By Lesotho journalist Pascalinah Kabi, first published in The Nation on 7 December 2018.
Prime Minister Dr Thomas Motsoahae Thabane has disowned controversial Chinese businessman Yan Xie as his trade advisor amid allegations that the latter has been handsomely rewarded with two big tenders after financing the PM in his personal capacity and the ruling All Basotho Convention (ABC) party at the time of need.
Xie, a naturalised Mosotho of Chinese origin, was appointed Head of Special Projects and the Prime Minister’s Special Envoy and Trade Advisor on China-Asia Trade Network in August 2017 by Thabane.
But more recently, Thabane told this reporter Xie has never been his trade advisor but a good friend with whom he had enjoyed a good relationship since the latter came to Lesotho.
“I have no trade advisor, I have never had such because trade advisors are civil servants and John is my good friend. He has been my good friend since he arrived in Lesotho when he was still poor and our friendship still exists even today,” Thabane said on November 9, 2018.
Relations between Thabane and Xie appeared to have thawed recently after the Chinese businessman spilled the beans in the local media recently that he had bankrolled many politicians in the country, among them the PM.
Prior to his appointment, Xie was the second biggest shareholder in Meraka Lesotho which operates Meraka Abattoir – a company that enjoys unfettered business monopoly as sole importer of red meat into the country since the government’s controversial decision to ban the importation of red meat into Lesotho.
Meraka has been awarded two big tenders to supply the Lesotho Defence Force (LDF) and Lesotho Correctional Service (LCS) with red meat. The restrictions has seen Xie’s Meraka Abattoir enjoy a controversial business domination in the industry.
Asked if it was true that he stayed at Xie’s house, Thabane said: “U isa kae na ke robala kae ngoanaka, u ngoana mang u batlang ho tseba na ke robala kae? U sele hampe ha kaakang u batlang ho tseba na ke robala kae, u ngoana mang? Nxa…” Loosely translated Thabane said: “Why do you want to know where I sleep my child? You are ill-disciplined for wanting to know where I sleep,” before abruptly cutting the phone.
As a result, it was not possible to ask him about whether or not his regime favoured Xie with lucrative tenders. Thabane’s press attaché, Thabo Thakalekoala, promised to respond to questions sent to him on October 31, 2018. When called on November 2, 2018 and the following week, Thakalekoala’s mobile phone rang unanswered.
This reporter commits to publishing the premier and the government’s response to the allegations should the response be availed.
Although Xie denied that the tenders were awarded to Meraka in exchange for preferential favours to Thabane, he confirmed to this reporter that the PM had been staying at his house in a posh suburb of the capital Maseru since February 2017.
Thabane first walked into the house, registered with the Lesotho Administration Authority (LAA) under one of the many companies that belong to Xie, Jackpot Properties, in February of the same year, and now only frequents it as his sanctuary from pressures of the position he holds.
The house in question is registered as plot number 12284-152 with the LAA and this publication is in possession of a copy of a lease issued to Jackpot Properties on February 17, 2010. As per requirements of the Land Act of 1979, Jackpot Properties bought the land from one Thabang Joseph Motsohi, referred to as a “public servant” in the papers.
Well-placed sources in the inner circle of ABC leadership allege that the Lesotho premier enjoys the indulgence of this plush house without paying rent in exchange for lucrative business tenders for Xie.
The sources, who requested anonymity for fear of victimisation in the party, confirm soldiers were posted at the house in June 2017 when Thabane’s ABC cobbled 50 parliamentary seats to form a parliamentary majority with the Alliance of Democrats, the Basotho National Party and the Reformed Congress of Lesotho.
“The house my leader (Thabane) stayed in when he returned from exile belongs to John (Xie). He has never paid rent, John is housing him and his family in exchange of lucrative government tenders,” one source said.
Contacted for comment on October 22, 2018, Xie confirmed that indeed Thabane stayed at a property he owned since February 2017. He was, however, quick to add “I think he is paying around Maloti 8,000 (US$620) in rent.”
“Yes it is true that the Prime Minister is staying at my house and I still charge him rent even today. It is not true that he is staying there free of charge. You see, we did not know that he was going to stay there until we were informed that he has moved into the house.
“There was a lady who came here to sign a contract (sublease agreement), it was never the Prime Minister who came to us. We only learnt later that the lady was acting on behalf of the Prime Minister,” Xie said, adding “I don’t have that agreement with me though.”
On November 2, 2018 the MNN Centre for Investigative Journalism in Lesotho published a report in which Xie admitted to helping fund politicians in Lesotho, among them the PM, in their political party and family activities. In the report, seen by this reporter, Xie admits to aiding Thabane with housing as “he had nowhere to stay” after his return from exile early 2017, prior to the elections that got him into power in June the same year.
