Botswana’s investment screening processes are under renewed scrutiny after it emerged that Foreign Affairs Minister Phenyo Butale recently hosted a politically connected South African businessman whose foundation is embroiled in a major corruption scandal. .
Collen Mashawana, a Gauteng businessman with close links to South Africa’s political elite, was recently in Botswana on what government describes as an exploratory investment mission despite allegations in South Africa linking his foundation to the misuse of millions of Rands in public funds, unpaid workers and questionable dealings with senior government officials.
Butale’s meeting with Mashawana took place during the same month that the minister also met represantatives of Alithea Investment (Pty) Ltd- a company now locked in a high profile High Court dispute with First National Bank of Botswana over an alleged EUR 500 million transfer.
Mashawana’s visit comes as investigations and extensive reporting by South Africa’s Daily Maverick continue to unravel allegations surrounding the Collen Mashawana Foundation (CMF), the Independent Development Trust (IDT) and suspended IDT chief executive Tebogo Malaka.
According to Daily Maverick, Mashawana appears to enjoy remarkable access to South Africa’s political establishment. His social media accounts feature photographs with President Cyril Ramaphosa, EFF leader Julius Malema and former Social Development Minister Lindiwe Zulu.
The publication further reported that the Collen Mashawana Foundation allegedly forged the signatures of hundreds of poor workers in order to claim millions of rands from the Independent Development Trust, a government entity responsible for implementing social development and infrastructure projects.
The workers, according to the investigation, allegedly went unpaid despite millions being transferred to the foundation, while some were reportedly forced to work at private properties belonging to the Mashawana family.
Further reporting by Daily Maverick detailed allegations of corruption, abuse of public funds and exploitation of vulnerable workers following what it described as a year-long investigation. The publication also reported that payments allegedly linked to Mashawana were used toward the construction of an upmarket home associated with suspended IDT CEO Tebogo Malaka.
The investigation states that during Malaka’s tenure, the Collen Mashawana Foundation received a R60 million contract to administer Expanded Public Works Programme (EPWP) employment projects, with most of the money intended for temporary workers.
However, Daily Maverick alleges that despite the IDT transferring at least R23 million to the foundation, hundreds of EPWP workers were allegedly never paid.
Mashawana has denied making any payments towards Malaka’s property and has also rejected allegations that workers were deprived of their wages.
Responding to questions, Foreign Affairs Minister Phenyo Butale confirmed that Mashawana had indeed visited Botswana as a prospective investor.
‘Yes, it is true that he was in the country as a potential investor. He was on an exploratory visit. As the Ministry, we meet with potential investors and arrange meetings for them. We play a facilitating role before directing them to BITC.
He said: ‘We are not aware that he is being investigated in South Africa over allegations of corruption or any other offences. Conducting background checks is a process, and you cannot carry one out on every potential investor.’ Butale said relevant agencies can undertake those checks when an individual is formally seeking to invest in the country.
On reports that Mashawana was picked from the airport by a vehicle flying a ministerial flag, the minister said; I do not know whether he was picked up from the airport in a ministerial vehicle..’However, Butale said if a potential investor has officially written to us expressing an interest in exploring investment opportunities in the country, we can facilitate such arrangements.
‘In this particular case, however, I do not believe it is true that he was picked up from the airport in a ministerial vehicle,’ he said.
Butale’s remarks suggest Botswana’s initial engagement with prospective investors largely centres on facilitating meetings, while formal due diligence is only undertaken later in the investment approval process.
It is understood that while Mashawana has not been convicted of any criminal offence and continues to deny wrongdoing, the allegations surrounding his foundation have become one of South Africa’s highest-profile public procurement controversies, placing Botswana’s handling of prospective foreign investors under fresh public scrutiny.