Mapesela threatens Shi, Standard Lesotho Bank

. . . As government sacrifices M8 million bailout for farmers

MATHATISI SEBUSI and TEBOHO KHATEBE MOLEFI

MASERU – Agriculture minister, Tefo Mapesela has threatened the Stone Shi-owned wool broker Maseru Dawning and its banker, Standard Lesotho Bank, with unspecified action over wool farmers’ outstanding payments dating way back to 2018.

The threat comes as the government has committed M8 million to pay the wool and mohair farmers owed by Shi’s wool brokerage.

While announcing government’s intervention in the matter, Mapesela this week said once due payments are made “we will deal with Stone Shi and ensure that he repays all the money.”

“Agriculture is a lucrative business that has potential to grow the country’s economy, so to cash in on the opportunity the government has, as a result, opened a dipping levy fund for farmers which could be accessed anytime there is need to buy medication for their livestock without having to make requisitions from government,” he said.

Mapesela also announced plans to reduce red tape to allow easier access to funds when farmers need to buy urgent inputs such as medication for the animals.

“Depositing proceeds from the dipping levy into a government account impedes farmers access to funds for inputs as they are forced to follow bureaucratic procedures to access the money.

“Government will, from now onwards, only play the role of an overseer of the fund to ensure that it is not misused,” Mapesela said.

Unpaid farmers have been struggling after Maseru Dawning failed to pay them in recent years until this week government announced they will cough up the hefty sum.

Maseru Dawning had declared he will pay the wool and mohair growers before the end of December 2020.

Shi’s brokering license was suspended in October 2020 by Ministry of Small Business Development, Cooperatives and Marketing over failure to pay the farmers.

The suspension can only be lifted once he has fully paid all debtor farmers.

Asked to back up government’s decision to shoulder the debt Principal Secretary in the Ministry of Small Business, Bereng Makotoko Makotoko, said the outstanding payments have dragged on for too long their main objective at the moment was to see the farmers paid.

He also reiterated government’s stance that “it is only after all wronged farmers have been paid that the government will decide what to do with Stone (Shi) and Standard Lesotho Bank.”

“Because of the long-awaited payments, government’s interest and focus now is to pay farmers, not to resolve or say what we will do with Stone or Standard Lesotho Bank. After farmers are paid, it will be then that government decides on the way forward,” Mokotoko said.

Following the enactment of the Agricultural Wool and Mohair Regulations of 2018 restricting wool and mohair exports, farmers were forced to take their fabric to Maseru Dawning as it was the only approved local broker – but some of the farmers were never paid for their wool and mohair.

The government this week announced meetings with farmers from Maseru, Quthing, Qacha’s Nek and Botha-Bothe, farmers’ associations, shearing centres, brokers and commercial banks (Standard Lesotho Bank and Lesotho Post Bank) to verify lists of farmers that are still owed.

Deputy Prime Minister Mathibeli Mokhothu said the government is prepared to resolve issues surrounding the payments of farmers “and work with you to grow the industry.”

Mokhothu added that the government will pay farmers from its coffers and announced that parliament has approved cabinet’s proposal to pay farmers, adding M8 million has been earmarked for this exercise, but conceded that a correct and reliable list was hard to agree on.

“We have discovered that farmers have lost faith in the industry because of not being paid. We are trying to uplift them and encourage them to work hard and prosper in the industry.

“In order to grow the industry, parliament will establish an Authority that will administer the wool and mohair industry,” he said.

He further pointed out that to ensure that the agriculture industry in the country grew without any bottlenecks, all agri-businesses will be moved from Ministry of Small Business development, Cooperatives and Marketing to the Ministry of Agriculture and Food Security “where all services pertaining the industry will be issued from.”

Shi considers legal action

In November of 2020 at the height of tension between Standard Lesotho Bank and the wool and mohair broker, Shi claimed he had raised funds to pay off some farmers he owed.

Speaking to Public Eye at the time he said he was also considering legal action against the bank for “unwarranted” service charges and double payments made to farmers.

The Chinese businessman had failed to clear farmers’ debts and arrears dating back to 2018.

Public Eye’s inquiries at the time had suggested that Shi had sourced some funds and planned to pay the farmers whose debts dated back to 2018/2019 by Christmas 2020.

The rest of the farmers would be paid by the end of January this year.

Shi assured this paper of his unrelenting efforts to ensure his license is reinstated as the suspension was damaging his reputation and the company’s goodwill.

He further claimed at the time that he would have started paying farmers but he had “to date not received any reconciliation from Standard Lesotho Bank, statements he urgently needs to process farmers’ payments.”

“Shi sourced money elsewhere to pay the farmers money for 2018/2019, that amounts to over M2 million.

