MASERU — The ruling Lesotho Congress for Democracy (LCD) owns a private company that has ventured into the country’s lucrative diamond mining industry, the Sunday Express can reveal.
Files at the Law Office show that the LCD formed the company, Nonyana Ntsu Investments, in 2008.
LCD insiders say the motive was to raise money to fund party operations through business ventures like mining and other business opportunities that may arise.
This has sparked fears that the ruling party might become both player and referee in the mining industry in particular and the business sector in general.
Nonyana Ntsu Investments was registered on August 29 2008 and its registration number is 2008/971, according to the file at the Law Office.
Deputy Prime Minister and LCD stalwart Lesao Lehohla is listed as a shareholder with one share while the party has 999 shares.
The company has already started doing business.
This paper’s investigations have revealed that Nonyana Ntsu Investments is currently in a partnership with two other companies in a consortium targeting Lemphane Diamond, a mine in Butha-Buthe, where feasibility studies are already underway.
The consortium is called Lihlaba Mining and sources say if feasibility studies at Lemphane Diamond go according to plan the consortium could start production this year.
Nonyana Ntsu Investments’ partners are Motete Mining, a company owned by local businessman Mohau Thakaso, and Vermogen Resources, a South African company based in Sandton.
Thakaso’s partner in Motete Mining is another local businessman, Lefa Ntsike.
In the consortium Nonyana Ntsu Investments is represented by party treasurer and Trade Minister Popane Lebesa.
Nonyana Ntsu Investments has a 12 percent interest in the consortium, the same as Motete, while Vermogen Resources has 51 percent.
It is not clear who owns the remaining 25 percent but there is speculation that this chunk could have been warehoused for potential investors that the consortium might need in future.
The feasibility studies at Lemphane Diamond Mine are being carried out by Meso Diamonds, owned by local tycoon Sam Matekane, and have been going on for the past two months.
It seems the LCD’s company could have been named after the late Ntsu Mokhehle, the founder of the ruling party.
The name could also have been drawn from the party’s eagle symbol.
Natural Resources Minister Monyane Moleleki has confirmed Nonyana Ntsu Investments has interests in the diamond mining industry but said the “issue is too sensitive” and he could only discuss it “after the World Cup”.
Party spokesperson and Communications Minister Mothetjoa Metsing also confirmed the existence of the company.
He said the party had formed Nonyana Ntsu Investments to raise money to fund party operations.
means eagle and nonyana a bird in Sesotho.
Metsing however declined to comment further saying it was only Lebesa who could discuss the matter in detail as he was the party’s point-man in the consortium.
Efforts to contact Lebesa were fruitless.
The Sunday Express can reveal that the consortium is however facing stiff competition from six other companies that are said to be also eyeing Lemphane Diamond.
Some of the companies, sources say, are claiming to have prospecting rights for the area in which the mine is based.
While in principle there is nothing wrong with a ruling party forming a private company, there is a danger of conflict of interest especially when that company deals with government tenders and other businesses that require government approval like mining.
The danger, experts say, is that the government might be partial in dealing with a company in which the ruling party has shares.
There is a risk that a company owned by a ruling party might have an unfair advantage when it bids for government tenders or applies for mining rights from the state.
This is because in most cases the ministries that award the government tenders or give the mining rights are headed by ministers who are also senior party members.
Also, key operations officers are normally party functionaries.
South Africa’s ruling African National Congress (ANC) has found itself in a compromised position after it emerged that its company, Chancellor House Investments, had benefited from lucrative government contracts.
The company has a 25 percent stake in Hitachi, a Japanese technology firm that recently won a M26 billion tender to build a coal power station for Eskom.
Chancellor House is now poised to get a M50 million profit from the deal.
The ANC’s company also has stakes in other consortia that won lucrative government tenders.
It is also involved in a consortium that has manganese mining rights with a potential value of M1 billion.