Prof. Nqosa Mahao, the Minister of Energy, delivered a startling statement in parliament this week, expressing deep concerns about corruption within the Lesotho Electricity Company (LEC). He candidly addressed parliament and the nation, shedding light on the state of the state-owned power company.”Unless LEC is restructured, the state company is in trouble,” Prof. Mahao emphasized.
He proposed conducting a forensic audit and initiating a comprehensive restructuring plan. These proposals stem from the findings of a 2018 forensic report that revealed the precarious state of affairs at LEC, including instances of corruption such as staff members engaging in business transactions with the company.
Highlighting the urgent need for restructuring at LEC, Prof. Mahao emphasized that without intervention, the company is at risk. He proposed conducting a forensic audit and initiating a comprehensive restructuring plan. These proposals stem from the findings of a 2018 forensic report that revealed the precarious state of affairs at LEC, including instances of corruption such as staff members engaging in business transactions with the company.
In a further revelation, Prof. Mahao disclosed that LEC has identified over 500 fictitious accounts, leading to substantial financial losses. He informed Members of Parliament that LEC is burdened with a significant debt estimated at close to half a billion Maluti. Addressing the severity of the situation, he stressed the need for immediate and drastic measures to prevent LEC from collapsing, noting its critical role in the country’s economic growth.During his briefing, Prof. Mahao expressed concerns raised by LEC staff regarding poor corporate governance. He mentioned complaints about conflicts of interest in procurement processes, lack of transparency, inflated tenders, insider trading, and clients making payments directly to staff members.
Additionally, he highlighted LEC’s outstanding debts to power generators like ESKOM and Ha Ramarothole, as well as issues with revenue collection.The Minister noted that the Auditor General’s financial audit report echoed these concerns. To address these challenges, he announced plans for a forensic audit, with the Ministry of Energy collaborating with the Ministry of Finance and Development Planning to cover the costs. Negotiations between the relevant authorities have been finalized, and the forensic audit is set to commence soon. This audit will provide crucial insights for government interventions aimed at restructuring LEC and ensuring proper control within the organization.