Thabane has his own house in Abia, his Maseru constituency. In the article Xie said Thabane paid a monthly rental of about M7,000 (US$543), that the report says was well below the current market rate as the mansion is reportedly located not far from the suspended Chief Justice Nthomeng Majara’s double-storey house, which the state controversially leased for M27,000 (US$2,095) a month.
According to documents sourced from a Ministry of Trade and Industry’s Companies Registry in our possession, Xie is cited as a former shareholder in Meraka Lesotho and ceased to be one on August 2, 2017.
Xie was appointed a shareholder on October 3, 2000, when the company was established and later transferred his 690 shares to his wife Yao Xiaoyi.
Other Chinese nationals Hou Yao and Shen Yao respectively own 750 and 60 shares while local shareholding amounts to 575 shares distributed among (former assistant police commissioner) Bernard Ntaote, Monoang Lekatsa, ‘Mammako Molapo, Mahase Thokoa and Relebohile Molapo. Hou Yao and Shen Yao are Xie’s brothers in law.
Jackpot Properties, Jackpot Construction, Bafani Construction, Teboho Construction, Seroto Construction, Tšepo Construction, Meriti Holdings, Afriworks, Rebirth Recycling and Manufacturing, J&M Properties, John Holdings, Century 21 and Meraka Holdings are some of the companies owned by Xie.
Meraka Abattoir managing director, Mosito Khethisa, denies that there is any relationship between Xie and the business entity.
“Unfortunately he is not a shareholder as an individual, he is out of all his businesses. When one realises they will end up being conflicted at the end of the day, they step down in order to minimise the conflict.
“But, there are some Chinese nationals who are shareholders and I don’t know their relations with him. Meraka is a company owned by Basotho and Chinese holders, the Chinese are investors. Almost all the money used to finance this project is from the Chinese,” Khethisa said.
Asked to confirm if Xie had previously been a shareholder at the company Khethisa said, “I do not know. At the time I arrived there he was not a shareholder. I am sure you are aware that I am new here. I do not know if he was a shareholder before, but current documents do not show any relationship with him.”
But Xie told this reporter he orchestrated the deal which placed this only national abattoir in the hands of the private sector, pleading to be allowed to oversee the “US$1.4 billion deal of exporting red meat from Lesotho to China” without any interference as this will improve Lesotho’s economy.
He said the deal was not arranged under the Thabane regime.
For the US$1.4 billion deal to take off, he said, it was important for government to capacitate Meraka Lesotho through restrictions on the importation of the red meat.
He, however, said he had nothing to do with government policy barring red meat coming into the country. He said that was purely a government policy which would in the long run “benefit the red meat sector.”
Asked to comment on allegations that he was housing Prime Minister in exchange for lucrative tenders, Xie said, “Which government tenders? Could you give me one example of a government tender that has been awarded to me?”
Confronted with additional evidence Xie admitted that the Lesotho government has indeed awarded him tenders to supply red meat.
“I was told that we (Meraka) were awarded the tenders to supply government with meat because we were the cheapest. The Prime Minister has nothing to do with awarding of tenders and we got those tenders on merits.
“No company can match our prices. This has nothing to do with anybody, it’s not true that it was a reward for allowing the Prime Minister reside in my house… he is still paying rent even today,” Xie said.
The decision to impose the ban on the import of red meat into Lesotho, which caused an uproar across the breadth of the country, was announced in November 2017 - four months after Xie’s controversial appointment as Thabane’s advisor.
“I am refuting these allegations that we enjoy monopoly in this country. Everybody can import animals, bring them to us for slaughtering and take their carcass for slicing and pricing at their own place. You must understand that Meraka cannot make profits by slaughtering cattle only, so I buy my own cattle, slaughter them and supply customers with meat.
“I operate like a wholesaler. That is the only way I can be able to survive in this business,” Khethisa said.
Meraka was under probe in 2011 for selling meat condemned by inspectors and slaughtering animals that had not been inspected. In August 2011, the Lesotho Times reported that the Meraka Abattoir ordered that 18 cattle that had not be inspected be slaughtered along the 54 that had been given a clean bill of health.
It was understood that apart from illegally slaughtering 18 extra cattle, officials at Meraka also ordered that the entrails that had been condemned by inspectors be washed and sold to the market.
An independent meat inspector engaged by the Livestock Department at the time, Lengau Lepolesa, said he was aware that Islamic specifications for slaughtering animals for use in their religious rite were not followed by the abattoir – forcing them to cleanse the animals on their own to meet own requirements.
