Botswana Public Officers Pension Fund (BPOPF) has landed a final blow on the already limping Fleming Asset Management company, by terminating a P300 million contract for the construction of a hotel in the Central Business District (CBD), which it had with Fleming.
By the 1st of March, Fleming was expected to have transferred anything to do with the construction of four star Hilton Hotel to Messidor Asset Management, a company that now manages BPOPF’s entire property fund.
Chief Executive Officer (CEO) of the BPOPF, Boitumelo Molefe announced this week that her fund has cut all ties completely with Fleming, a company that used to be amongst those that managed most of the money belonging to the BPOPF.
“As you are all aware, the Fund has been working with Fleming on transitioning the development of the Hilton Hotel Project to our Property Manager Messidor. This is a critical and large project and it was critical that the transition is as smooth as possible,” she said.
In her views, when the filthy-rich pension fund decided to terminate its mandates with Fleming sometime last year, the intention was to also terminate the Hilton Project contract, however it could not just be terminate immediately because being a complex project of such a magnitude, she said a smooth transition was needed to ensure that everything falls into place.
Before BPOPF could take the Hilton project to Messidor, Molefe said first a due diligence had to be done for the BPOPF to satisfy itself that there were no irregularities in the project. “Also we had to first do a financial audit, to ensure that management of the project finances was prudent under Fleming’s management before the project could be transferred to Messidor,” she said.
The decision now leaves Fleming with not even a cent to manage on behalf of BPOPF. Just last year, Fleming managed over P4 billion on behalf of the BPOPF, the money of which was invested in South African bonds, some in equity while others are invested in property here in Botswana. The mandates were terminated after the then Fleming CEO was involved in financial irregularities.
Previously both Messidor and Fleming managed BPOPF’s property mandate. Since the termination of Flemings portfolio however Messidor now manages the entire property mandate after it assumed the extra P1.5 billion worth of assets, plus the additional P300 million for the Hilton Hotel Project.
Last year the construction of the P300 million five star Hilton Hotel, which is due for completion in January 2018, was also put to halt by the Environmental Impact Assessment (EIA).
The 153-roomed hotel which is being built on Plot 54366 in the new CBD opposite i-Towers will also have offices, restaurants, gym, pool and conference rooms.
Botswana’s Hilton Garden Inn will be the 12th one in the sub-Saharan Africa while the 11th one is in Swaziland.
Currently Hilton Hotels, which have been operating for 90 years in 94 countries in six continents, have 4,300 hotels over different flags.
However, Fleming has of recent been acquired for P22 million by Capital Management Botswana (CMB), a company owned by Tim Marsland and Rapula Okaile. The Business Weekly & Review asked the two directors whether they thought it was a wise decision to acquire a company that lost business worth over P4 billion and a negative reputation in the industry. Marsland said that the intention was to re-build Fleming into a behemoth asset management company it used to be.
“ Fleming is the first citizen owned fund manager to operate in Botswana, and its legacy cannot be forgotten,” said Marsland.
He said it will be great again, and emerge once-again a giant asset management firm and this time around with solid presence in countries like South Africa, Mozambique and others. “We know it will take a bit of time, but it is worth it,” added
Marsland acknowledged that having lost so much business, the company is currently just on break-even, after it has done so much cost-cutting to remain afloat.