25 July 2024 | 11:56 AM

Chinese business tycoon reveals how he helped fund politicians in Lesotho – but denies claim of state capture

Key Takeaways

In an exclusive interview in Johannesburg, Chinese tycoon Yan Xie said that the Prime Minister lived in his mansion in the exclusive Maseru suburb of Hillsview after returning from exile in 2017.

He also said:

  • He helped fund the wedding of Thato Nkhahle, the daughter of Pakalitha Mosisili, when Mosisili was prime minister;

  • He sponsored the birthday party of former deputy prime minister Mothetjoa Metsing earlier in 2018. A spokesperson for Metsing’s party, the Lesotho Congress for Democracy (LCD), denied this.

Most major parties dismissed Xie’s party funding claim. However, Basotho National Party (BNP) spokesperson and current home affairs deputy minister Machesetsa Mofomobe revealed that the businessman has funded both him and other individual party members.

Lesotho has no law that forces disclosure of party funding.

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Xie, known universally in Lesotho as “John”, is a naturalised Mosotho who arrived in Lesotho from China in 1990 and built a business empire that includes supermarkets, construction, farming and quarrying.

He topped the news agenda and stirred heated debate when Thabane appointed him “head of special projects and the prime minister’s special envoy and trade adviser on the China-Asia trade network” in August 2017, immediately after forming his new government.

Opposition politicians have accused him of calling the shots in government and using his influence in the premier’s office to advance the interests of the Chinese community at the expense of indigenous Basotho.

A spokesperson for the opposition LCD, Teboho Sekata, said last week that “there are signs that John is controlling the government”.

As a major shareholder in Lesotho’s only abattoir, Xie is seen to have benefitted from the government ban on red meat imports in March 2018.

He is also accused of driving the state’s controversial new policy on wool and mohair, which seeks to localise the industry under the control of another Chinese businessman, “Stone” Shi. (See earlier article here)

Xie dismissed allegations of state capture, saying this “was not even his intention”.

He confirmed that he had urged government to replace the South African-based wool broker BKB with a Chinese concern, Xingbo Holdings, but denied any connection with Shi’s wool export company, Maseru Dawning.

Xie has registered 24 companies in Lesotho, but amaBhungane could not establish if any of these has won government tenders. Lesotho does not have a centralised archive of tender awards.

However, he did say that he has lent money to more than 70 local companies doing government work. He did not provide details of the sectors or the size of the contracts.

Thabane’s wedding took place in August 2017. A red-carpet affair, it was staged in the Setsoto national soccer stadium in Maseru before a crowd of 15,000.

Xie confirmed making a contribution to the wedding of “between M20,000 and M30,000; I can’t remember”, but denied any attempt to buy influence.

“In our culture we give money to people when we have it. We have a culture of red envelope and white envelope,” he said.

“If you invite us to a wedding or any other feast or party, we come with the red envelope. If it is a funeral, the envelope is white. The envelopes contain money for the people who invited us.”

However, a senior source in Thabane’s own party, the All Basotho Convention (ABC), claimed that Xie had paid for “almost the entire wedding”.

The source said the bride’s designer wedding dress in flowing white and gold could have cost close to a million rand.

Xie said he could not recall how much he had contributed to the wedding of Mosisili’s daughter and Metsing’s birthday bash.

On accommodating Thabane after the latter’s return from exile in 2017, he confirmed that he had put up the ABC leader in his house “because he had nowhere else to stay”. Thabane has his own house in Abia, his Maseru constituency.

Xie said Thabane paid a monthly rental of R7,000, “which he sometimes delayed to pay”.

This appears to be well below the market rate. Xie’s Hillsview mansion is reportedly located not far from Chief Justice Nthomeng Majara’s double-storey house, which the state controversially leased for R27,000 a month.

Opposition politicians Ramahooana Matlosa, of the Majalefa Development Movement, and Motlalentoa Letsosa, of Mosisili’s Democratic Congress, argued that Thabane must have been “subsidised by someone or Xie himself”. Xie denied this.

Thabane answered his phone when amaBhungane contacted him for comment, but rang off when the reporter introduced himself. Subsequent calls were rejected.

His spokesperson, Thabo Thakalekoala, said he would not answer certain questions sent by amaBhungane to his email because they concerned the premier’s private life.

He refused to say whether Xie paid towards Thabane’s wedding.

“I sat down with the government secretary (Moahloli Mphaka) and the prime minister himself over your email. It is from that meeting that a decision was made not to answer some of your questions because they request for private information about the PM,” he said.

He confirmed that Thabane had lived at Xie’s house, but refused to say how long he stayed there or what he paid in rent.

“That has nothing to do with the media because it was before he became prime minister,” he said.

Thabane returned from almost two years of self-imposed exile with two of his current partners in Lesotho’s four-party coalition government, the BNP’s Thesele Maseribane, and the Reformed Congress of Lesotho’s Keketso Rantšo, in February 2017.

