The Chairperson of the Committee on Statutory Bodies and State Enterprise, Dr. Nevah Tshabang has criticized the National Development Bank (NDB) for poor corporate governance.
This is after the bank submitted unaudited and unsigned financial results to the committee.
The statutory bank, which was formed in 1963 is said to be non-compliant with several financial instruments, with Botswana Accountancy Oversight Authority (BAOA) also said to have raised some issues regarding the bank.
“BAOA has reviewed you and in terms of corporate governance you have come out bad, especially with the delayed financial reporting,” Tshabang told the bank’s Chief Executive Officer, Lorato Morapedi when she was appearing before the Committee on Wednesday.
Tshabang said the BAOA report has also found that NDB for some time now resisting the new International accounting standard of International Financial Reporting Standard (IFSR) 9.
In responding to the concerns raised by the Committee, Morapedi said the NDB Act dictates that audited financial statements should be submitted within six months of year-end which is the end of September every year.
Morapedi said while the bank is guided by its Act, it has also volunteered to be regulated by Bank of Botswana (BoB), whose Act dictates that audited financial statements should be submitted within three months of year-end.
“There have been years that we have been able to submit within the required time frame of Bank of Botswana, unfortunately for the financial years ending 2019 and 2020 we have not been able to do that,” said Morapedi in her attempt to clarify why the bank has not been able to comply.
Morapedi told the Committee that the bank has engaged an independent service provider to help NDB comply with the IFSR 9 and that implementation was completed in 2019.
She revealed that the pending financial statements are currently being audited for the accounting standard. “It is based on that model that there has been lack of closure between us and the auditors because there were differences and because there was no agreement, our board suggested that our consultants, together with our auditors need to come together and reconcile the differences,” Morapedi told the Committee.
Committee Member, David Tshere, who is also Member of Parliament (MP) for Mahalapye West asked whether it is by design or default that the majority of loans written-off by NDB are of politically inclined persons.
Morapedi said it is not correct that NDB writes-off loans of politically connected people. “Everybody who comes to NDB come on their right and are assisted just like any other person and the credit policy is applied the same way,” she said in response to the queries raised by Tshere.
She explained that even when one’s facility is written-off, it does not mean they are off the hook as the write-off is a matter of cleaning up the books. “We will continue to pursue recovery of the debt fully in line with processes available,” she said.
NDB’s loan book currently stands at P775 million and 32 percent of that is said to be Non-Performing Loans (NPLs) while 62 percent is collectable.
