Minister demands explanation on BKB
THE Minister of Small Businesses, Cooperatives and Marketing, Chalane Phori, says that Standard Lesotho Bank should explain how South African wool and mohair auctioneers, BKB, managed to open a bank account before they were registered in Lesotho.
BKB only registered in the country in March this year. The company has been a broker for Lesotho wool and mohair farmers since 1974 and they have been operating from the Eastern Cape in South Africa. They opened an account with Standard Lesotho Bank in 1993 to facilitate payments to local farmers.
However, Mr Phori questioned how the company had been allowed to operate a business account in Lesotho for 25 years when they were not registered in the country.
“The business regulations of Lesotho forbid any company which is not registered locally to open a bank account with any of the local banks,” Mr Phori said.
“However, BKB has a Standard Lesotho Bank account which they have been using for the past 25 years.
“Standard Lesotho Bank has to furnish us with answerers as to how a foreign company manged to open such an account which it has been using to pay local farmers. I was responsible for the freezing of BKB’s account in January this year, asking the police to investigate where the money was from because we cannot prove it was from the wool and mohair sales since we know nothing about BKB financials.
“For now this is all I will say but then my ministry has made been working on the issue and we will reveal everything soon.”
The BKB account was frozen on 12 January this year on the orders of the Maseru Magistrates’ Court after an application by the police.
Police spokesperson Superintendent Mpiti Mopeli told the Sunday Express’ sister paper, the Lesotho Times that this was done to facilitate a police investigation into the “irregular” flow of money into the BKB account.
BKB subsequently appealed to the High Court on 17 January and they won the case on 23 January this year.
The Sunday Express recently contacted Standard Lesotho Bank for comment on the issue without any success.
Standard Lesotho Bank Marketing Manager, Manyathela Kheleli’s mobile phone rang unanswered and efforts to get assistance from the bank’s call centre also proved futile.
This publication will publish the Standard Lesotho Bank’s response as soon as it is communicated.
There is an ongoing war of words between Mr Phori and BKB.
Last week, the minister accused the company of disrespecting him and making ill-advised statements regarding the proposed changes to the marketing of Lesotho’s wool and mohair.
Mr Phori’s comments came in the wake of claims by BKB’s wool and mohair general manager, Isak Staats that the minister had been ill-advised to amend the legislation to prohibit Lesotho’s wool and mohair from being sold to international buyers from South Africa.
For the past 44 years, BKB has been selling wool and mohair on behalf of 40 000 local wool and mohair farmers through an auction in the Eastern Cape. The company only recently opened a local branch as part of efforts to be allowed to continue trading with local farmers.
However, the government argues that the entire wool and mohair operation which is conducted in South Africa disadvantages Lesotho as the country does not receive any taxes from BKB hence the decision to have the transactions with international buyers conducted from Lesotho.
Mr Staats criticised the government decision, saying Mr Phori had been ill-advised to make a short-sighted and ill-informed move to stop the wool and mohair transactions in South Africa.
“The intention of the minister to change the law in order to prohibit the direct export of wool and mohair to South Africa is short-sighted and ill-informed,” Mr Staats said in a recent interview with the Lesotho Times.
“We operate in a free market system where any company has the right to exist if it adds value to the business of the customer.
“Lesotho producers and traders have been making the choice to do business with BKB for all these years for purely economic reasons.”
However, Mr Phori said Mr Staats’ comments were “disrespectful” and ill-informed.
He said the company had not even bothered to visit his office to get proper information on the proposed legal changes and this was despite the fact that his door was always open to all small and medium enterprises.
“BKB should do business, which is what they know, and not politics which they know nothing about,” Mr Phori said.