Why Sekhametsi Shareholders Are Fighting

(MENAFN- The Post) MASERU – A proposed M180 million investment in a shopping centre in Ha Foso could have hastened the fallout between Sekhametsi Investment Consortium's board and a group of shareholders.

Although the group of shareholders had other longstanding grievances, it is Sekhametsi's deal with Emmanuel A.M.E Church to build the centre that could have precipitated the board's abrupt removal at a heated meeting on June 1.

The proposed project dubbed the Khubetsoana Lifestyle Centre, is on land owned by the Emmanuel A.M.E Church in Ha Foso, just below the traffic centre.

The ousted board, led by Selikane Selikane, is challenging its removal in court. The case is likely to be heard tomorrow or early next week.

Selikane's board wants the court to declare the election unlawful and interdict the Thuso Green-led board from taking over.

Documents seen by thepost show that the board first revealed the proposal for Sekhametsi to invest in the shopping centre in 2023, a year after being elected.

The board supported the proposal but some shareholders were hostile.

In one meeting earlier this year, the shareholders openly opposed the investment and instructed the board to inform the Emmanuel A.M.E Church that Sekhametsi was pulling out of the deal.

Shareholders were infuriated when they discovered a letter indicating that the board had not communicated with the church as instructed.

The letter from Reverend T.M.H Kholoane, the pastor in charge, asked the Sekhametsi board to provide an update on the shopping centre project.

Reverend Kholoane first informed the board that the church's court case against someone who had encroached into the land, where the shopping centre is to be built, had been transferred to the land court and was“hopeful it would be heard and resolved speedily in order not to frustrate the project”.

He then said the church would appreciate an“update on the status of the project from SMIC as the single majority shareholder in the project and the guarantor of the loan financing component”.

The church, Reverend Kholoane said, wanted to know if the“project would be ready to proceed once the other impediments, such as the land dispute and VAT matter, have been resolved”.

Some shareholders read that letter to mean that the board had not informed the church of their decision to abandon the deal.

Dr Mphu Ramatlapeng, who is said to be leading some of the shareholders, wrote to the board after it said it was moving the Extraordinary General Meeting to June 1.

Dr Ramatlapeng first told Selikane that shareholders viewed his board's decision as a“veiled strategy to disenfranchise the shareholders of their rights to remove a board that has gone rogue” and is“engaged in errant behaviour with clear nefarious intent”.

She said the board was“buying time to continue to perpetuate its errant actions”.

Dr Ramatlapeng said the shareholders would not be surprised if this delay is meant for the board“to conclude the likes of the KLC project that we are not clear that there are personal interests to see that project over the line despite the wishes of the shareholders and in utter disregard of governance rules as well as the legal frameworks that pertain to large projects as contained in the Companies Act 2011 and its regulations of 2012”.

thepost understands that the Selikane board had started negotiating with a local bank to fund the project which some shareholders believe is not prudent and would eat into their potential dividends.

Dr Ramatlapeng said the shareholders were aware that the board's“so-called Procurement Committee” is giving certain companies“monopoly” to work on Sekhametsi Place.

She also alleges that Sekhametsi is buying material for those contracts and also paying them to redo their“shoddy works”.

Dr Ramatlapeng said the shareholders were aware of the“fractured nature of the board” and some members have called on the board to stop both the fights and“illegal acts planned”.

She says huge sitting allowances earned by the directors indicate that the board has been overly involved in the company's operations.

Other allegations are that the board has failed to hire a chief executive, been sloppy with governance and failed to draft critical policies.

Staff Reporter

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