By ‘Majirata Latela
Standard Lesotho Bank says it was directed not to pay dividends to all its shareholders by the Central Bank of Lesotho (CBL) for the fiscal year 2020/21 in response to the impact of the Covid-19 pandemic on the economy.
This was revealed by Standard Lesotho Bank Chief Executive Anton Nicolaisen in a press briefing held on Wednesday in Maseru this week.
The briefing was meant to respond to the recently released acting auditor general’s (AG) report on the status of governments accounts for the year 2020/21.
The report revealed that Standard Lesotho Bank is in the list of state-owned enterprises that have not paid dividends to the government.
In that damning report, the acting auditor general, Monica Besetsa, expressed dissatisfaction with the monitoring of dividends receivable by the government. She showed that situation has not improved as out of 15 entities, only two entities paid dividends totalling M238 million.
“The Central Bank of Lesotho issued a directive to all commercial banks in Lesotho including Standard Lesotho Bank not to pay dividends in response to the Cocid-19 pandemic and in anticipation of its negative impact on the economy.
“This was intended to ensure that liquidation and capital positions in the banking system remain stable with adequate capacity to absorb potential losses that could be anticipated due to economic downturn of which at the time, its length and depth were unknown. It is against this background that CBL responded to the Bank on April 30 2020, declining Standard Bank’s request to pay dividends and the Bank duly complied.
“Standard Lesotho Bank did not fail to pay dividends as may have been implied in the report,” Nicolaisen said.
It is at the same press conference where journalists requested the Standard Lesotho Bank to produce as proof the letter from Central Bank of Lesotho which was directing them not to pay the dividends for the fiscal year 2020/21.
In response, Standard Lesotho Bank’s chief finance and value officer, Mokhejane ‘Moleli said the manner in which the banks operate with the CBL is that the communication between the regulator and the regulated should remain between the two parties. He said in the light of that, if Standard Lesotho Bank shares the communication, that would be a breach of the agreement between the two parties.
“Making the statement boldly should give you confidence that we cannot speak about a bank as big as CBL like that. We are therefore not able to share the communication or give prove that you request.,” he said.
This publication approached the Central Bank of Lesotho for comment, but its stakeholder relations specialist Teboho Senthebane had not responded to our emailed questions at the time of going to print.
Last year in November Besetsa raised concern over the monitoring of dividends that are received by government. This she said after she found out that dividends for the year 2019/20 were less by M151-million compared to the year 2018/19.
The 2020 auditor-general report showed that dividends received represent cash received by the government during the year under review on dividends declared by the enterprises for the previous years’ performance.
The report explained that dividends received during financial year 2019/20 amounted to M171 Million, which was less by M151 Million as compared to the previous year’s figure of M322 Million.
It reveals that out of 15 trading entities, only three entities paid dividends during the year under review and five entities paid in the previous year 2018/19.
The 2021 report of the AG shows that only two entities being Letšeng Diamond mine and CBL paid their dividends amounting to M237,840,000 while other 14 entities did not pay a cent.
