FirstCred under judicial management
FirstCred micro-finance institution has been placed under judicial management following gross misuse of P120 million from investors by former management under Getbucks.
The High Court has recently ruled in favour of FirstCred, declining petitions from creditors, ALCB Fund and AS Mintos Market Place to wind up the Company.
Commenting on the development, FirstCred Chief Executive Officer, Dudu Garekwe said forensic examinations show that P160 million was raised between 2017 and 2019 when the Company was operating as Getbucks Botswana and P120 million of the funds was grossly and inappropriately misused, resulting in its loss.
“Such was the level of malfeasance that investor funds only spent two days in the then Getbucks Botswana bank accounts before they were taken out of Botswana and spent.
“The funds were primarily raised from AS Mintos MarketPlace and from a listed bond on the Botswana Stock Exchange whose investors included ALCB Fund managed by Lions Head and Ecsponent Limited (now Afristrat Investment Holdings Limited),” said Garekwe.
She highlighted that the misdeeds by previous management resulted in the loss of P120 million and made it almost impossible for the now FirstCred to repay investors who became victims of previous management’s mismanagement and poor governance practices between 2017 and 2019.
“As new management from 2020, we have focused on engagements with creditors who were exposed to this loss and sensitised them of the negative impact on the ability to timely repay funds due to such high levels of misappropriation.” Garekwe said winding up of the company would have closed the doors for the company to fully investigate and bring to book those responsible.
The ruling follows the completion of two independent forensic reports conducted, pointing to gross misappropriation of funds by former management.
“We have reported the findings of the forensic reports to the regulatory authorities for investigation and have retained counsel with a view on legal action against individuals implicated,” Garekwe said.