BOPEU ship sinking
Former President of Botswana Public Employees Union (BOPEU) Andrew Motsamai says he feels for the union members as it is clear the ship is sinking.Motsamai who is currently entangled in a legal dispute with the union has indicated that even his sacking as Babereki Investment Executive Chairman was not business prompted but had everything to do with political wars at the union of choice.
Motsamai had slapped his former employer with a demand letter for payment of more than P2.1 million and interest at the rate of 10 percent. Babereki Investment would later issue a counterclaim for more than P 43 million. Motsamai has so far been paid more than P1, 2 million by his former employer following the termination of his contract last year.
Motsamai has been accused of contravening Section 127 of the Companies Act during the period December 2016 and before by overriding the decisions of Babereki Investment as he allegedly acted without the approval of the Board in respect of various transactions that Babereki Investment engaged into with third parties.
Speaking to Botswana Guardian in response to the just released BOPEU Consolidated Annual Financial Statement for the year ended 30 June 2017 and Babereki Investment Audit Report, Motsamai says the audit report has vindicated him because there was no wrongdoing found on his part. According to him his dismissal was not done for the good of the union but his colleagues had a political agenda.
“Right now there is a huge mess when you go through the BOPEU Consolidated Financials. During my time of more than 10 years as president of the union this was never experienced. “I mean what happened to the close to P1 million? It is only that my colleagues did not share the same vision and strategy for the union and its business arm with me,” he pointed out.
The financials prepared by Ernst and Young Auditors indicate that some of the payments to third parties amounting to P939, 918 were not supported by adequate documentary audit evidence. It has also been revealed in the report that the union investment subsidiaries (the Group) has not consolidated investments in subsidiaries; Babereki Ka Lorato Funeral Services and Future Sustain International that the Group acquired during 2016 because it has not yet been able to determine the fair values of certain subsidiaries’ material assets and liabilities at the acquisition date.
“The investments are therefore accounted for on a cost basis. Under International Financial Reporting Standards, the Group should have consolidated these subsidiaries and accounted for the acquisition based on provisional accounts. Had Babereki Ka Lorato Funeral Services and Future Sustain International been consolidated, many elements in the accompanying consolidated financial statements would have been materially affected.
“The effects on the consolidated financial statements of the failure to consolidate have not been determined. There are no effects on the separate financial statements. The Group’s payment parties amounting to P939,918 which are included in the administrative expenses and donations in the Statement of Comprehensive income as amounts of P86, 124, 341 and P3, 528, 408 respectively were not supported by sufficient appropriate audit evidence to confirm the occurrence and measurement of the recorded expenditure,” the auditors noted.
“There was no system of internal control over such payments on which we could rely for the purpose of our audit. Owing to the lack of accounting records, we were unable to confirm the occurrence and measurement of this expenditure by alternate means. Consequently, we were unable to determine whether any adjustments to these amounts or profit or loss may be necessary,” the auditors stated.
The impairments of the subsidiaries according to the report have now negatively affected the value of both BOPEU and Babereki Investments by close to P50 million. Motsamai wondered how the subsidiaries could be written-off if they have not been audited to determine their performance. He said he never sat in any of the subsidiaries as a board member. “I could not supervise subsidiaries during my time because they had their own board members.
Those boards are the ones that should be supervising their management. I mean how do you write-off a subsidiary like African Wild Lodges and Safari Pty ltd which is making a lot of money in the tourism industry?” he wondered. “BOPEU has three lodges in the Ngami area where they all charge in US Dollars rates from USD 750 per night which translate into P7 500.
The only investment I could say I made bad judgement was Future Sustain International but can you be judged just for one investment gone wrong and people write-off other investments?” asked Motsamai. He revealed that the implication of having the BOPEU audit report qualified is that they have a tough time ahead for any lender or funder to consider them if there is a problem with internal controls.