…Names corrupt trustees who have received kickbacks
–Calls for their expulsion from Board of Trustees
–Slates Akani and Mergence’s Semoli Mokhanoi for impropriety
The massive corruption at Lesotho’s M12 billion Pension Fund has been laid bare in a report by the parliamentary Public Accounts Committee (PAC).
Some of the Fund’s trustees, according to the report, have accepted kickbacks from service providers competing for contracts from the Fund.
Some trustees are business associates and friends of the Fund’s Principal Officer, tasked with running its day-to-day affairs, resulting in compromised decision making.
The PAC recommends the expulsion of three compromised trustees from the Fund’s Board of Trustees.
At the centre of the corruption at the Fund is an unscrupulous South African company, AKANI Retirement Fund Administrators, that has been accused of bribing trustees of the Public Officers’ Defined Contribution Pension Fund (PODCPF) in a bid to win service provider contracts.
Monaheng Mahlatsi, Thandy Mabaso, and Mpontšeng Pama-Letsoela are cited by the PAC as the trustees specifically involved in corruption and misconduct at the Fund.
The PAC also calls for a thorough investigation of Semoli Mokhanoi of Mergence Lesotho, one of the service providers. Mr Mokhanoi is accused of possible corruption over his involvement with different service providers who should in fact be independent of each to foster transparency and effective oversight.
AKANI Corruption
“Several trustees were allegedly involved in receiving bribes from service providers competing for contracts with the Fund…,” the PAC report, released in parliament last week, states.
“Monaheng Mahlatsi allegedly accepted gifts from AKANI in exchange for influencing the awarding of an administration services contract….
“Matheakuena Lekhoaba allegedly made irrational decisions in favor of AKANI. While it is unclear whether he received incentives, his actions raised concerns.
“Mr Hoohlo, a former trustee, allegedly accepted bribes from AKANI to help secure an administration contract. Both He and Mr Mahlatsi were involved in taking the Fund to court… (in a bid to assist AKANI)”
The PAC calls for the dismissals of Mr Mahlatsi and Ms Mabaso from the Board of Trustees for corruption. It also calls for the expulsion of Ms Pama-Letsoela for impropriety.
AKANI has been mired in allegations of corruption not only in Lesotho but in South Africa where it administers a fund for local government employees. It obtained the contract via corrupt means, according to reports in News 24, a reputable Johannesburg based digital publication.
Mergence, Cadiant Partners and Semoli Mokhanoi
The PAC report the Fund’s trustees to “urgently initiate an independent and comprehensive investigation into the serious allegations involving Mergence Investment Managers Lesotho and Cadiant Partners Consultants and Actuaries Lesotho (Pty) Ltd, particularly focusing on the role of Mr Semoli (Mokhanoi).
“The investigation should examine the full extent of his involvement with the Public Officers’ Defined Contribution Pension Fund (PODCPF) and the National University of Lesotho Defined Contribution Pension Fund (NULDCPF).
“These measures aim to enhance governance, restore confidence in the Fund’s administration, and ensure that the interests of public officers and pensioners are protected.”
Mr Mokhanoi, the Managing Director of Mergence Lesotho, was accused by the Lesotho Tribune of involvement in wholesale corruption at the Fund and of capturing the trustees of the PODCPF to sway their decisions. His South African headquartered asset management company had thus secured a substantial amount of the Fund’s assets (M1,5 billion) to manage.
The PAC wants Mr Mokhanoi fully probed.
“The Committee also uncovered a serious conflict of interest involving two of the Fund’s key service providers. It was established that Mr. Semoli (Mokhanoi), a director of Mergence Investment Managers Lesotho–the asset manager responsible for overseeing significant investments of the Fund–also holds a directorship in Cadiant Partners Consultants and Actuaries Lesotho (Pty) Ltd, the Fund’s appointed investment consultant.
“This dual involvement raises profound governance and ethical concerns, especially considering that investment consultants are expected to independently advise the Fund on the performance and suitability of asset managers, including Mergence.
