MKM case needs decisive action

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THE MKM saga has rumbled on for a long time with no solution in sight for the 400 000 plus mostly impoverished citizens who were fleeced of their hard earned cash in this Ponzi style scheme.

Five judges of the High Court have so far refused to hear the MKM liquidation case offering all manner of excuses and plunging the country into a mini-judicial crisis.

As this saga has raged on, one thing has become crystal clear: there is no political will on the part of those in authority to bring closure to this issue and to ensure that obvious criminal transgressions are punished.

It appears there are just too many vested interests hampering swift closure of this debacle.

The MKM saga ranks among the most deplorable Pyramid schemes ever perpetrated on an unsuspecting population in Africa.

It takes its pride of place alongside South Africa’s Barry Tannenbaum and Fidentia Ponzi schemes.

The only difference is that these schemes largely bled South Africa’s rich elites, particularly the Tannenbaum scheme.

While the poor lost in the Fidentia saga, South Africa is rich enough to institute any compensatory measures.

While the South African authorities have left no stone unturned to ensure that the crooks and fraudsters involved in these two schemes are brought to book, Lesotho has remained lethargic in dispensing justice on behalf of its impoverished victims.

When 400 000 plus mostly poor people lose their money in an obvious Pyramid scheme which promised unrealistic returns to unsuspecting depositors, concerned authorities should naturally spring to action and seek justice for the victims.

But alas, the lethargy on the part of officialdom in dealing with this matter has been quite shocking.

We should hang our heads in shame over the manner in which this saga has been handled.

As reported elsewhere in this newspaper, sharp differences have emerged between the cabinet and the Central Bank of Lesotho over how to proceed with this matter.

Cabinet prefers to have the MKM saga resolved without a formal liquidation process while the central bank wants the liquidation route.

While central bank officials deserve censure for having cocooned themselves in their slumber for a long time while MKM’s fat sharks carried on with their illegal activities, we cannot help but agree with them that the liquidation route is the best. The liquidation route does not guarantee that every one of MKM’s victims will be paid.

It’s nevertheless the internationally acceptable practice of resolving insolvency disputes.

PriceWaterhouseCoopers, the reputable international auditing conglomerate, hired by the central bank to assess the solvency status of MKM, has already issued a report which vastly conflicts with MKM’s own claims.

For cabinet to try and rely on MKM’s own self-serving liability report in seeking a way forward is quite shocking.

The solvency or otherwise of MKM should be determined in an appropriate liquidation forum.

MKM’s own outlandish claims, about its solvency should be tested in an appropriate court of law.

While many depositors will inevitably lose out in the process, the liquidation process conducted in an open court forum remains the most appropriate and fair way to bring closure to this case.

If most of our judges feel compromised to tackle this case, a foreign judge must be appointed temporarily to specifically deal with this matter.

The central bank also argues, and quite rightly so, that the directors of MKM and Millennium Goal Society should face criminal charges over all their alleged transgressions in this matter.

The bank is 100 percent correct more so because the directors of these two companies ran banking and insurance businesses without licences.

The bank has already written to the Directorate for Corruption and Economic Offences to “institute criminal action as may be appropriate”.

If the present government is to be taken seriously by its own citizens then criminal prosecution of any suspected crooks in this long running saga must be done immediately.

Doing nothing in a case in which about a quarter of the entire population were defrauded of their hard earned cash will only entrench the growing perception that the LCD government pays lip service to fighting endemic corruption.

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