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Funeral parlour battles closure

Nat Molomo

MASERU — Phokeng Funeral Parlour (Pty) Ltd, a company that bought funeral scheme clientele from ABC Insurance Brokers in June last year, is fighting closure in the High Court. The company filed papers in the High Court on April 4 seeking an order to stop the Central Bank of Lesotho from warning the nation about its illegality through the mass media.

The application sprang from the central bank’s declaration that ABC Insurance Brokers was operating illegally because it had failed to renew its licence. In a widely circulated statement, the central bank urged the public “to stop paying premiums/money to ABC Insurance Brokers with immediate effect”.

The central bank also swiftly moved to freeze Phokeng’s business accounts held with the First National Bank. Now, unable to access funds and clients not paying premiums following the central bank’s warning, Phokeng has filed an application before Judge Justice Thamsanqa Nomngcongo seeking to unfreeze its accounts.

The central bank reasoned that ABC Insurance Brokers used to be a legally registered company and was entitled to solicit or negotiate insurance for commission on behalf of the public. The central bank claims that the ABC Insurance Brokers’ licence expired on February 22, 2013 and it has never been renewed. Dr Retšelisitsoe Matlanyane, the Central Bank Governor, deposed an affidavit in which she rejects ABC Insurance Brokers’ claims.

“The ABC is therefore not a licensed insurance broker anymore,” Matlanyane said, repeating the statement she issued to the press. Phokeng is asking Justice Nomngcongo to order the central bank to issue another statement and distribute it to all media houses apologising for “smearing and damaging (its) good name”.

Phokeng’s lawyer, Advocate Mahlomola Manyokole, argued on Tuesday that by going to public media the central bank had condemned and tarnished the image of Phokeng before hearing it.
“Commissioner of Insurance with all resources at his disposal cannot go to the media and make such announcements, is that how to go about it, no, it is not,” Manyokole protested.
He said the central bank should have gone to the Ministry of Trade where Phokeng is registered to see that it is legal.

He said as a result of those announcements people have an impression that Phokeng Funeral Parlour is illegal. “We are here because we say the applicant has not been given an opportunity to be heard,” he said. He argued that the principles of natural justice dictate that the Lesotho Funeral Parlour should have been afforded a hearing.
The central bank’s counsel, Advocate Joubert Zeitzman, said that through the investigations Matlanyane established that during June 2012, the ABC Insurance Brokers had informed policy holders verbally and in writing that the ABC Umbrella Funeral Scheme had been sold to Phokeng Funeral Parlour with effect from June 1, 2012.

“They also informed the policy holders that the conditions of the policy had not been changed, neither had the brokerage service been changed,” Zeitzman submitted. He said Phokeng was not only collecting money from brokerage illegally but was also keeping these monies. He said the company had not made a case for a clear right, and wondered what hearing it was looking for when it was trading illegally.

He said Matlanyane had acted to protect members of the public. The central bank lawyer said the people who have been paying their monies since 2006-2007 are not protected because Phokeng Funeral Parlour is not an insurance scheme. “The bank has to take proactive steps to protect these people,” he said, asking the court to dismiss the application.

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