“Expectation is that farmers that are owned money for 2018/19 will be all paid by Christmas, while those that are owned money for their 2019/20 fabric will be paid by the end of January (2021),” the Chinese businessman’s information office said.

The company suggested reconciliation statements for the Qacha’s Nek farmers was the biggest challenge they faced as it was the “most complicated and messed up”.

Shi alleged to have raised these concerns with the bank but that the bank “always sent me from pillar to post while they had to provide me with the statements I need to reconcile my transaction and know for sure who they paid and who I owned.

“The bank even conceded the messed up my accounts during several of our meetings. I am even considering using alternative banks to facilitate the arrival of the money that I am going to pay the farmers with.”

Maseru Dawning claimed to have received around 500 queries, but expected more to arise as the payment system was sullied with corruption.

Shearing sheds and farmers’ associations are owed outstanding payments.

On this matter Standard Lesotho Bank’s Acting Head of Marketing, Manyathela Kheleli, indicated that the bank is a regulated entity which, if suspected of irregular service to its customers is approached as a first step of protocol to iron out matters or seek clarification on a contentious issue.

“There is also the Central Bank as a regulator to resort to for any client, and not only Stone Shi, for resolution of any wrongdoing we may be accused of,” Kheleli said.

He said the bank’s doors remained always open to all customers to air their grievances and seek resolution.

Government joins the fray

Then incumbent Principal Secretary in the small business ministry, Tankiso Phapano, confirmed that the decision to suspend Shi’s license was arrived at after both the broker and his banker failed to meet timelines set to pay farmers.

He said the ministry had numerous meetings with Standard Lesotho Bank and Maseru Dawning during which it was decided that they resolve their differences within a stipulated time “but the duo neither paid the farmers nor reported back to the ministry.”

“We gave these people more than two chances to resolve whatever problem they have. Timelines that we all agreed on were set but they failed to deliver.

“As a result, we decided to suspend their license to avoid accumulation of challenges and give them a chance to settle the money they owe these farmers,” he said.

SLB in defensive mode

While declining to answer several of the questions, Standard Lesotho Bank stated as a matter of fact that Maseru Dawning was no longer their client.

They argued that on the basis of the foregoing, and the explanation relating to issues of client confidentiality, they would not comment further on any of our questions, “especially noting that our former client is also on record contemplating to sue the bank.”

“We have noted these allegations and we have over time engaged robustly with the client up to the level where these issues were even discussed in parliament, as this issue is of national interest.

“At this point, I can only indicate that as a regulated financial institution, getting into the specifics of our relationship with our client would be in breach of bank-customer confidentiality, which is also provided for in the Code of Banking Practice,” Kheleli said in an earlier interview.

Kheleli denied there was ever a time that the bank was been faulted for irregular conduct when it comes to clients’ finances.

He said Standard Lesotho Bank was a business of integrity where irregular conduct is frowned upon and discouraged throughout all its operations.

He argued: “As a point of departure, let me point out that together with the rest of the banking sector under the banner of the Bankers Association of Lesotho we subscribe to the Code of Banking Practice that was launched by the industry in 2014 essentially to foster good relations founded on fairness, transparency, accountability and reliability. This exists between the banks, and current or potential customers.

“Indeed, there have been isolated cases where customers felt we have faulted them, and such instances continue to be addressed on their merits from time to time.”

Public Eye wanted the bank to vouch for Shi’s claims over his reports that over 6 000 wool and mohair farmers are still to be paid for fabric they sold through Maseru Dawning Trading as far back as 2018, against claims by the broker that the bank hampered the process.

Maseru Dawning earlier in 2020 suggested they had paid more than 51 000 farmers through Standard Lesotho Bank with a few hundreds still to receive their money.

The bank could not vouch for this. And again the broker charged that Standard Lesotho Bank has contributed immensely to his problem over the farmers’ payments because, in numerous instances, they double paid some farmers while in other cases farmers were paid three times more than their dues.

That bank was also mum on this allegation. Standard Lesotho Bank could also neither confirm nor deny whether Maseru Dawning ever raised these issues with them.

The bank would not say if they had noticed anything irregular with reconciliation processes in its Qacha’s Nek district branch, or any other related to Maseru Dawning’s accounts and payments to farmers.

Shi told Public Eye he had written to the bank several times, and had meetings with the bank’s management over several of his concerns to enable him to pay the remaining farmers, and that the bank has never responded or addressed him.

Efforts to get a comment from either Shi or the Maseru Dawning on these latest developments were fruitless.

Shi’s Information Advisor, Keketso Lawrence, said Shi was the only one in best placed to respond to the paper’s inquiries. Shi’s phone was not answered until the paper went for print.