M500m LCA compliance tool raises stink

. . . as price overshoots M17 million ceiling

KANANELO BOLOETSE

MASERU – Lesotho Communications Authority (LCA) purchased Compliance Monitoring and Revenue Assurance Tool for over M529 million in 2020, yet its board had approved the acquisition of the tool at a maximum cost of M17 million.

This is the version of the acting auditor general, Monica Besetsa, in her report on the consolidated financial statements of the government of Lesotho for the year ended March 31, 2021. Besetsa says her office’s scrutiny of the records pertaining to procurement of the tool revealed that laws guiding the procurement processes were not fully complied with and this compromised credibility of the tender. Her report lists alleged anomalies in the procurement process.

One of them is the alleged involvement of the then Chief Executive Officer (CEO) of LCA, ’Mamarame Matela, in the evaluation of tenders, “which has impacted the outcome of the results of the preferred bidder”. Matela’s contract as LCA CEO expired on March 13 this year after being on suspension from June 2020.

She told Public Eye yesterday that a good audit relies upon a set of principles to help make it an effective and reliable tool. Those principles, she said, are integrity, fair presentation and evidence-based approach among others.

“The auditor general audited LCA while I was already on suspension and she never bothered to hear my side of the story. The people who remained at LCA had no interest to explain how I became part of the process and how they advised me to be part of it,” she said.

“Auditor general never called me to give her my side of events but relied on thieves to give her the story and they concealed facts,” she added. She explicitly mentioned the names of four LCA workers whom she said advised that “I must join the evaluation since it was a big project and I was acting as Chief Regulatory Officer at the time”.

Public Eye withheld the names and will publish them after giving the four workers adequate time to respond to allegations made against them by Matela. She further told this publication that the board received the explanation, was happy with it and approved the evaluation report with her name on it.

Matela was unveiled as deputy leader of the Teboho Mojapela-led Socialist Revolutionaries (SR) party in May. “LCA processed the tenders which were far above the threshold of M17 million by a range of M105 008 590 to M705 865 148 or 618 percent to 4 152 percent,” Besetsa said in her report.

She added: “The outrageous tender prices were an indication that a thorough research was not conducted to establish the market price for the tool.” She further stated that the board ought to have been involved and made aware of the variation for it to make a decision in the best interest of LCA. “Nonetheless, that was not the case and the tool was purchased at an amount of M529 126 709,” she said.

A commencement fee of M7 242 021 was paid to the supplier, a South African company, Global Voice Group (GVG), in December 2020. The master service agreement between LCA and GVG was signed around the same time. GVG has reportedly said it successfully bid for the tender in an open and transparent process.

The company CEO, James Claude, alleged that former communications, science and technology minister, Thesele ’Maseribane, approved the tender. ’Maseribane was replaced Keketso Sello as communications minister in a February 3, 2021 cabinet reshuffle. On June 3, 2021, Sello suspended Matela from her position as CEO on allegations of corruption or irregular involvement in the tendering process and the award of the tender to GVG.

In essence, the suspension letter penned by Sello revealed that the board resolved, in its meeting allegedly held on June 2, 2021, that an investigation into the award of the tender must be conducted and that her presence in the workplace during the period of investigation would not be viable.  It thus resolved that she be placed under precautionary suspension pending the outcome of the investigations. At the time when LCA entered into a contract with GVG, Motanyane Makara, was the chairman of the LCA board.

Makara’s chairmanship and membership on the board were, on the other hand, terminated by Sello on May 31, 2021. He was fired principally on three grounds – alleged incompetence to act as chairman of the board, irretrievable breakdown of the working relationship with Sello and suspicious relationship with Matela.

His removal from chairmanship and membership was preceded by a suspension made on May 27, 2021, and subsequently, a show cause letter dated May 29, 2021. According to the auditor general’s report, LCA and GVG project was put on hold as there was no enabling legislation. “This is a sign that it was premature for LCA to acquire the tool,” it reads.

The auditor general also indicated that there was no evidence that the issue of putting the project on hold has been communicated to the supplier and failure to have done so could lead to litigation against LCA. The enabling legislation that the auditor general referred to is the Communications (Compliance Monitoring & Revenue Assurance) Regulations.

When they challenged their removal from LCA, Matela and Makara alleged that at the time LCA and GVG entered into and signed the master service agreement on December 21, 2020, they did not anticipate that Sello would want M 3 000 000 and other conditions before signing the regulations.

Sello has denied that he wanted a bribe before he could sign the regulations. He was removed from the ministry of communications on June 4, last year and replaced with Tšoinyana Rapapa who is the current minister.