Who Is Involved, What Happened, What Is Proven And What Comes Next
A forensic investigation into Sekhametsi Investment Consortium (SMIC) has laid bare a series of governance, procurement, and investment control failures that raise serious questions about how decisions were made and money was committed.
For readers encountering this story for the first time, here is what you need to know.
Who is SMIC?
Sekhametsi Investment Consortium (SMIC) is an investment vehicle linked to the Sekhametsi group structure. It holds interests in various ventures, including property development and enterprise investments. Its board of directors is responsible for approving major expenditures, investments, and contracts.
At the centre of this report are board decisions, or the absence of them.
Who are the other key entities?
LNDC
The Lesotho National Development Corporation (LNDC) is a government-owned development agency that promotes investment in Lesotho.
The report examines a pledge made by SMIC to LNDC for participation in the Dubai Expo.
VDI
Vodacom Digital Investments (VDI) was a proposed investment target in which SMIC acquired a minority shareholding (2.5%). The deal required substantial capital commitments from SMIC.
The forensic report scrutinises how this investment was approved and whether due diligence was properly conducted.
PS: be on the lookout in the coming week(s) about VDI, Mergence Lesotho and Public Officers Defined Contribution Pension Fund…
Creative Lab
Creative Lab is a private company reportedly contracted in connection with Dubai Expo activities and branding-related work.
The report questions how payments to this company were approved and whether procurement rules were followed.
Sekhametsi Place
Sekhametsi Place refers to a property refurbishment project undertaken within the SMIC structure. The forensic review compared contracted amounts to actual invoices paid during this project.
What the Report Alleges
The report does not accuse individuals of criminal conduct outright. Instead, it alleges serious governance failures.
These include:
• Expenditure committed without documented board approval
• Incomplete or weak due diligence on large investments
• Procurement decisions made without competitive processes
• Potential conflicts of interest in valuation and advisory roles
• Invoicing that exceeded contract values without proper documentation
• Missing or damaged digital governance records
These are structural failures. They concern how decisions were made, not just what decisions were made.
What the Report Clearly Establishes
There are several matters the report documents with supporting evidence.
1. The LNDC Dubai Expo Pledge
SMIC pledged $12,000 (approximately M180,000) to LNDC in connection with Dubai Expo participation.
The forensic review states there was no documented board resolution authorising this pledge. The payment was processed, but it was not properly classified in the financial statements as a donation.
This establishes two things:
• A governance approval gap
• A financial reporting classification issue
2. Creative Lab Payment
A payment of approximately M315,682 was made to Creative Lab.
The report notes that it was unable to verify the full procurement trail, including board minutes approving the amount and confirmation of competitive quotations.
The issue here is not necessarily that the service was unnecessary, but that the authorisation and procurement documentation were incomplete.
3. The VDI Investment
SMIC committed to acquiring a 2.5% stake in VDI.
The forensic report states:
• The offer letter was signed before funding of approximately M145 million had been secured.
• Comprehensive due diligence documentation was not provided.
• The promoter and the valuer of the transaction shared overlapping connections, creating potential conflict-of-interest concerns.
• Shareholding documentation, including share certificates and Companies Act reporting, was not fully evidenced.
The report does not declare the investment fraudulent. It concludes that governance procedures surrounding it were weak.
4. Sekhametsi Place Refurbishment
The report compares contract values under PROCSA agreements to invoices paid.
It identifies a significant variance, with invoiced amounts exceeding contracted values by over M14 million, and notes that no documented variation orders were provided to justify the increase.
This finding is significant because variation orders are standard in construction projects. If costs legitimately increase, formal written amendments are required.
Without those, oversight weakens.
5. Damaged Digital Records
A hard drive containing governance records was found to be damaged, limiting recovery to a small amount of data.
This materially affected the investigators’ ability to verify board minutes and historical decisions.
What the Report Cannot Prove
Because of incomplete documentation and damaged records, the report cannot definitively prove:
• That cost overruns were fraudulent rather than poorly documented
• That valuation concerns resulted in inflated pricing
• That signatories acted with malicious intent
• That shareholders suffered quantifiable financial loss in every questioned transaction
The report highlights red flags. It does not deliver criminal verdicts.
That distinction matters legally and institutionally.
What the Report Recommends
The report recommends that SMIC consider:
• Assessing potential liability of former directors under the Companies Act
• Conducting further engagement with project managers and signatories to account for refurbishment costs
• Reviewing compliance failures related to share issuance and reporting
These are not automatic legal actions. They are recommendations for consideration.
The Bigger Picture
This forensic review paints a picture of an organisation where:
• Board authority may not have been consistently documented
• Procurement discipline weakened
• Investment due diligence processes were not robust
• Record keeping systems were fragile
None of these failures alone guarantee corruption. But collectively, they create vulnerability.
Governance does not collapse in one dramatic moment. It erodes through exceptions that become habits.
What Happens Next?
SMIC faces three strategic choices:
1. Pursue recovery or liability actions where financial loss can be quantified
2. Implement deep governance reforms, including strict board resolution protocols and digital record preservation
3. Treat the report as factional ammunition and move on
Only one of those options strengthens the institution.
For shareholders and stakeholders, the key issue is not whether the report is uncomfortable. It is whether SMIC uses it as a corrective blueprint.
Because in corporate governance, documentation is not bureaucracy.
It is protection.
Read full report here
