NEW BOARD TO DECIDE MOPADO PROBE – MINISTER

MBABANE – The investments that were entered into by the outgoing Members of Parliament and Designated Officers (MOPADO) Pension Fund’s board of trustees may still be subjected to an investigation.

But this will all be dependent on whether the new board that is yet to be appointed feels the need for such an investigation.
This is the view of Minister of Finance Neal Rijkenberg following recent reports by the Times SUNDAY that the outgoing board invested E50 million with Eswatini Mobile despite being advised that the investment was risky.

MOPADO’s investment managers, Imbewu YeSive Investment PTY LTD, warned that investing this amount of money could result in a ‘significant loss’.
This was a major difference from an amount of E10 million-worth of shareholding that Eswatini Mobile had offered to the Fund.  
Instead, Imbewu recommended that at least E15 million should be invested in Eswatini Mobile.

Members of the outgoing board were Lobamba Lomdzala MP Marwick Khumalo (chairman), former Senator David Dlamini, former Mkhiweni MP Rodgers Mamba, former MP Thulani Masuku, former Gege MP Mbongiseni Malinga, former Senator Thandi Shongwe, former Ludzidzini Council member Absalom Muntu Dlamini, former Chief Executive Officer in the King’s Office Bheki Dlamini and Ministry of Finance representative Mxolisi Fakudze.

E12m land purchase not going down well
Besides the Eswatini Mobile investment, another issue that has not sat well with members of the Fund is the decision by the outgoing board to purchase land at Ezulwini for an amount of E12 million.
The land was bought from Princess Lungile, the wife of deceased Eswatini Mobile co-founder Victor Gamedze.
With the MP Khumalo-led board’s term of office having lapsed at the end of April, 2019, Minister Rijkenberg yesterday told this publication that a new team will soon take over.
“We are in the process of putting the new board in place,” he said.
Asked if there was any action or recourse that his office may consider to ensure that the MOPADO investments were above board, the minister said these decisions were made before his term of office “and they were made following due process”.
The minister further stated: “We will follow the law so it will be up to the politicians and emabandla who they elect onto MOPADO board, it would be wrong for me to interfere in the process. I will work with the new board to decide whether they would like to do any investigations or not.”
Former Cabinet minister Mfomfo Nkambule implored the minister and the Fund’s members to ensure that all the outgoing board members are not re-elected.
He said upon assuming office, the new board would need to call their predecessors to appear before them and explain how the investments were carried out.
He said Minister Rijkenberg, as a beneficiary of the Fund and a representative of government as the guarantor, should ensure that the MP Khumalo-led board is held to account.
“The minister and his principal secretary should not be seen as complicit to the suspected wrongs that the Fund’s board did while in office,” Nkambule said.
He said the decisions of the Khumalo-led Board showed that they did not have the nation and the Fund’s members’ best interests at heart.
The ex-minister said when people are given a job they have to do it to the best of their abilities, knowing that whatever should go wrong would be blamed on them.
“To a certain extent, these investments appear to leave a lot to be desired. The outgoing board members need to come forward to the new board and explain what was happening,” Nkambule said.
He wondered why the investment advisors, who are supposed to be experts and experienced people on investments, were engaged in the first place if their advice is then disregarded.
“It means hiring these people was a waste of money if their expertise is ignored. It’s clear that the interests of the people were not considered here,” he added.

‘no investments done
without proper advice’
Following last week’s article on the Eswatini Mobile investment, MP Khumalo, who had refused to comment when this reporter approached him, issued a statement saying no investments were done without sound professional advice.
“Like in every professional board, sub-committees existed precisely to process all matters, according to their portfolios,” he said.
He said the advice which the article was based on did not reach his board.

Imbewu’s advice
According to the advice, which is dated February 28, 2018, Imbewu Investments PTY LTD raised a few pertinent issues that it said needed to be discussed, debated and agreed when considering the Eswatini Mobile investment
The first issue raised by the investment managers was that MOPADO’s investment policy statement required any investment into private equity should be done with full trustee approval, “especially since the trustees were aware of only E10 million being invested into this project”.
The second issue was that “from an equity perspective, the concentration risk of allocating in excess of 15 per cent of the Fund’s assets in a single entity is extreme, and there is no underlying security”.
Thirdly, the investment managers said “from a debt perspective, the concentration risk of allocating in excess of 15 per cent of the Fund’s assets in a single entity is extreme, therefore a thorough analysis of the Swazi Mobile balance sheet is required and the requisite security needs to be pledged by them”.
Imbewu then raised a fourth concern, which was that the term of office of the then parliament was coming to an end and the distribution of assets after the dissolution of parliament could manifest in one of two possible scenarios.
The first scenario was a massive disproportionate holding in Eswatini Mobile shares, where the remaining and new members (politicians) would ‘take on this risk’.
The second scenario was “the forced sale of Eswatini Mobile shares into a possibly illiquid market”, which the investment managers said ‘could be at a significant loss’.
Having outlined these issues, Imbewu then wrote: “The initial Swazi Mobile proposal was based on having strategic investors from within Swaziland (now Eswatini) as the key stakeholders. MOPADO had been approached by Swazi Mobile with an offer to take up E10 million shareholding that was available.
“This level was within the five per cent allocation that was envisaged per deal. Considering therefore, the increased value of MOPADO, this could be increased to E15 million.”
The investment further advised: “Imbewu would therefore recommend that given the negotiated share price of E10 per share, the Fund invest E15 million and acquire the corresponding number of Swazi Mobile shares. We look forward to your further consideration in this regard. We welcome any alternative suggestion though and are available to assess the impact.”

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