MASERU-The Public Accounts committee (PAC) is probing the missing M175 million owed to the government by Lucapa Diamonds for its purchase of Mothae Diamond mine in 2017.
Although the Ministry of Natural Resources says thecompany had paid the government, Deputy Accountant General ‘Mabakubung Pitso is a persistent that there was no such payment which reflected in the government’s accounts.
This matter was discovered during PAC session on Monday, where the Ministry of Natural Resources was asked about queries raised in the Auditor General’s Report for the year ending March 31, 2022.
Auditor General, ‘Mathabo Makenete, noted in her report that M175 million was due by Lucapa from their 2017 acquisition of Mothae. The PAC then called the Ministry of Natural Resources to spell out the status of the M175 million before Lucapa Diamonds exits the country.
The ministry claimed the money had been paid by Lucapa, but they had failed to report it. Accountant General’s office however denied the existence of any proof of payment. Lucapa worked in the Butha-Buthe mine from 2017, monitoring 70 percent prize, while the government owned the remaining 30 percent share. This was until last month when Lucapa publicized its deal with Lephema Executive Transport to take over its 70 percent stake.
Principal Secretary of Natural Resources, Relebohile Lebeta, clarified that the government had agreed to Lucapa’s acquisition of Mothae Diamond Mine on 27 January 2017. The agreement specified that Lucapa would acquire the mine for USD$9 million and M175 million to be paid in installments.
“As per contract the sale of Mothae amounted to USD$9 million. The first payment was to be USD$400,000, then second pay USD$ 4.1 million, and the remaining USD$4.5 million was to be paid in eight installments ofUSD$562,000 each,” Lebeta said.
She described the payment history, stating that the total of USD$9 million was paid by August 2021.
Lebeta said the opening payment of USD$400,000 wasmade on the 13th of March 2017, USD$4.1 million was paid as the second payment on the 6th of September 2017. “Third payment of USD$562,500 was made onthe 20th of July 2018. On the 30th August 2018 there was another payment of USD$562,500, and on the 27th of May 2019 there was a payment of USD$562,500.
On the 28th of May 2019 there was another payment of USD$562,500. On the 1st of July 2019 there was apayment of USD$562,500, on the 2nd of August 2019, the same amount was paid. “On 13th of August 2021, two payments were made, which totaled to USD$1.1025 million and the total was USD$9 million as per agreement,” she said.
Regardless of these payments, she said Lucapa was still finalizing its departure. Nonetheless, ‘Mafani Masoabi from the Auditor General office, said there was no such. She said there was no proof for the payments. She emphasized the need of supporting evidence for all financial trades reported to the accountant General. “When financial statements are given in to the Accountant General for consolidation, they must includeevidence of how national finances were used. This submission did not have such evidence, leading to the present confusion,” Masoabi stated.
“The government resources are controlled bydocuments. Even the last cent is supposed to be reported.
Additionally, Pitso continued that the claimed payments by Lucapa did not reflect in the government’s accounts. She explained that in the 2021-2022 financial year, the ministry’s submission lacked details on receivables, unlike in the prior years.
Accountant in the Ministry of Natural Resources, Sebueng Tlabanyane, acknowledged the failure to report the payments correctly but maintained that the money had been paid. She admitted the omission in not attaching receipts to financial statements. “We did not report that the money was presented, we had previously reported in 2021 that it was a receivable. As Ministry of Mining, in our submissions we did not explain that the money we received is the one we had been expecting and we did not report that it had been paid. We only removed it from the receivables. It was not reportedproperly,” Tlabanyane said.
Chairperson of PAC, ‘Machabana Lemphane-Letsie asked Pitso to make clear whether Lucapa still owed the government. Pitso confirmed that no documents had been received from the ministry to show payment by Lucapa. “When money comes in, it will be seen then the statements are given to ministries to capture it. They are the ones who bring documents to us. But we have never seen any Lucapa documents, they have not given them to us,” she said.
Machesetsa Mofomobe, Basotho National Party leader, inquired whether there was any unaccounted-for money in government accounts. Pitso acknowledged that theremight be unidentified funds, suggesting possibleinconsistencies in financial recordings. Lemphane-Letsie concluded that the committee remains skeptical about the payment issue. Until the required documents proving Lucapa’s payment were provided, she said the mining company was owing the government M175 million. “It seems like there is no answer to this issue. It is important that we have an answer on this matter. Advise is that the ministry and Accountant General should meet to clear this issue and give the Auditor General a response that will come to PAC.
“Up to now, what remains is that Lucapa owes the government of Lesotho M175 million for the acquisitionof the diamond mine,” said Lemphane-Letsie.
The meeting was postponed to next week Mondaymorning for further investigation.
