Lesotho: Parliamentary Committee Reveals Corruption at M12 Billion Pension Fund

Corruption Exposed in Lesotho's Pension Fund

A report by the Public Accounts Committee (PAC) reveals corruption in Lesotho's M12 billion Pension Fund. Some trustees accepted kickbacks from service providers competing for contracts. This has compromised decision-making within the Fund.

The PAC recommends expelling three trustees from the Board of Trustees. Akani and Semoli Mokhanoi of Mergence are specifically cited for impropriety. The report highlights a South African company, AKANI Retirement Fund Administrators, accused of bribing trustees to win contracts.

Trustees Involved in Corruption

Monaheng Mahlatsi, Thandy Mabaso, and Mpontšeng Pama-Letsoela are named as corrupt trustees. The PAC calls for an investigation into Semoli Mokhanoi of Mergence Lesotho. He is suspected of corruption due to his ties with various service providers.

The PAC report states that several trustees received bribes from competing service providers. It claims Mahlatsi accepted gifts from AKANI to influence contract awards.

Concerns Over Decision-Making

Matheakuena Lekhoaba allegedly made decisions favoring AKANI without clear incentives. Former trustee Futho Hoohlo also reportedly accepted bribes from AKANI to secure contracts.

The PAC urges the removal of Mahlatsi and Mabaso for corruption and Pama-Letsoela for impropriety. AKANI faces similar allegations in South Africa regarding its fund management practices.

Investigation Recommendations

The PAC calls for an independent investigation into Mergence Investment Managers and Cadiant Partners Consultants. It aims to assess Mokhanoi's involvement with pension funds effectively.

This investigation seeks to enhance governance and restore confidence in the Fund’s administration. The goal is to protect public officers' interests and pensioners' benefits.

Vindication of NBC Lesotho

Previous reports by the Lesotho Times highlighted corruption at the PODCPF, warning it could harm beneficiaries' interests. The PAC report clears NBC Lesotho of wrongdoing amid smear campaigns against it.

Trustees who smeared NBC were allegedly linked to AKANI, attempting to cover up real issues within the Fund. The PAC acknowledges that NBC cannot manage inactive accounts without accurate data from the Fund's secretariat.

Failures in Data Management

The PAC criticizes the secretariat led by Principal Officer 'Mamotlohi Mochebelele for failing to provide accurate membership data. This has caused disputes over fees charged by NBC for managing inactive members’ accounts.

NBC argues it must charge fees because it continues providing services despite halted contributions. The government contests this claim but fails to justify why services should be free when they are still rendered.

Calls for Accountability

The PAC emphasizes that all relevant reports must be shared with trustees promptly. It recommends assessing Mochebelele’s performance and taking action if malpractice is found.

An independent audit should evaluate her effectiveness in managing the Fund’s operations transparently and efficiently. Additionally, external evaluators should oversee service provider selections moving forward.

Response from Principal Officer

Mochebelele disputes the PAC findings, claiming she was not given a chance to respond during investigations. She insists she acted transparently throughout the process and rejects allegations of withholding information from trustees.

She emphasizes fairness and natural justice principles, stating no one should be condemned unheard during such inquiries.

Issues with Board Leadership

The Chairperson Nthoateng Lebona lacks clearance from the Central Bank of Lesotho due to missing documents required for her position. The PAC suggests appointing an independent chairperson instead, citing conflicts of interest related to her role as PS for finance.

Lebona’s non-compliance undermines the legitimacy of Board decisions according to regulatory standards set by the Central Bank.

Factionalism Within Board

The PAC criticizes factionalism among board members that hampers effective governance. Internal divisions prioritize personal interests over fiduciary duties toward fund members, leading to biased decision-making processes.

Such divisions erode trust among board members and hinder timely responses to operational challenges facing the Fund.

Suspension of Procurement Activities Recommended

To combat corruption, all procurement activities should be suspended until reforms are implemented within procurement policies.
External evaluators with expertise must oversee future selections based on merit rather than personal connections or interests.