“Such overlapping interests contradict the principles of good governance, particularly in the context of fiduciary responsibility, independence, and transparency. The failure to identify and resolve this conflict may have compromised the integrity of advice and investment decisions made on behalf of the Fund.”
As a result, the PAC recommends a full probe of Mr Mokhanoi, whom it mentions by his first name (Semoli).
Vindication of NBC Lesotho
The Lesotho Times had also previously reported extensively on the massive corruption at the PODCPF warning that it risked compromising the benefits of beneficiaries.
The Lesotho Times had uncovered an obvious smear campaign against the Fund’s administrator, NBC Lesotho, which was incorrectly accused of overcharging the Fund. This was all a ruse to try and cover up the real corruption and conflicts of interests that had long plagued the Fund.
The PAC report vindicates our reporting on the matter and effectively clears NBC Lesotho of impropriety.
The trustees involved in smearing NBC – it now seems from the PAC report – had been on the payroll of AKANI. They had instigated the canard that NBC had been overcharging the Fund on services it rendered on the so called “Nil Contributors”. These are pensioners whose accounts are inactive for a variety of reasons including deaths, resignations, or transfers yet they still remain on the database.
The PAC acknowledged that unless NBC was given accurate information by the Fund, there is nothing it can do to clean the database off these inactive accounts. As a result, it will be legitimate for NBC to charge for its services on these accounts as it still manages them. The PAC could not understand why the Fund argued it had no responsibility to pay NBC for its management of these Nil Contributors.
“The Fund’s secretariat (led by Principal Officer) has failed in its duty of ensuring that the Administrator (NBC) and Actuary receive accurate membership data. This failure has led to an ongoing dispute between the Secretariat and the Fund Administrator, NBC, regarding the fees to be charged for non- active members “NIL Contributors”–members whose contributions are inactive but remain on the Fund’s database.
“In order for NBC to conclude the accurate membership status of these members from the system, it has to get instructions from the Secretariat and if such instructions are missing the Administrator is unable to accurately administer such members’ liabilities in respect of the PODCPF’s financial statements,” the PAC states in its total vindication of NBC.
NBC’s own convincing arguments
The PAC fully acknowledged the challenges that NBC faced in managing the Fund due to inaccurate membership data which was provided by the government of Lesotho through the Fund’s secretariat. It said it had been convinced by NBC’s arguments.
It slated the government for failing to comply with its legal obligations to furnish NBC with the relevant monthly data and particulars of members, as required by the Public Officers’ Defined Contribution Fund Act of 2008, Section 19(1).
“Late or missing contributions result in some civil servants appearing as “Nil Contributors,” meaning they are listed in the fund, but their contributions were stopped at some time for reasons that have not been disclosed to the Administrator.
“NBC states convincingly that even though the contributions for Nil Contributors have stopped being paid, it still provides administration services to those members, as their benefits that remain unpaid represent liabilities in the fund’s financial statements that have a direct impact on the financial soundness of the fund and its balance sheet for valuation purposes.
“Government contests that NBC should not be charging fees for that category of members. The amount of money that NBC claims from the fund is around 16 million Maloti. This amount represents the total fees in respect of nil contributors that the fund stopped paying to NBC from March 2019 to date hereof.
“The reasons for the fund to refuse to pay this debt is very unclear as it still accepts that NBC is still providing the services even for those members, however the Fund fails to justify why it would think that such a service can be offered free of charge,” the PAC states in remarks that clearly leaves egg on the Fund’s secretariat.
The PAC report is a full vindication of the Lesotho Times’s previous reports of massive rot at the PODCPF and how NBC was unfairly targeted while the real culprits of corruption were left untouched.
Trustees Pama-Letsoela and Ms Mabaso, who represent local government employees and public service workers respectively, are not even supposed to sit on the Board in the first place, according to the PAC. They owe their places on the Board to rigging of the selection process.
They worked together to “manipulate the selection process and get themselves appointed to the board….” The PAC report states.
