By ‘Majirata Latela
Acting Auditor General, Monica Besetsa has raised concern over the monitoring of dividends that are received by government. This after she found out that dividends for the year 2019/20 were less by M151-million compared to the year 2018/19.
The 2020 Auditor-General report shows that dividends received represent cash received by Government during the year under review on dividends declared by the enterprises for the previous years’ performance.
The report explains that dividends received during financial year 2019/20 amounted to M171 Million, which was less by M151 Million as compared to the previous year’s figure of M322 Million.
It reveals that out of 15 trading entities, only three entities paid dividends during the year under review and five entities paid in the previous year 2018/19.
From Letšeng Diamonds Mine where the government has 30 percent shares, the state received M210 million dividends for the year 2018/19 but there were no dividends collected for 2019/20.
From Central Bank of Lesotho which is 100 percent owned by government, M142, 177, 000 shares were received by government in the year 2019/20 while in the year 2018/19, M84, 396, 000 dividends were received.
From Standard Lesotho Bank where the government owns 9.6 percent shares, in the year 2019/20 the government received M24, 125, 000 while in 2018/19, M24, 125, 000 dividends were received.
At AON Insurance where government owns five percent shares and the National Insurance General Group with 20 percent ownership by government, dividends received for the year 2019/20 amounted to M395, 854 and M3, 000, 000 respectfully.
From the Maluti Mountain Brewery where the government has a shareholding of 4.75 percent it received M4,972,245 for the year 2019/20.
Government did not collect any dividends from Kao Mining where the government has 25 percent shares, Liqhobong Mining Development with 25 percent shares, Lemphane Diamonds with 26.50 percent shares and Gem Stone (Show Ridge) with 25 percent shares.
Also from Reskol Diamond Mine with 10 percent shares, Avani International with 36.40 percent shares, Loti Brick with 22.8 percent shares, National Life Insurance with 12 percent shares, Econet Lesotho 30 percent shares, Lesotho Flour Mills with 49 percent the government did not collect any dividends.
In May 2019, theReporter ran a story where a member of the Public Accounts Committee (PAC), Matšepo Ramakoae said the authorities have adopted a hard-line stance against government co-owned companies that fail to pay dividends and others that evade tax.
This after the PAC exposed massive graft not only in many government departments but also private companies in which the Lesotho government holds shares.
“We normally invite company managers and principal secretaries of government ministries to explain to us why certain amounts of money were used on unintended purposes; or why there was lack of spending where the money was needed.
“After making our findings we recommend that action be taken against perpetrators or anyone suspected of wrong doing. Cases had been opened and companies that had not paid government dividends have promised to pay back the money,” Ramakoae said.
She revealed that one of the defaulting companies, telecommunications giant Econet Telecom Lesotho, had so far already paid M2.5 million of the dividends that were owed to the government.
Ramakoae observed that the companies seemed to be relaxed for many years as no one ever asked them about paying taxes and dividends to the government. She said most companies took money overseas where it was banked in offshore accounts adding in that way the money did not go into public coffers.
PAC has been an eye opener to the members of the National Assembly as well as the public, so much that the Directorate on Corruption and Economic Offences (DCEO) has taken interest in some cases, whereby it has already started investigating the cases and prosecuting others.
“Some of the cases that were discussed by PAC in the parliament were already being investigated by us while others were new. We are happy that that PAC had done a good job in unravelling the corrupt practices so that people can see how it affects the economy of the country. Corruption is everywhere, in the private sector and the public sector alike,” the DCEO spokesperson, Matlhokomelo Senoko said.
In its report for the years 2013-2016, PAC indicated that there was no clear and proper follow up system on payments of royalties as those amounting to M27 billion was not paid in the year 2009.
This was blamed on the commissioner of mines who is the one responsible to make follow up and ensure that mining companies pay royalties. The committee said it was not surprised to discover that there was no proper reconciliation between the office of the commissioner of mines and the ministry of finance regarding the payment of royalties.
The committee further revealed that even though Mines and Minerals Act 2005, stipulates that royalties should be charged at 10 percent, the ministry has been collecting between four and eight percent between 2009- 2012. That resulted in an underpayment of M120 billion loss of revenue for the government of Lesotho.
It was indicated that Kao Mine paid only six percent, Letšeng eight percent, Liqhobong four percent, Mothae Mine five percent, Kolo (Reskol) four percent, Pae- la- Itlhatsoa (Gemstone) five percent and Lemphane 10 percent.
