P211 MILLION CHOWED!
One family name dominates in council’s loss of millions
Liquidated Bluthorn Fund Managers, a company closely linked to former Kweneng District Council (KWDC) chairman Jeffery Sibisibi, is P211 million in the red.
The liquidator’s report dated 13th May 2021 and addressed to all creditors and contributories reveals that Bluthorn Fund Managers has liabilities amounting to P211 382 549. As things stand, it will be by sheer luck that the huge sums are recovered and returned to the owners.
The company owes close to 30 organisations and individuals. Among them is over seven district councils, including Ghanzi Council with the highest amount of P40 million, Letlhakeng Sub Council P15 million while Tlokweng Landboard and Southern District Council are owed P10 million.
The P211million debt is against P46 million worth of the company assets. The report states that Blu Thorn Fund Managers collapsed because the company did not adhere to the terms of its licence. The company was licensed to carry out the business of a Collective Investment Undertaking (CIU). However, they instead operated as a deposit taking institution by getting deposits from investors and lending out for interest. This was contrary to the terms of the licence that was issued by the regulator. The breach was picked by the Non-Banking Financial Regulatory Authority after some red flags were picked by the then Blu Thorn Fund Managers auditors.
It was discovered that most transactions of the company were with related companies. “The transactions in these companies were in my view not arm’s length transactions, the same people who were directors and shareholders in the fund management company were also directors in the companies that were being funded.” “The same individuals were also shareholders, ultimately these individuals were the beneficiaries in those companies,” the report says. Another area of weakness is that the related companies funded from Blu Thorn Fund Managers were not servicing the loans advanced to them.
The failure by these internal vendor companies to service their loans was the reason why the company could not pay its investors when their investments matured. All the cash that was advanced to vendors was never paid back, which kept growing the loan book leading to the catastrophic failure of the business, as it was recording losses. The fact that lending was being made to related companies in which directors and shareholders were more or less the same people showed there was lack of proper governance structure at Blu Thorn Company. The liquidator also realised that there are no company financial statements. The company did not keep proper books of accounts as required in terms of section 189 of the Companies Act. Recommendations made are that a forensic audit be conducted to detect possible fraud, embezzlement or any white collar crime. The company records suggest many unaccounted transactions in this company. Moreover, there will be need to examine in court directors and past directors to unravel all the fraudulent transactions that were taking place in the company and other related entities.
In a story carried by The Midweek Sun in October 2020, Sibisibi was accused by KWDC Councillors of using his position and status ( as KWDC Chairman) to benefit a company closely linked to him in a P15 million investment at Letlhakeng Sub District Council (an arm of KWDC).
The investment by Letlhakeng Sub Council to Blu Thorn Fund Managers was made on 17th December 2019.
Sibisibi stepped down from office on the 6th December 2019 with Motlhophi Leo taking over as new chairman.
Blu Thorn was supposed to pay back both the principal amount they were given together with the accumulated interest of over P300 000 by March 2020. That has not happened despite repeated communication between the sub council and the directors of the company.
Records from Companies and Intellectual Property Authority (CIPA) show more than three registered companies that bear names similar to BluThorn Fund Managers.
The said companies all carry the ‘Thorn” footprint. Additionally, in all the said companies, the Sibisibi name has its fingerprints all over the company records as either company shareholders or directors.
CIPA records show that Blu Thorn Fund Managers Company has a large chunk of its 60 percent belonging to another company (Bluthorn Holdings Proprietary Limited), for which Sibisibi has been director since September 2015, until 28 February 2020.
Further probing on the company details revealed that another Sibisibi name, (Kelebogile Sibisibi) suspected to be the daughter to Jeffery, has shares in the same company in which Jeffery was director. According to CIPA, the daughter owns 300 shares while the remaining 700 belong to another company called B Thorn Proprietary Limited. The Midweek Sun has established through CIPA that B Thorn Company is owned by one Eune Engelbrecht of South African origin. He has 60 percent of the company shares while Sibisibi owns 40 percent of its shares.