Africa-Press – Botswana. A Corporate Lawyer has weighed into the Letshego Holdings Limited ‘s (LHL’s), possible take-over by Botswana Civil Service and pushed the blame on the door-steps of The Government Enclave.
“The most unfortunate thing about Botswana is that we do not have the Mergers and Acquisitions’ Law. We operate on Rules, and Rules are not laws,’ Sipho Ziga, a partner at Armstrongs Attorneys said.
“What we need to do is to come up with laws which are incorporated in the Companies Act. They must be effective and enforceable in law like in South Africa,” he added.
The Botswana Public Officers Fund (BPOPF) reached 35.3 percent shareholding in Letshego 13 months, and the Botswana Stock Exchange Limited’s ( BSEL’s ) Rule says issues concerning Mergers and Acquisitions – meaning 35 percent stake if you buy up — made reference to the South African legislation since Botswana has not yet established its own.“ Until the Botswana Mergers and Acquisitions Code is in place, the Mergers and Acquisitions Rules refer to the relevant parts of the South African Companies Act No.71 of 2008 and 2011, “ BSE Rules states.
Among other things, that specific pieces of South African legislation impose strict conditions and makes takeover mandatory once you acquire 35 percent. It also imposes strict timetables on transactions. Within one business day after the date of acquisition of at least 35 percent of the target’s shares, the person or entity that has acquired must give notice to the remaining shareholders of the target, making an offer to acquire any and all of the target remaining shares ( section 123 (3), Companies Act).
Given this scenario, the BPOPF should have given the reset of shareholders an offer- especially the minorities to exercise their rights.
“The rule is meant to protect the rights of the minorities,” one analyst said.
Andile Nikani, an executive director at South African’s Take-over Regulatory Panel (TRP),said : “As you know, the South African regulator does not have jurisdiction in Botswana, and most importantly, we cannot second guess the decision of the Botswana stock exchange.
BPOPF’s argument is that they got exempted from the Rules by the BSE Rules which was supposed to enforce them.
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