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How Pula Steel became a failed project

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NOT AMUSED: Verma

Following their reluctance to speak to the media over the years, former director of Pula Steel, Deepak Verma this week told of how the project – which at the time of its collapse was part of BCL Investments– failed.

Initially, Pula Steel was a partnership between the Verma family who happened to be the founders and majority shareholders at 80 percent and Wealth Generations – a company which belonged to Botswana Democratic Party (BDP) Secretary General, Mpho Balopi.

Balopi ran the company with his business partner, Bryan Mosenene.

The other investor in the project was Citizen Entrepreneurial Development Agency (CEDA), while Botswana Development Corporation (BDC) is also reported to have shown interest in investing in the project.

On Tuesday this week, Verma, who said he wanted to tell their side of story as the company founders, blamed a mixture of factors for the collapse of Pula Steel.

Verma also came short of blaming other shareholders, among them BCL which at the time of its liquidation held over 50 percent stake in Pula Steel.

According to Verma, who started the company with his father in 2010, Pula Steel’s troubles began when there was a delay in allocation of land.

“There was a delay in land allocation to Pula Steel, money was dispersed, suppliers were paid and were left in limbo,” said Verma, adding that he does not find himself anyway responsible for that as he attempted to absolve himself from the circumstances.

Giving the sequence of events that led to the collapse of Pula Steel together with its major shareholder, BCL, Verma said delay in allocation of a plot led to the company losing 12 months of operations, during which time the CEO, Bryan Mosenene was also earning a salary.

“Any project, if you delay in timelines of implementation, that is the first step of derailment and after that it would need more money because expenses would have been incurred in the process,” he explained and added that him and his father are the only two directors who did not earn salary during this time.

Verma, who says he was refused both resident and work permit renewal twice in 2017 says during this time, around 2012, Pula Steel had no relationship with BCL.

Seeing that the company was experiencing troubles, among the acquisition of land, Verma says it was then that it was decided that an influential partner was needed, and it was when BCL came into the picture.

“BCL Limited at the time claimed it ran 6 percent of GDP of the country, so if they run 6 percent of the country, they are bound to be influential,” insisted Verma, saying with this figure, it meant BCL influenced the policy of the country.

Verma explained that the agreement was that the Vermas will sell their shares to BCL, but the copper mining company said it needed a minimum of 50.5 percent in the company which was compulsory.

According to Verma, Pula Steel should not have gone into liquidation because the agreement was that if it happens that one partner in Pula goes into liquidation, the liquidating partner will sell their stake to other partners.

However, this was never the case with Pula Steel as Verma claims he wrote to Nigel Dixon-Warren, BCL liquidator to buy-back those shares but he refused.

This is a claim that Dixon-Warren has dismissed as untruthful in an interview with The Voice this week.

According to Dixon-Warren’s account, the company was still under judicial management and all shareholders were requested to inject money into Pula Steel before anyone could buy those shares.

He said BCL put in the money and other shareholders were suppose to refund BCL, but applied time-delaying tactics until he eventually ran out of patience and applied for the liquidation of Pula Steel.