The parliamentary Public Accounts Committee (PAC) will this week begin probing governance issues and corruption at the Lesotho’s largest pension fund with a view to halting malpractices by the trustees tasked with running it.
This follows the publication of a series of investigative reports by the Lesotho Tribune revealing damning allegations of severely compromised corporate governance practices, unethical behaviour and outright corrupt dealings involving Cadiant and Mergence Lesotho as service providers to the Public Officers’ Defined Contribution Pension Fund (PODCPF) as well as some Trustees of the Fund.
The reports discovered in very clear terms that Cadiant, as the appointed investment consultant of PODCPF over the last six years, was co-founded by Mr Semoli Mokhanoi, who also co-founded and manages Mergence Lesotho, which was appointed and allocated a well-rewarding private equity mandate recommended and overseen by Cadiant.
The series further demonstrated that Mr Semoli and Mr Letsoela (Cadiant’s in-country director) have played this game for a long time, from working for Symmetry Old Mutual, providing the same investment consulting services to PODCPF as early as 2009.
This investigative series put the pieces together and ultimately shows how Mr Semoli has effectively captured the PODCPF, first by exposing that Cadiant Lesotho, Aluwani Fund Managers Lesotho, Akani Financial Services Lesotho, and Fairsure Lesotho all have the same registered office being 10 Molepe Street Hillsview, as per Lesotho Ministry of Trade and Industry information.
The reports dug even deeper to illustrate how this intricate web of purposively positioned companies relate to each other. Cadiant as the investment consultant of PODCPF, recommended the appointment of Aluwani as an asset manager of the same PODCPF.
Unsurprisingly, the latest information on the PODCPF’s website reveals that Aluwani boasts the biggest allocation close to M2 billion in assets from the Fund. The reports further unpacked that Cadiant, which through similar unethical and compromised processes, shortly after being appointed pension consultants at the NUL pension fund, recommended the appointment of Akani as the administrator of the NUL pension fund ahead of long-established and well-capable local administrators such as Metropolitan Lesotho and Alliance insurance. All this was made possible by some Trustees who not only looked the other way but actively enabled this capture to persist this long in return of kickbacks, according to sources close to the matter.
The series fingered one Mr Monaheng Mahlatsi, a Trustee and Chairman of the PODCPF, who is also the Principal Officer of the NUL pension Fund as well as one Mrs Martha Baatijies, a Trustee of PODCPF as key figures that protected and perpetuated this shocking governance practices.
Thanks to the crucial role of true investigative journalism, the center of these bad deeds is finally being shaken. The loss of the investment consulting contract by Cadiant is a promising start.
However, critical questions remain unanswered. First, the Central Bank of Lesotho as the regulator of pension funds and service providers has not said a word concerning these serious allegations and misconduct. Secondly, no word from the Board of Trustees both for the PODCPF and NUL pension fund. These are the people with a fiduciary duty to oversee the monies of the members prudently and ethically. Thirdly, the Secretariat of the PODCPF, a body comprised of knowledgeable professionals entrusted to run and manage the daily operations of the Fund, what role has it played in all these unethical dealings?
The mandate of the Secretariat is to operationalise the decisions of the Board, does the Secretariat on record, have a basic assessment of the quality of these decisions such as a basic conflict of interest? Has the Secretariat on record, ever raised this glaring conflict of interest among PODCPF’s service providers to the Board that occurred for this long?
Here is where the real issues are:
Player & Referee
Mr. Semoli Mokhanoi is the centre of all the rot the Public Officers’ Defined Contribution Pension Fund (PODCPF) as alleged by sources who spoke to Lesotho Tribune.
Cadiant Partners and Mergence Under Scrutiny
The Public Officers’ Defined Contribution Pension Fund (PODCPF), governed by the 2008 Act and managed by appointed trustees, has been embroiled in allegations of corruption and mismanagement. The issues at hand involve Mr. Semoli Mokhanoi, a key figure in the controversy, and his connections with Cadiant Partners and Mergence Investment Managers.
Allegations Against Mr. Mokhanoi and Associated Firms
Conflict of Interest: Since his involvement began in 2011, Mr. Mokhanoi is accused of entrenching himself and his interests within the PODCPF. His dual role with Cadiant Partners and Mergence is under scrutiny for possible conflicts of interest.
Cadiant Partners’ Role: Established in January 2017, Cadiant Partners has been accused of deliberate manipulation of the PODCPF. Trustees claim that Mokhanoi used his influence to ensure that Cadiant and Mergence, which have shared connections, were appointed as consultants and managers respectively, raising concerns about corruption and governance.
