The Non-Bank Financial Institutions Regulatory Authority (NBFIRA) has declined to disclose the specific violations that prompted the decision to place Minet Botswana under statutory management.
Responding to our inquiry, the regulator said the shortcomings were identified through its regulatory and supervisory tools.
NBFIRA said Minet was placed under statutory management based on ‘identified non-compliances by the regulated entity, identified through NBFIRA’s regulatory and supervisory tools.’
The Authority did not specify the nature of the non-compliances, the regulatory provisions allegedly breached or when the concerns were first identified.
It said it continually engages regulated entities to ensure compliance, adding that it ‘immediately escalated its intervention to that of appointment of a statutory manager’ when it became apparent that this level of intervention was required.
The regulator also declined to provide details of the inspections, audits, investigations or supervisory assessments undertaken before the decision. It said it had applied supervisory tools provided for under the laws governing regulated entities.
On whether Minet had previously received warnings, compliance notices or remedial instructions, NBFIRA was also cagey, saying it engages regulated entities on identified non-compliances on an ongoing basis. ‘The appointment of a statutory manager was only done after all the necessary steps were taken to address the concerns,’ it said, adding that the intervention was intended to close compliance gaps and protect clients’ interests.
The Authority said its engagement with Minet included the development of a remedial action plan, but did not disclose its contents or the measures that had been required of the company.
Sunday Standard’s request for a chronological account of the regulatory process, including the dates of key decisions and notices, was also declined. ‘Regulatory intervention to that level of detail is confidential between the Regulatory Authority and the regulated entity,’ NBFIRA said.
The regulator confirmed that it had considered and applied a range of supervisory and remedial interventions before placing Minet under statutory management. It again cited confidentiality when asked why those earlier measures had not resolved the concerns. Questions about the role of Minet’s board and senior management also received limited responses.
NBFIRA said its regulatory and supervisory approach takes a holistic view that includes the governance of regulated entities. However, it did not indicate whether any specific findings had been made against the board or individual directors.
Asked what enforcement or disciplinary action had been taken, or was being considered, against directors and senior management, including possible penalties, reprimands, disqualification or removal from office, the Authority also refused to disclose suffice it to say ‘regulatory intervention at Minet Botswana is ongoing.’
The same response was given when asked whether any action had been taken against the board or senior management. ‘Statutory management is a regulatory tool used by the Regulatory Authority as a remedial intervention meant to stabilise operations at a regulated entity and put in place sustainable corrective actions,’ it said. The Authority added that the process also serves as a mechanism for protecting clients and ‘should not be viewed as a punitive sanction’.
Under the arrangement, statutory manager Thulisizwe Johnson assumes responsibility for the management of the company. NBFIRA said Minet continues to service its clients and fulfil its obligations. ‘NBFIRA confirms that Minet Botswana continues to service all its clients and execute all legitimate obligations,’ it said.
The Authority statutory management would be lifted once it was satisfied that the measures implemented by the statutory manager had resolved the non-compliances and addressed the identified regulatory and supervisory gaps.
In explaining the framework governing such interventions, NBFIRA said it uses an established supervisory ladder to address non-compliance among non-bank financial institutions. The measures range from less intrusive interventions to statutory management, licence revocation and liquidation. ‘Statutory management is used when earlier interventions have proved ineffective or immediate action is needed to protect affected stakeholders or the market,’ it said.
NBFIRA described the measure as intrusive, explaining that a statutory manager assumes control of an entity’s affairs to the exclusion of its management and board. It said the intervention was therefore reserved for exceptional circumstances and applied as a last resort.