Shi comes out fighting as wool and mohair controversy rages

Bereng Mpaki

THE Chinese-born investor, Stone Shi, who is under-fire for allegedly fleecing wool and mohair farmers by allegedly selling their produce at ridiculously low black market rates instead of the open market, has fiercely defended himself against the criticism.

Mr Shi dismissed as false all the allegations of under-hand dealings that have been labelled against him, saying they are the work of his enemies who are opposed to his altruistic quest to ensure the independence of Lesotho’s wool and mohair industry which has allegedly been captured by South African brokers.

Mr Shi defended himself at a time when his Lesotho Wool Centre (LWC) was similarly forced to call a press conference to respond to widespread concerns that it has left many wool and mohair farmers impoverished through its failure to timeously pay them for their produce which it has exported on their behalf. The LWC recently revealed that it had so far paid farmers a total of M150 million since government controversially granted it the monopoly to auction wool and mohair on behalf of local farmers in 2018.

The LWC said it clear the outstanding arrears to farmers by the end of this month.

Mr Shi has been the subject of virulent attacks from several quarters including the opposition parties who accuse the government of sabotaging farmers to ensure that he (Mr Shi) benefits from the 2018 arrangement in which Mr Stone’s company is the only entity which is allowed to sell wool and mohair on behalf of local farmers.

This followed an agreement between the Lesotho National Mohair and Growers’ Association (LNWMGA) and Mr Shi’s company, Maseru Dawning Trading, to develop the M40 million Lesotho Wool Centre (LWC) where wool and mohair will be sold directly from Lesotho to international buyers rather than from South Africa as was the case with brokers, BKB.

The LWC is located in Thaba-Bosiu and its stated aim is to ensure that local farmers maximise the financial returns from the sale of their fabric which will be sold directly to overseas spinning factories through an online auction.

It is envisaged that by reducing the number of intermediaries involved in the selling process, the wool centre will ensure that the farmers not only get higher financial returns but the payment process will be expedited.

The Agricultural Marketing (Wool and Mohair Licensing) Regulations 2018, which were gazetted by the Minister of Agriculture and Food Security, Mahala Molapo, on 4 May 2018, state that no one will be allowed to trade in wool and mohair without a licence from the Ministry of Small Business, Cooperatives and Marketing.

The regulations further state that “the holder of an export license shall not export wool and mohair unless it is prepared, brokered, traded and auctioned in Lesotho”.

“A person who is found to be in a business of wool and mohair shearing shed or exporting without a license will be fined M20 000 or to imprisonment for a period not exceeding two years or both sentences. A person guilty of brokering, testing, processing, trading and auctioning wool and mohair without a licence will be eligible for a M50 000 fine or a maximum of five years imprisonment.”

The regulations were described as draconic by the opposition and they were recently struck down as illegal by a recent High Court ruling which the government has vowed to appeal in the Court of Appeal once the apex court resumes its sittings.

Addressing the media recently, Mr Shi came out guns blazing, saying the criticism against him was the work of his local and international enemies who are opposed to his altruistic quest to ensure the independence of Lesotho’s wool and mohair industry which has allegedly been captured by South African brokers.

Some of the accusations leveled against Mr Shi are that he is selling Lesotho’s wool and mohair very cheaply on the black market as opposed to the open market where any buyer has access and it can fetch higher prices for the farmers.

It has also been said that Mr Shi is a fugitive on the run from crimes he committed in his home country of China.

“I have been accused of many things including being broke, yet I have invested a lot of money to develop the wool centre,” Mr Shi said.

“Some have said I am a fugitive on the run. All these are not true. It is just lies being spread about me. It would be understandable if my enemies were attacking me over things that are true but they are spreading lies because they don’t have anything on me.”

He insisted that he had invested in Lesotho to improve the wool and mohair industry and to achieve its independence from South Africa brokers.

“I have a clear mind that I am here to do good for Lesotho farmers.

“I have many enemies in and outside the country. I am fighting every day to protect the work that I have come here to do, which is to improve and bring about independence in the wool and mohair industry. I have been keeping quiet for too long but it is time that I responded to all these malicious false accusations about me,” Mr Shi said.

Meanwhile, the LWC says it has so far paid farmers a total of M150 million since government controversially granted it the monopoly to auction wool and mohair on behalf of local farmers in 2018.

The amount is said to be woefully less than the millions of maloti that it owes the increasingly restive farmers. LWC said it clear the outstanding arrears to farmers by the end of this month.

LWC Spokesperson Manama Letsie said the centre has to date auctioned about 22 000 bales of wool and 3 000 bales of mohair with a total sales value of about M500 million, which is expected to be paid to the farmers.

The centre estimates that about 32 000 farmers have sold their wool and mohair through it in this season’s auction which ended in April this year.

Mr Manama who admitted to “teething problems”, said the centre had so far captured the data of 20 000 farmers into its system with more than 75 percent of these farmers having been paid although these have largely been part payments.

“As the LWC, we are saddened by the delays and inconveniences caused and thus our resolve is that all farmers’ payment would have been made by the end of this month, May 2019.

“The centre has also given assurances to the government that farmers will be paid all their monies even for the late auctions, whose payments from the buyers may not have yet been paid to the centre,” Mr Letsie said, adding they had faced several teething problems ranging from policy, logistics and administrative issues in their first year of operation.

“We wish to mention that our first season in the auction business has not been smooth sailing, with a number of challenges.

“The biggest challenge has been the delays in transferring payments to the farmers. It is not only the farmers who are complaining, even the government has also registered this concern and it will help in the speeding up of the payment process.

“While it was not easy to capture all the data of all the farmers who brought their wool and mohair to Thaba Bosiu, the verification process and the actual transfer of monies into individual farmers’ accounts was an even greater nightmare and many causes of the delays were a result of this process.

“It has to be mentioned that while the farmers did give their accounts to the centre the challenge was that many of those accounts were found to be inactive or dormant and it was necessary for the banks to have such accounts re-activated for payments to be effected.”

Mr Letsie also dismissed allegations that the centre auctions wool and mohair on the black market.

“We wish to state that LWC is a business venture that is run according to international standards and regulations in the industry and there is no way we can sell our stock on the black market as it has been alleged in some media outlets. We hold our auctions on the e-platform and it is open for everybody to see,” Mr Letsie said.