Professor Nqosa Mahao, minister of energy intends to fire Lesotho Electricity Company’s (LEC) entire board of directors.
Prof Mahao wrote “show cause why” letters to all thirteen (13) board members on Tuesday 27 August 2024, giving them until Friday 30 August to show cause why they can’t be removed from their positions as board members.
Prof Mahao’s letter, which Lesotho Tribune has seen, is centred around the directors neglecting their fiduciary responsibilities. The minister accuses the board of failure to protect the LEC’s interests. Sources with knowledge to this accuse the board chairman and managing director of authorising payment of employees bonuses by over 67%, which amounts to tens of millions of maloti.
Our source went further that Mahao is also worried that the majority of board members are highly incompetent and not up to steer LEC out of rough seas.
“Prof [Mahao] has been swimming against the tide from day 1, until recently when LEC needed bailout due to ‘Muela going offline, the chairman and MD didn’t talk to him…they only engaged with the Principal Secretary (PS),” our source said.
It is also reported that what broke the camel’s back was the incompetence of the board by allowing the chairman and MD to authorise bonuses without the board’s approval.
Those close to Prof. Mahao said he was seething to learn that the board allowed such a cardinal sin.
“Prof. was shocked that the current board allowed the chairman to commit the company without necessary approvals,” said our source.
The source added, “companies act dictate that board members should act in the interest of the company and by failing to appreciate that Eskom, Muela and EDM bulk power debts are addressed, the board members shouldn’t have agreed to the decision made by two people who committed funds towards bonuses.”
LEC owes M700 million to both ‘Muela hydroelectric power plant, Electricidade De Moçambique and Eskom.
Prof. Mahao’s letter noted by paying bonuses when they knew that LEC is almost insolvent was clear sign of incompetence. His letter also notes that it is beyond his imagination that the board found it prudent in their collective wisdom to pay bonuses when LEC is looking to raise M348 million for bulk power purchases, when ’Muela Hydroelectric station goes down for major maintenance from October 2024 to March 2025.
However in their effort to frustrate Prof. Mahao seven out of thirteen board members approached the high court on Wednesday 28 August asking the court to interdict Prof. Mahao pending the finalisation of the court proceedings. The case will be heard tomorrow (Monday 2 August).
Efforts to get comment from board chairman and MD were unsuccessful.
