng withdrew the tender —both IFS and Tsebo were requested to sign affidavits that “appeared to have been meant to protect the consultants and Letšeng from any potential lawsuits from tenderers and strangely the tenderers were required to affirm that the tender process was fair and transparent”. Tsebo said it could not and did not affirm the fairness and transparency of the tender.

Questions over second tender process

 There are two unanswered questions about the second tender process that have been raised by sources at Letšeng as well as Tsebo. The first question is why IFS Lesotho were not precluded from the second tender process following complaints that one of its’s shareholders was related to the mine contract manager. The second question is why the advert inviting bids for the second tender process (reference is H-22-OSA-01) did not involve a virtual meeting and site visits for bidders as was the case in the first tendering process. Tsebo’s confidential document objecting to the way the tender was conducted states that a virtual meeting for interested bidders was held during the first tender process on 6 July 2021. The compulsory site visit for bidders was held on 6 August 2021. When the tender process was withdrawn and then re-advertised in 2022, there were no new meetings or site visits scheduled for the second tender process, according to Tsebo’s letter of complaint.

In his letter to MNN, Weber Wentzel’s Grealy’s states that: “The Board of Letšeng is composed of 10 members. Three of these members are appointed by the Government of the Kingdom of Lesotho. This Board unanimously accepted the recommendation to award the tender to IFS as did the Shareholders.

“On or about 24 February 2023, the CEO of Tsebo Solutions Group (Pty) Ltd, the holding company of Tsebo, indicated its acceptance of the outcome of the tender and the award. Indeed, the handover process has been effected by Tsebo to IFS and on 1 March 2023 IFS was installed as the service provider for the Catering & Housekeeping contract”.

While Tsebo’s director is also on record as having no objection to the tender process, Tsebo’s letter to Moleko and Elphick, which was sent before the final tender decision was made, is called  “Concerns regarding above tender processes.” The letter sets out detailed concerns about the tender process and calls for an intervention from Letšeng shareholders.

The letter states that, post cancellation of the tender in June 2022, a follow-up tender (H-22-OSA-01) was flighted following an Expression of Interest process. In the follow up tender, the company states, there was no site visit and the tenderer’ identity was deliberately withheld, “which differed from the approach taken in the first tender”. The letter goes onto say that Tsebo inquired about why there was not another site visit, and they were told that “there was no material changed from previous tender”. This, according to the Tsebo letter, implies that the first tender and follow up tender are the same and that tenderers were going to rely on and use information gathered from the previous tender site visit.

“It is then reasonable to make an assertion that the follow up tender was a continuation of the previous tender and IFS continued to derive the benefits of family relationship…”, states Tsebo’s letter.

It also states that: “Tsebo remains deeply concerned that a compromised bidder, with a self-confirmed conflict of interest was allowed to participate in the follow-up tender process.”

It also cites Gem diamonds code of ethics and argues that “the actions of IFS and the decision of consultants clearly breach, or are reasonably seen to breach all these principles”.

Tsebo further told Moleko and Elphick that “we would hereby like to request the intervention of the shareholders of Letšeng Diamond (Pty) Ltd in this urgent matter as the events of the first tender and the follow-up tender seem to continue on the same trajectory which grossly undermines the code of ethics of Letšeng shareholders and Letšeng as a company”.