More worryingly however, the PAC alleges that Pama-Letsoela and another trustee, Accountant General Likhapha Mahase, are close friends and business associates with close links with the PODCPF Principal Officer, ‘Mamotlohi Mochebelele.
This, according to the PAC, could lead to board decisions and procurement activities favouring companies connected to the trio.
“Ms. Pama-Letsoela and Ms. Mahase are business partners, which creates a compromising situation for the Fund, as their interest could (sic) compromise Board decisions. Evidence provided to the Committee shows that both are members of the Investment Committee of the board and as such they can easily synchronize their votes,” the report states.
“Evidence suggests that Ms. Pama-Letsoela and Ms. Mahase have close personal ties with the Principal Officer that can lead to procurement activities favouring companies linked to these trustees.”
The PAC directs – in the report – that Principal Officer Mochebelele, who is responsible for the day-to-day management of the M12 billion Fund, be investigated for allegedly withholding crucial PODCPF information to the trustees.
The PAC further suggests that Ms Mochebelele’s competence to run a fund of that magnitude be assessed, and that action be taken if malpractice is established against her. This effectively casts doubts on her competency levels.
The damning PAC report on the corruption and mismanagement at the PODCPF and the Specified Officers’ Defined Contribution Pension Fund (SODCPF), were prompted by a 2021 Auditor General’s report, which had raised serious concerns about the funds’ ability to meet future obligations due to underfunding in addition to other ubiquitous reports of corruption and maladministration at the Fund.
The Speaker of the National Assembly, Tlohang Sekhamane, had subsequently asked the PAC for a probe of the Fund.
Corruption
According to the PAC report, Pension Fund representative Mahlatsi allegedly accepted gifts from service provider AKANI in exchange for influencing the award of an administration contract.
Mr Mahlatsi was previously accused by the PAC of taking bribes from AKANI to enable the pension fund administrator to run the National University of Lesotho (NUL) Pension Fund.
The report also accuses trustees Ms Pama-Letsoela and Ms Mahase of being business partners with close ties to the Principal Officer, Ms Mochebelele, leading to procurement decisions favouring their own interests.
The PAC has thus recommended the immediate removal of Ms Mahlatsi, Ms Pama-Letsoela, and Ms Mabaso from the pension fund boards, further directing that their replacements be selected through a transparent and inclusive process to ensure proper public representation.
“Mr Mahlatsi, Ms Pama-Letsoela, and Ms Mabaso should be removed from the Board, and their replacements should be selected through a transparent and inclusive process that ensures proper public officers’ representation, in line with section 9(2) of the Act,” the report reads.
The report also accuses Matheakuena Lethoba, the Director of Remuneration and Benefits in the Public Service, of making “irrational decisions” that favoured AKANI. It is unclear whether Mr Lethoba received any incentives for these actions, but the report states his decisions raised significant concerns.
Furthermore, the report alleges that former trustee, Futho Hoohlo, also accepted bribes from Akani in order to help the company secure an administration contract with the fund.
Both Messrs Hoohlo and Mahlatsi, were in 2019-2020 actively involved in dragging the PODCPF to court to compel it to terminate its contract with its longtime administrator, NBC-Lesotho, in favour of AKANI.
Adding to the controversy, the Principal Officer Ms Mochebelele, has been accused of withholding critical information from the Board, including a crucial Forensic Audit Report, hampering the ability of trustees to make informed decisions.
The report also revealed that some trustees did not receive key feedback from service providers, further undermining their oversight responsibilities. The PAC identified Ms Mochebelele’s office as “the source of these delays and omissions”.
Recommending urgent action, the PAC directed that the Principal Officer must ensure all relevant reports and information are shared with the Board in a timely and comprehensive manner.
The trustees should receive full versions of critical documents, including forensic audits and service provider evaluations, well ahead of decision-making meetings.
The PAC has also recommended that an independent audit be conducted to assess Ms Mochebelele’s performance to restore efficiency, transparency and strengthen governance within the Fund. Action must be taken against her if her performance was found to be deficient.
