…blames power failures, overbilling and faulty electrical approval for collapse of investment
Moorosi Tsiane
THE now-defunct medical cannabis company, Leavea (Pty) Ltd, has revived its bid to force the Lesotho Electricity Company (LEC) to pay it about M6 billion in damages, alleging the utility’s negligence destroyed its multi-million maloti investment at Thaba-Bosiu.
Leavea has filed a fresh application in the Commercial Court after an earlier bid lodged in the High Court in September last year failed to progress.
In court papers filed last week, Leavea director, Craven Anwar, alleges that LEC’s failure to properly inspect, approve and regulate the electrical installation at the company’s cannabis cultivation facility resulted in years of power outages, overbilling, equipment damage, crop losses and ultimately the collapse of the business.
Mr Anwar said Leavea was established by foreign investors seeking opportunities in Lesotho’s medical cannabis sector.
According to court papers, the company developed a 2,000-square-metre indoor cultivation facility at Thaba-Bosiu under a foreign-funded investment project valued at M79.7 million.
“The monies injected as investment for the construction and operations of the 2,000 sqm medical facility in Thaba-Bosiu were initially disbursed in July 2021,” Mr Anwar states in his affidavit.
He added that profits were intended to support community projects and facilitate a future stock exchange listing through a United States public company.
Construction was completed in July 2022 and the facility’s electrical installation was subsequently approved by LEC after work carried out by an independently licensed contractor.
However, Leavea alleges the approval was granted negligently.
“The sign off by the respondents (LEC) was done negligently or alternatively, in breach of statutory duty or constituted a non-performance of duty.”
According to the application, problems emerged soon after operations began.
Leavea claims the electricity supply repeatedly tripped whenever more than two of the six cultivation rooms were in operation, causing blackouts throughout the facility.
“The power outage had thus prevented the facility from operating at optimum full capacity starting from August 2022 to the next fifteen months.”
The company says it was forced to operate only one grow room under unstable electricity conditions while experiencing unusually high electricity bills.
Court papers indicate electricity consumption fluctuated sharply, with meter readings reportedly falling from 37,333.75 kilowatts in September 2022 to 22,377.25 in October before increasing to 33,358.35 in November.
Mr Anwar claims the situation worsened after LEC reset the meter.
“The applicant was shocked to learn through its officers that after the meter reset, the increase in consumption rose to 141.30 percent.”
Leavea says it was billed for 80,493.37 kilowatts in December despite operating only a single cultivation room.
Mr Anwar claims repeated complaints to LEC produced little assistance.
“The agent and officer of the applicant lodged multiple complaints to the LEC to attend to the matter urgently but it took months until the first respondent came and was able to reset the electricity meter.”
The company argues reliable electricity was critical to cannabis cultivation and alleges LEC knew this.
It further claims outages damaged equipment and destroyed crops while disputes over billing, outages and unstable supply were escalated to senior LEC officials and even the then Minister of Energy without resolution.
“The complaints fell on deaf ears, yielding no reactive attempt to resolve the dispute in a manner contemplated in the LEC dispute resolution rules,” Mr Anwar states.
Leavea also alleges LEC repeatedly disconnected supply while billing disputes remained unresolved, forcing the company to rely heavily on generators.
“As a result of power cuts and outage… the applicant was forced to run and operate the facility through use of a generator at the very huge expense.”
Mr Anwar says independent investigations later identified technical faults, including incorrectly switched electrical phases that allegedly damaged equipment.
He further alleged the installation approval may have involved “some alleged corruption or illegal activities involving the contractor and officers of the LEC”.
According to the application, an LEC engineer finally visited the site on 26 June 2024 and allegedly confirmed inconsistent phase angles and an electrified earth wire but failed to return to resolve the matter.
He says electricity was ultimately disconnected on 18 July 2024.
“The result of the unlawful discontinuance was the loss of the crop and mother stock.”
Leavea is seeking M249.6 million for crop losses, M281.9 million for immediate revenue losses, M2.786 billion for projected future income over 10 years and M2.979 billion linked to a planned stock exchange listing, together with diesel costs, alleged overbilling, interest and legal costs.
LEC has not yet filed its response.