LEC wastes M5m on ‘ghost’ software from defunct firm

MOTSAMAI MOKOTJO

MASERU – The Lesotho Electricity Company (LEC) allegedly squandered M5 million on software from Jagei (PTY) Ltd – a company later liquidated, revealed suspended LEC executive Lebohang Mohasoa before the Public Accounts Committee (PAC).

The scandal unfolds as LEC’s board tries to block the PAC’s probe, calling it “flawed” and demanding evidence be scrapped.

In court filings, the LEC accused the PAC of overreaching in its investigation into alleged corporate mismanagement. However, Chief Justice Sakoane Sakoane struck the case from the urgent roll, clearing the path for the committee to resume questioning the board over governance and financial irregularities.

Nevertheless, this week Mohasoa narrated how the LEC paid M5 million to a company, which has been liquidated, after PAC member Dr Tšeliso Moroke wanted to understand the procurement process.

The argument that was advanced by Moroke was around the procurement legislation, particularly section 53(1), which requires the head of the procurement unit to report to the chief accounting officer.

“Due to the fact that I am on suspension, I have no access to records, but I took the initiative to ask the managing director to assist with information which can help the committee.

What I can recall with precision is that a tender was awarded, which cost M5, 260 million,” Mohasoa told the committee.

In the same probe, PAC chairperson ‘Machabana Lemphane-Letsie wanted clarity around whether the company bought the software from a ‘company’ or ‘consultant.’

“I apologise for using the word ‘consultant’, I am referring to this company (Jagei),” he said.

However, Lemphane-Letsie interjected, wanting to understand whether Jagei was acting on behalf of the consultant or it was contracted to provide software.

“We wanted an internet solution from them…,” Mohasoa said.

The chairperson asked the suspended customer experience head whether an open tender was undertaken for the provision of the job.

Mohasoa indicated that it was, thus he was instructed to provide relevant documentation which allowed for the selection of Jagei.

Last week, National Assembly Chair of Chairs, Mokhothu Makhalanyane, welcomed the Chief Justice Sakoane’s decision as a temporary vindication, he said “this judgement will teach others to respect Parliament.”

He clarified due process was followed in that “we initially granted LEC three weeks to prepare after their request. When they still refused, summonses became necessary.”

In his affidavit, LEC Chairperson Thabo Khasipe countered that the PAC acted as “accuser, judge, and executioner”, calling the process “unfair” and claiming the board was “ambushed.”

“…as chairperson of the board and upon legal advice rendered to the public enterprise, it proves necessary to elaborate on certain critical aspects of our engagement with the PAC that were not sufficiently addressed and which are of significant concern to the board.”

Unadulterated, Khasipe indicated that while he appreciates the committee’s mandate to play an oversight role, currently it doesn’t align with its powers as per standing orders.

“(Hence) I consider it my duty to seek protection for the members of the board and the institution by requesting to allow us to fully and completely account for the affairs of the LEC by providing comprehensive answers to their often comprehensive questions.

Failure to do so carries the risk of undermining the board’s effectiveness and could have severe negative consequences for the critical national mission of rectifying the challenges facing LEC, an objective we have reasonable cause to believe is shared by the PAC, the board, the shareholder and the Basotho nation at large,” he continued.

Recently, acting energy minister, Mohlomi Moleko, defended the M2.1 million salaries paid to the acting LEC executives after the company’s board enacted a resolution to pay 100 percent allowances to the acting managers.

The board reversed a 2022 decision to pay 10 percent in acting allowances in a bid to curb costs.

“Here’s an alternative: if you don’t do anything, the company will sink deeper if you don’t spend money to fix it. You cannot say these people need to work for free, but the policies indicate that when you act, you’ll receive an allowance,” a bold Moleko told Public Eye.

“I proposed to the board to establish a forensic audit once and for all to resolve LEC matters to be transparent and reach an end.

“We had to start and even call a press conference; we were informed that the auditor general intends to conduct an audit through an instruction from minister (axed Professor Nqosa) Mahao,” Moleko said.

This was rebutted by former board member Advocate Mary Bosiu in her resignation letter, in which she expressed her frustration with the process of investigations or forensic audits of the company.

“I have (more than once – verbally and in writing) disagreed with the carrying out of this independent investigation/evaluation. My objection is based on the following factors: When we suspended the Members LEC EXCO, the rationale behind it was to enable us to do a forensic audit. Now that the office of the AG (Auditor General) will be carrying out the contemplated audit (and not us), the suspended EXCO Members should be recalled so that we can turn around LEC by addressing and dealing with small and huge concerns contained in the External Auditors Management Letter and a disclaimer contained therein.

“I have, with a heavy heart, also discovered that there are other huge concerns documented in the 2018 forensic investigation that was carried out at a huge cost. As the Board, we need to deal with all these concerns that are staring at us. We do not need a top-notch lawyer to investigate/evaluate them first,” she wrote.

LEC is under intense scrutiny from the PAC following revelations that it purchased a second-hand 4-core electrical cable worth M1.2 million from a QwaQwa-based catering company in South Africa. 
The controversial transaction, conducted through single sourcing on April 1 this year, has sparked concerns over procurement irregularities, lack of oversight, and potential fraud. 
LEC management justified the purchase before the committee, claiming the cable was unavailable on the market for months and urgent needs forced the decision. However, this explanation was contradicted by the now-suspended Head of Finance, ‘Makabelo Matsoso, who told the committee she had rejected the transaction before her suspension in March this year.

PAC chairperson, ‘Machabana Lemphane Letsie, slammed the deal, demanding answers on how a catering company could supply specialized electrical cables when even licensed suppliers couldn’t.