The PAC further suggests that the Fund engages external, independent evaluators with the necessary expertise to oversee the selection of service providers.
The Fund’s current tender evaluation process should be reformed to eliminate bribery and undue influence.
“Service providers should be selected based on technical merit and value for money, rather than personal interests,” the report notes.
The report recommends that all current procurement activities be put on hold while the Board revisits the procurement policy.
Mochebele rejects the PAC findings
Contacted by the Lesotho Times, Ms Mochebelele said the PAC had been unfair in its findings against her, as it had “never given me a chance to respond to the allegations made against me”.
According to Ms Mochebelele, the PAC would ask members of the Pension Fund Secretariat, including herself and the Head of Legal, Sempe Moshoeshoe, to leave the room while they questioned the other trustees.
The secretariat members would only be called back when the PAC needed them to provide clarifications, after which they were sent out of the room again, she said.
As a result, Ms Mochebelele said she was never part of the actual discussions before the PAC.
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“I wish to place on record that I have taken note of the contents of the Public Accounts Committee (PAC) report tabled this week, and I reiterate my full respect for the constitutional oversight mandate of Parliament,” Ms Mochebelele said.
“However, I must firmly and unequivocally reject the insinuation that I withheld crucial information from the Board of Trustees.”
She described such an assertion as “not only misleading, but deeply regrettable–particularly given that I was never afforded the opportunity to respond to these allegations during the Committee’s deliberations.”
Ms Mochebelele said principles of fairness and natural justice dictate that no individual should be condemned unheard.
“Throughout the PAC process, I have remained cooperative, transparent, and committed to accountability. I stand by the integrity of my actions and reaffirm my readiness to clarify any outstanding matters should I be granted a fair and proper platform to do so,” she said.
Chaiperson of the board unqualified
The Chairperson of the Board, Nthoateng Lebona, the PS for finance, had not been cleared by the Central Bank of Lesotho to lead the Fund. She had failed to submit all the required documents for clearance even though she had been afforded an extended grace period, the PAC noted. As such it was unfit to lead the Fund. It recommended the appointment of an independent chairperson to run the Fund, noting it was a conflict of interest for a PS of finance, tasked with deducting and remitting pensioner instalments to the Fund to be its chairperson as well.
“It is mandatory for all trustees to get a clearance through a fit and proper assessment which is conducted by the Central Bank of Lesotho as the regulator. However, evidence suggests that the Chairperson has failed to submit necessary documents before the deadline, and she has also failed to submit even when the period was extended, however all the other members had complied with this requirement. This non-compliance undermines the Fund’s legality and affects the legitimacy and credibility of the decision- making of the Board,” the PAC stated, while slating the Central Bank for its laxity in performing its regulatory oversight functions over the Board.
Factionalism
The PAC also slammed the factionalism in the Board which had seen trustees fighting to defend their interests.
“These internal divisions–often aligned along personal or interest-based lines–have created a polarized environment that severely undermines the Board’s ability to function as a cohesive governance body.
“Instead of focusing on the fiduciary duty to act in the best interest of Fund members, some Trustees appear to prioritize factional alliances, leading to biased decision-making, resistance to accountability, and delayed or deadlocked resolutions.
“Such division is detrimental to effective governance. It erodes trust among Board members, compromises transparency, and hinders the Fund’s ability to respond decisively to operational or financial challenges. Moreover, when factions dominate the Board’s activities, decisions may no longer be based on objective assessments of professional advice, but rather on alliances and conflicts of interest, exposing the Fund to increased risk and possible regulatory breaches”
Suspend Procurement
The PAC recommends that the Fund suspend all its procurement of contractors or service providers for now to allow for reforms of its procurement policies to eliminate corruption. It recommends the engagement of external, independent evaluators with the necessary expertise to oversee the selection of service providers.
“The current tender evaluation process should be reformed to eliminate bribery and undue influence, ensuring that service providers are selected based on technical merit and value for money rather than personal interests.
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