20 Jul 2017

Prior to its placement under liquidation, BCL was a shareholder in Pula Steel, investment, trade and industry assistant minister, Mr Biggie Butale has said.

Mr Butale said whilst BCL held shareholding in Pula Steel, it did not have sole proprietorship of the company as there were other shareholders.

“Therefore, Pula Steel is regarded as a separate entity from BCL. However, it should be noted that recently CEDA, which is a government-owned parastatal, successfully petitioned the court as a creditor in order to safeguard its investments,” he said.

Consequently, the assistant minister said Pula Steel was placed under judicial management, and that as a result, BCL investment was similarly safeguarded through the same process.

Due to lack of working capital, Mr Butale said Pula Steel had been closed since October 2016, adding that part of the appointed judicial manager’s responsibility was to facilitate raising the requisite capital to resume the operations of Pula Steel.

On March 8 this year, Mr Butale said 98 employees were retrenched at the instruction of the judicial manager, and that five employees were retained as the maintenance care team to take care of the plant.

The five remaining employees, he said, were paid by the judicial manager.

“We are unable to provide details of the process or procedure that BCL undertook to make a determination of the purchase of Pula Steel stake,” he added.

Selebi-Phikwe West MP, Mr Dithapelo Keorapetse had asked Mr Butale why Pula Steel was not part of the liquidation proceedings before court, and if government was abandoning its investments in the company and why it was currently closed.

He had also asked how many people were or were currently employed by Pula Steel, and who paid their salaries and who conducted due diligence on the company as part of the purchase agreement for the acquisition of Pula Steel. ENDS