CBD’s big fallout: How Letlole’s acting CEO ousted the board (Part 1)
Just before a masterplan unfolded, the 'old' directors, out of touch and despite their lofty positions, blissfully oblivious to how the corporate world operates, clearly had no idea what was going on until their heads were rolling on the floor. Staff Writer KITSO DICKSON reports
After Letlole La Rona announced a decision to fire its then CEO, Chikuni Shenjere-Mutiswa, on 18 September last year over allegations of misconduct, there was a palpable sense of cautious relief within the ranks of the board. This was particularly the directors who had signed off the controversial Long Term Incentive Plan (LTIP) the previous December. Perhaps they had thought he was now out of the way and life could return to normal after a saga created by their bibliophobia.
Unbeknownst to them, as they sipped celebratory wine and fine liquors at the company's well stocked bar, the skies above were darkening; the chickens coming home to roost. One morning, having received email notification of his firing, Mutiswa was at the Department of Labour offices at Block 8 in Gaborone, moving decisively and filing a claim for unfair dismissal.
The ink had barely dried on the board resolution to terminate his contract, citing the announcement that he was ‘guilty’ of all charges. The serving of the Labour notice punctured the celebratory mood at the property company, inspiring terror at Letlole's office. Amidst this, a hyperventilating Kamogelo Mowaneng, the current acting CEO, initially refused to hold the fort, calling board members in a blind panic before being gradually calmed down and eventually accepting service.
Mutiswa also moved ahead with his P15 million LTIP claim. He opened up a new front, preparing to file his own criminal charge against Oteng Keabetswe, Botswana Development Corporation’s (BDC) representative on the Letlole board, whom he charged with making a false police report regarding the fraud allegation that the board had hastily concocted as it sought all manner of leverage against the CEO. Keabetswe was the one who went to the police to file a report with the long arm of the law.
The police, who labelled them “maragaraga,” quickly dismissed the allegations. They saw them as an amateurish attempt by directors scurrying for cover and seeking to unsettle Mutiswa in their battle. They dismissed it as a transparent but legally untenable attempt to use Botswana's criminal justice system to settle a bonus dispute. While interviewing Mutiswa, they repeatedly questioned why a listed company like Letlole, with access to the best legal advice that money could buy, would attempt to bring what was clearly a civil dispute to the Botswana Police Service and make an elaborate public song and dance about it all, unless it was purely for PR reasons and to pressurise the ex-CEO to back down.
With the police brushing aside Letlole's complaint, the plot calculated to frame the ex-CEO, commencing with having him thrown behind bars on spurious charges, hadn't managed to survive its first contact with reality. There was previously a suggestion that he issued a threat to kill to Mowaneng and other directors. However, the matter was not taken far.
These directors had no inkling that they had just waltzed into a trap reportedly set by Mowaneng and Dinah Jonah, the company’s executive assistant. Firstly, the relevant clause in Letlole's constitution requires that a third of the directors come up for re-election every year. At that time, the company had seven directors - Mowaneng and Jonah cynically rounded up 'third' to mean three, rather than two directors. Then Mowaneng alerted the BDC and Grit representatives that three directors were seeking to remain on the board.
The usually lethargic Oteng Keabetswe roused himself and immediately sprang into action, calling a special board where he, acting in concert with the Grit CEO, Bronwyn Knight, informed board chair Boitumelo Mogopa, Terence Dambe and Serty Leburu, in blunt terms that BDC and Grit (who together held 70 percent of the voting shares in Letlole), would vote against their re-election at the upcoming AGM, given their part in the LTIP debacle.
Keabetswe, under pressure from an impending criminal charge against him from the ex-CEO and badly wounded from the revelation that another director, Tiny Kgatlwane, had mocked him as being "immature," "undercooked" and "firmly tucked in her (Kgatlwane's) handbag," relished this opportunity to exact revenge and went straight for the directors' exposed jugular. Keabetswe also took great pleasure in decapitating Kgatlwane as a service to his boss, the Chief Investment Officer of BDC, Moatlhodi Lekaukau. Keabetswe had gotten wind that Kgatlwane had mocked Lekaukau, the consummate urbane "professional" for what she reportedly termed "running Standard Chartered Botswana into the ground" when he was CEO of the bank.
Therefore, it was with much relish that he dropped the full force of BDC and Grit's shareholding down on Kgatlwane's head like a piano, demanding that she too step down. At this point, it must be worth noting that from the time BDC made the decision to enter into an 'asset swap' with Grit, becoming 'strategic partners,' the intention had always been to change the existing board but to do it gradually. The LTIP saga thus provided a gift-wrapped godsend to spectacularly bring forward the execution of this master plan. The 'old' directors, out of touch and despite their lofty positions, blissfully oblivious to how the corporate world operates, clearly had no idea what was going on until their heads were rolling on the floor. However, having got rid of the CEO, the board somehow felt some sense of security. Complacent even, settling comfortably into their old familiar routine. This ignorance was to prove naive and, ultimately, fatal to their collective reputations.
In October last year, after Mutiswa's dismissal, Mogopa called Mowaneng, the acting-CEO, making detailed enquiries into how a Letlole board chairperson was selected and removed. Mowaneng told her that it was the board which selected its chair. From this interaction, it would appear that while Mogopa was slightly concerned about her position as chairperson, she felt cosy enough in her tenure as a director. Infact, all the 'old' directors felt very snug and welded to their seats.
During the following month as Mowaneng prepared the agenda for the company's AGM scheduled for December, she informed Mogopa, the deputy chairperson Dambe and Leburu that according to clause 20.9.1 of the company's constitution, they were due for rotation and asked them, individually, whether they wished to stand for re-election. All three heartily agreed - the company paid very lucrative board sitting fees, which averaged approximately P400 000 per director per annum - a king's ransom for what was effectively a couple of hours of work per year.
All this was before the weekend sumptuous 'strategic retreats' at high-end foreign resorts and high maintenance feting, something which would be familiar to most executive management teams who had to report and deal with delinquent boards such as Letlole's. All this was before the conflicted business opportunities arising from board appointments - the one which eventually entangled Dambe, the Managing Partner of top law firm, Minchin & Kelly, was one such particularly egregious example.
It is worth recalling that astronomical board fees had caused a low-level revolt from heavyweight institutional shareholders which had provided the company with a detailed analysis, using various market comparatives, showing that Letlole was paying its board at least five times what its peers were paying. (Read Part 2 https://businessweekly.co.bw/free-edition/cbds-big-fallout-how-letloles-acting-ceo-ousted-the-board-part-2)