MASERU — MKM Burial Society is struggling to bury its members due to a crippling financial crisis, the Lesotho Times can reveal.
Some members who claimed they had been paying premiums for years said they have failed to give their late relatives a decent send off due to the cash squeeze.
They claimed they had been given very little amounts of money instead of what they had been promised when they joined the scheme.
Tlotliso Mpholo, a teacher at Sechaba High School in Kolonyama, said his father Teele Mpholo died on August 17 this year.
He said a policy taken by the deceased indicated that MKM would pay out M40 000 upon death but the company paid just M2 500 “which could not even buy a coffin”.
Mpholo claimed his late father had paid monthly premiums of M185 per month for 10 years.
He claimed MKM had given his father a certificate indicating the burial scheme would pay him
M40 000 to cover his funeral expenses.“I was shocked when the clerks at MKM paid us a paltry M2 500 for my father’s funeral,” Mpholo said.
“They told us that we would collect the balance after three months. They could not answer how we were going to bury the deceased without that money,” he said.
Mpholo said he was further startled when one of the clerks tried to sell him a tombstone with the balance of his father’s money despite that he was entitled to it as a member of the burial scheme.
“When I walked out of the MKM offices complaining I found other victims outside who were also grumbling that they were given too little money to bury their dead.”
MKM boss Simon Thebe-ea-khale yesterday confirmed that members were no longer getting their full monies when they claim for their deceased family members.
“It is not easy to understand this arrangement,” Thebe-ea-Khale said.
“The arrangement is that you will be given a cow for slaughter during the funeral, a coffin, a tombstone and some money.
“After that you will be paid compensation money,” he said.
A source working at the burial society said many MKM members had been sent away on promises that they would get their balances later.
“We do not know what exactly is happening but the official explanation from the director (Simon) Thebe-ea-khale is that members are to be paid in installments until all monies due to them are paid,” the source said.
MKM is Lesotho’s biggest burial society. It buries about 70 bodies every week.
The burial society’s problems started in November 2007 when the Central Bank of Lesotho (CBL) launched investigations into its investment companies.
The bank later closed the firms on suspicion that they were operating illegal banking and insurance businesses.
Both the High Court and Court of Appeal held that MKM was operating banking and insurance businesses illegally.
The Lesotho Times understands that the MKM Burial Society had invested contributions from its members in these companies trading under the Star Lion Gold Coin Investment, which is now battling liquidation in the Court of Appeal.
MKM members’ contributions were used to buy assets for Star Lion Gold Coin Investment.
In fact when it comes to assets there is really no distinction between Star Lion Gold Coin Investment and MKM Burial Society itself.
The burial society is therefore worth nothing without Star Lion Gold Coin Investment.
So, when High Court judge Justice John Musi ordered that MKM group of companies be dissolved on May 18, the burial society became vulnerable.
Investigations by this paper have revealed that nearly 90 percent of the properties owned by the MKM group are in Star Lion Gold Coin’s books.
These assets include MKM’s largest mortuary in the Maseru West Industrial Area as well as five other morgues in Mafeteng, Qacha’s Nek, Teyateyanang, Mohale’s Hoek and Maputsoe.
The Agric Buildings in Mokhotlong, Leribe and Mohale’s Hoek are also on Star Lion Gold Coin Investment’s balance sheet.
The company also has more than 60 commercial and residential properties scattered across the country.
The burial society, as an entity, does not own a single building.
The Agric Building in Maseru which now houses First National Bank is owned by Star Lion Group, another of the companies under liquidation.
The unoccupied building along Pope John Paul II Street is owned by Star Lion Insurance which is also being liquidated.