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1.      On 3^rd March, 2003 the staff of Privatisation Unit together with Standard Bank Lesotho Unit Trust conducted a Public Awareness Campaign in the district of Mafeteng at the offices of the Police (60), the Ministries of Defence (12), Trade (3), Sub-Accountancy (5) and Health (4).  The people who attended the roadshow were estimated at around 79 in number.

2.      On 2^nd April, 2003 the Public Awareness delegation presented in Qacha’s Nek for Heads of Departments (24); Qacha’s Nek Police Headquarters (14); and Qacha’s Nek Prisons (18)

3.      The delegation to the roadshow comprised:

-         Ms. Ntsoaki Kamoriwo      Standard Bank Lesotho Unit Trust

-         Mr. Makalo Ntsasa            Privatisation Unit

-         Mr. Motlatsi Majara           Privatisation Unit (Mafeteng)

-         Mr. Ntai Mokhitli               Privatisation Unit (Qacha’s Nek) 

After the Presentations were delivered to the participants, the following questions  were posed:

1.      What would happen if all the companies went under? 

The chances of all companies going under are limited and besides, the reason why the portfolio is so diversified is to minimise the opportunities of investors losing their investments. The role of the Management Company is also to keep monitoring the performance of various enterprises that have been included in the investment portfolio so as to pull out in case an enterprise is not performing to the best interest of the investor. 

2.      Explain why Lesotho Bank was privatised?

Lesotho Bank was privatised because it was incurring losses that required financial support of an estimated M20 million a month and the Government had to shoulder the burden of subsidising it. The status of the Bank at takeover included missing physical records or in state of disarray; inaccurate account information; low staff morale; lack of service ethic; and disregard of routine compliance.

3.      How will I be informed about my investments?

Statements are going to be mailed to the investors monthly for investors using debit orders while those who invested in bulk will be given statements periodically. The latest information on the Unit Trust is also published in Mopheme newspaper weekly.  The investor also has the option of directly contacting us at the office.

4.      How do you deal with the poor who do not possess any accounts?   

The only solution here is to invest at a minimum of M500 because amounts lower than this would be administratively expensive for the bank and can only be administered using the debit order.

5.      When the rand is devaluated, does it not affect the account?

The portion of  the portfolio invested in rands (60%) is in no way affected. But with the depreciation of the rand, the portion invested in offshore accounts in dollars (30%) will be positively affected since the investments will yield more in rands and thus mean more dividends for each investor. In fact, this is the main reason for including offshore investments in the portfolio.

6.      Can I borrow money from the Unit Trust? 

No, but the investor can pledge the investment as payment to the lender in which a share certificate will be issued to the lender as collateral against the loan. This means the investor will not be able to repurchase the units until the loan has been fully paid up.

7.      Can I add on the investments that I already have? 

Yes. The shares purchased can be added on because there is no upper limit on value of units purchased. 

8.      How is the management of the Lesotho Unit Trust formed? 

The management of the Lesotho Unit Trust is formed of Standard Bank Lesotho (51%) and PMB/Harley & Morris Joint Venture (49%). 

9.      Why invest particularly in America and not in South Africa? 

The reason for investing in the US is because of the attractiveness of the exchange rate of the dollar vis-à-vis the rand which implies more gains for the investor. The depth of the financial sector is such that there are more attractive returns for investors than elsewhere in the world.

10.  Can the investor bank in Lesotho or elsewhere? 

Unfortunately the system that we have is not compatible with that in South Africa thereby making it difficult for us to make transactions from accounts located in South Africa. But when repurchasing units investments can be transmitted to any account of your choice locally or across the border. 

11.  What if the investor disappears with our money? 

The Standard Bank of South Africa falls under the Standard Bank Investment Corporation which is listed in the Johannesburg Stock Exchange. The Standard Bank of South Africa has two main functions which are retail and wholesale functions. The retail functions are the usual banking services of Standard Bank that are provided by the Bank by branches all over Southern Africa including Lesotho.  

The wholesale function of Standard Bank which incorporates asset management commenced in 1972 and is carried out by Standard Corporate & Merchant Bank (SCMB). SCMB manages assets of over R40 billion for countries such as South Africa, Namibia, Botswana, Kenya and Lesotho. In view of the fact that Standard Bank is such a large company the chances of its disappearance are very unlikely. 

12.  What happens to my investment when an investor passes away?

Once the estate of the deceased is wound up, which will include sufficient proof of the beneficiaries, the investment will be given the next of kin as in the case of a normal bank account. 

13.  In case the investment does not succeed, what happens? 

The Trust Deed provides that in case of a massive redemption of units by unit holders all monies due to unit holders will be paid accordingly by the Management Company. 

14.  How do I join as an association, and what happens when I intend to sell my units as an individual?  

Associations may also invest in the Unit Trust but first passports of signatories have to be provided with the names of the rest of the members and the Constitution of the Association. When one of the members of the Association intends to repurchase their units, the current market value of the units will be determined, and thereafter the repurchase value of the units will be divided by the number of members of the association to find how many units are due to one member. Payment will then be processed. 

15.  How does Lesotho Unit Trust differ from Thusano Trust? 

Thusano Trust was an informal pyramid scheme that collapsed because too much money was lent to one individual. Non-payment by the individual who borrowed from the Trust meant there was no legal recourse to follow as the scheme had an informal status. The Lesotho Unit Trust is a legal investment vehicle registered under Collective Investments Schemes regulated by the Central Bank of Lesotho.  The aim of the Government setting up LUT is to change the behaviour of Basotho to invest for the future instead of borrowing from financial institutions as this has not borne any meaningful fruits for borrowers and for the economy in general in the past. That is why an investor cannot borrow money from LUT. 

16.  Imperial Fleet Services  being a branch of Imperial Holdings is listed in the stock exchange. Is Imperial Fleet Services  affected by the stock exchange? 

Imperial Holdings is indeed affected by the stock exchange. But since the Imperial Fleet Services is a branch operating in Lesotho and the fact that there is no stock exchange in Lesotho is an advantage because the value of the companies in the LUT portfolio will  be based on the valuations of companies that are calculated twice yearly. This implies that the variations in share prices of the companies listed in the stock exchange do not exist in Lesotho and are thus not affected. 

17.  Do I have to start a separate account from my current bank account when investing? 

As a new investor in LUT a new account will be issued that will be separate from your current or savings account. 

18.  How is the interest rate calculated? 

The returns due to an investor will be based on the capital invested. Thereafter any dividends yielded will be compounded on the prevailing investment. 

19.  Explain the relationship between the privatisation of state owned enterprises and the Lesotho Unit Trust?  

Following the privatisating of state enterprises that started with the passing of the Privatisation Act of 1995, the strategic investor acquired majority shareholding of the enterprise while minority shares were held in trust for Basotho for eventual transfer to the LUT. The minority shares in LUT form part of the portfolio of shares under privatised enterprises comprising 30 percent of each unit. In this way, investors have diversified their investments in blue chip companies in Lesotho; treasury Bills (30 percent); and offshore investments (30 percent), while 10 percent is held as cash.