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Botswana: Court Rejects Testimony in Insurance Case
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Mmegi/The Reporter (Gaborone)
27 March 2008
Posted to the web 28 March 2008
Oliver Modise
Gaborone
Justice Isaac Lesetedi of the High Court has ruled that hearsay testimony by former employees of Mosele Legal Services is inadmissible. But the judge allowed the evidence of expert investigators from Insguard to be heard without taking into account its testimonial value.
Last week the Botswana Insurance Company (BIC) rushed to court demanding an audit of Mosele Legal Services following reports of fraud, money laundering and illegal insurance practices by the company's directors, Base Sebonego and Motha Kaang. The company has been selling legal insurance policies on behalf of BIC.
On Tuesday, Mosele asked the court to strike out a report by South African private investigators Insguard. The report alleges fraud and money laundering by the company's former employees. Mosele opposed the report on the grounds that it was based on questionable and scandalous hearsay.
Mosele lawyer, Sadique Kebonang submitted that it was surprising all the sources quoted in the report were unwilling to make written statements and yet the court is required to give credibility to the allegations. The confidential report attached to the filed court documents cites numerous instances of possible fraud and money laundering carried out by Mosele and Base Sebonego. BIC says it suspects the company or its directors might be diverting the subscribers' funds for personal use and not disclosing all the premiums.
"No plausible or reasonable explanation is offered as to why they are unwilling to come forth with their alleged evidence," said Kebonang. In his submissions, Kebonang castigated former Mosele employees Roseline Panzirah, Abdul Kgengwenyane, Onah Mangwane and Thandi Mooka for failing to put a 'pen where their mouths are'. He termed their testimony wild accusations made by disgruntled former employees who have a score to settle.
Kebonang submitted that he was questioning the quality of the whole investigation. He said it was not clear who really conducted the investigations. "It is submitted that there is no affidavit from Hannes Van Rooyen, (Insguard managing director), confirming that he conducted the investigations, that he authored the report in question and more importantly that the contents of the said document is true," submitted Kebonang. He charged that BIC reference to an issue of acknowledgement of debt to push its case was highly scandalous and without any foundation.
He said that BIC wanted to pass a report of hearsay as showing acts of fraud and money laundering at Mosele. BIC lawyer Tshiamo Rantao responded by saying the hearsay evidence in question is not standing alone because it is supported by documentary evidence. "The matter does not end there," he said.
He called upon the court not to ignore findings that Base Sebonego was faking his younger brother's signature Kagiso Sebonego who is listed as a director of Mosele. "We submit it's a criminal offence," he said. He added that Mosele had not said anything on concerns about legal fees on conveyancing and wills being added to the insurance product without the permission of its underwriter - BIC's. "Clearly the respondent was in breach of the contract and also in violation of the Insurance Industry Act," he said.
He said the Insguard managing director signed the report after the investigations on behalf of the company and hence there should be no doubt about its authenticity. Lesetedi adjourned the case on Tuesday evening after a whole afternoon of exchanges between BIC and Mosele. The case continues tomorrow. It has been revealed that in July 2005, BIC entered into a one-year agreement to be underwriter for Mosele. The agreement was subject to automatic renewal in 2006. BIC managing director Dziki Nganunu said the first agreement expired in July 2007 and it was discovered that the trust account was short by P440,000. It emerged that Mosele had blundered by honouring claims worth P75,000 that should have been handled by the now defunct Botswana General Insurance (GID), Mosele's previous underwriter.
Price Water House is to complete its audit of Mosele within 21 days and the police have been authorised to assist the auditors to comply with the order. Nganunu and BIC principal officer, Lorraine Fourie, and the chief finance officer, Johan Claasen, have taken over as signatories at Mosele Legal Services.
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Meanwhile, BIC has issued a press statement urging all its legal policy subscribers under Mosele not to panic stating that all valid claims will continue to be honoured.
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