“Some cattle are specifically put aside to be prayed for by an Islamic Imam (religious leader) so that they can be declared halaal or clean according to the Islamic religion. If the abattoir slaughters some of the cattle without the knowledge of the Islamic religion representative it means that it is possible that they can slaughter some in our absence,” Lepolesa was quoted saying.
Seven years later, September 2018, a former Head of Security at Meraka, Lekhooa Mlungu, made startling accusations against the abattoir.
“The abattoir does not even have meat classifiers with the precise credentials. Meat inspectors do both the meat classifiers and animal health inspectors’ job. A bogus abattoir we have. And this is not an allegation, I worked for them as Head of Security and also oversaw operations and administration.
“They lie about halaal too. Their halaal guy is not certified. They buy cattle at prices set by suppliers in South Africa but set prices for our Basotho cattle here in Lesotho. They make up to 80 percent profit with the local cattle. They have employed an old man (ex-government employee) who is pensionable and pay him a salary,” Mlungu said.
Mlungu is not the only one throwing accusations at Meraka’s face, but farmers and butcheries too.
Local butcheries, forced to slaughter their livestock at Meraka Abattoir because of a March 2018 deal signed by Meraka Abattoir and the Ministry of Small Business Development, Marketing and Cooperatives, accuse the abattoir of daylight robbery and incompetence.
The deal seeks to guarantee local red meat producers a market for their produce as it allows them to sell their livestock such as cattle, sheep and goats to Lesotho’s only national abattoir. Minister says the decision was taken after the ministry suspended the issuance of import permits for live animals for meat production.
But the farmers feel otherwise because in August 2018 at a Development for Peace Education (DPE) stakeholders’ meeting attended by farmers, butchers, meat suppliers, parliamentarians, Meraka and Phori, they threw serious allegations against the abattoir.
Mohau Soro of Mohale’s Butcheries said they were being unfairly treated by Meraka and that they were often overlooked as small enterprises.
“We normally arrive at the abattoir at 0800 hrs to buy meat but we will only be served at 1600 hrs and our orders are usually dropped at the arrival of big companies. When we slaughter cattle there, parts of the livers are always missing and in some cases an entire set of entrails is missing.
“We are told that they were infected but we never get to see them. The minister has killed Basotho businesses instead of capacitating them through this arrangement,” Soro said.
Another entrepreneur who identified herself as ‘Marethabile accused Meraka of producing poor meat quality, making reference to an oxtail supplied by the abattoir.
“Some of us specialise with only certain parts of the meat like oxtail, which we are made to wait for at least four weeks and when it finally arrives, it is of poor quality. We are also made to wait for three weeks for sheep’s trotters and this is killing our businesses because in the past we had a regular and reliable supply from South Africa,” ‘Marethabile said.
She added: “It is better to be out of business than selling poor quality meat provided by Meraka.”
‘Mamotlatsi Selepe said Meraka was enjoying unfair competition in the industry as it operated as a wholesaler and retailer at the same time.
“Meraka supplies everything to every big entity in this country. It supplies meat to Tšepong (Queen ‘Mamohato Memorial Hospital), the LDF, the LCS and Lesotho Mounted Police Services and it has never disclosed this information. This policy is not for Basotho, Meraka is not wholly owned by Basotho. We are not making any profits through this arrangement, this is for Meraka, not for Basotho,” Selepe said.
Meraka is not the only company owned by Xie making massive profits supported by government and the Dr Thabane administration. In 2014, when Thabane headed the first coalition government, Xie’s Bafani Construction was paid over M2 million (US$155,187) without doing any construction work at LCS.
Auditor General, Lucy Liphafa, said then in her report: “The audit established that Bafani Construction and Golden Stone International Engineering Corporation were engaged at the Central Correctional Service and it was noted that two payments amounting to M2,182,933.87 (US$169,381) were made to Bafani Construction and six payments totaling to M4,550,643.03 (US$353,100) were made to Golden Stone International Engineering Corporation without the contractors’ claims.
“It was noted that the two certificates for Bafani Construction were issued in one month with the time difference of two days in between, while in other instances five certificates in respect of Golden Stone International were issued on the same dates, i.e. three on 14th March and two on 19th March 2008.”
She said the issuance of all certificates for payments was doubtful considering the nature of work that was being carried out. She said that the scenario was an indication that the certificates were issued for work not yet done and as such, the government of Lesotho funds had been paid for services not actually rendered.
Liphafa said the explanation given was that, payments were made unprocedurally and unlawfully in order to save unutilised funds as it was the end of the financial year.
Another of Xie’s business, J&M Holdings, was earlier awarded a tender to run and administer Lesotho’s ‘Manthabiseng Convention Center.