The fourth coalition partner is the Alliance of Democrats (AD), under Monyane Moleleki.

According to Xie, Thabane lived in his mansion from the date of his return until the elections in June 2017.

Thabane was inaugurated Lesotho’s prime minister on 16 June, 2017. He appointed Xie his trade adviser on 14 August and married Maesiah Thabane the following weekend.

Thakalekoala dismissed the state capture allegations as “desperate measures by the opposition to destabilise the government. It’s rubbish”.

He said Thabane was mentally and physically fit when he made the decision to appoint Xie.

“That prerogative rests with the prime minister. It’s his constitutional right to appoint anybody of his choice to that office. He could have appointed an Indian, Italian, Zulu, Venda or Mosotho,” Thakalekoala said.

ABC spokesperson Tefo Mapesela denied the party ever received funding from Xie.

Mapesela, who is also trade minister, said “no single report was ever made by the party treasurer indicating that the party received any funding from John. It cannot be true that he has ever funded us”.

Asked about the cost of the wedding, and how much Xie contributed, Maesiah’s spokesperson, Silas Monyatsi, said he knew nothing about “the private life of First Lady. I am confined to government business. I do not know anything about John”.

Mosisili postponed a telephone interview, saying he was receiving treatment for a health problem. Subsequent attempts to secure comment from him were unsuccessful. He has yet to read questions sent on WhatsApp.

Repeated efforts to get comment from his daughter were also fruitless.

Questions to Mosisili’s Democratic Congress about funding from Xie also went nowhere. AmaBhungane sought comment from Mosisili’s deputy leader Mathibeli Mokhothu, who referred us to the party spokesperson, Serialong Qoo. Qoo said he was busy and asked this reporter to call later. Subsequent calls were not answered.

But the spokesperson for Metsing’s LCD, Sekata, dismissed Xie’s claim about bankrolling the party leader’s birthday.

He said LCD MPs contributed R100,000 to the event, which was then distributed to charity.

“None of that came from John,” he said.

He said the LCD had never received funding from the tycoon.

“For years we have been struggling to raise money for our election campaigns. Nowhere has it ever come up that money was received from John. He must have been giving it to some individuals, not the party as a structure,” he said.

Sekata said Xie “calls the shots. Lately he issued an instruction for the trade minister (Mapesela) to release some Chinese business people when the latter issued an instruction for their arrest. The minister complied.”

Mapesela dismissed this as untrue.

However, the BNP spokesperson and current home affairs deputy minister, Machesetsa Mofomobe, admitted that Xie had funded individuals in his party, including backing his own election campaign in 2017, and on other occasions. But he said the Chinese businessman had never sponsored the BNP as a party.

“Without his contributions I could not have managed to hire public transport for my supporters when we travelled to some places. I cannot even calculate how much he has contributed to me.”

Machesetsa said it was impossible for Lesotho’s political parties to survive on membership subscriptions only.

“We do approach different business people for funding,” he said.

He said his friendship and business partnership with Xie started “long before I even became a known politician”.

Machesetsa has business links with Xie – Lesotho’s companies registry shows that the latter is a director and shareholder of one of the deputy minister’s companies, Male Holdings.

In addition, former AD executive member Lekhotla Matsaba appears as both a shareholder and director of Xie-owned retail company Cubana Shells Holdings, while AD activist Teboho Mothebesoane acquired his controlling stake in Meriti Holdings from Xie in July 2015.

Efforts to reach Matsaba and Mothebesoane for comment were unsuccessful.

Asked about this, Xie said: “I don’t look at people’s faces. I do business with anyone as long as they have a business vision. They could be politicians, I don’t mind. I help a lot of Basotho to become business-minded.”

Xie relinquished his shareholding in some of his companies in August 2017 when he was appointed Thabane’s adviser, in some cases transferring them to his wife, Xiaoyi Yao.

He said he did this “because she’s also a businessperson”.

One example was his transfer to Yao of 690 shares in Maraka Lesotho on 2 August 2017 – a fortnight before he was appointed Thabane’s adviser.

The government has a long-standing contract with Meraka to manage Lesotho’s only national abattoir, in the Berea district.

In March 2018, the government announced a ban on the importation of red meat from South Africa, in a move small business Minister Chalane Phori said was intended to reserve the market for local producers.

Letsosa and Matlosa were adamant that the embargo was intended to benefit Xie.

Phori said critics of the ban were “government detractors who are desperate to see the current coalition government failing”.

Xie said he was not part of the decision to ban red meat “and I have nothing to benefit from that”.

Other shareholders in Meraka include Hou Yao, with 750 shares.

Another shareholder in Meraka is former assistant police commissioner Bernard Ntaote, who could not be contacted for comment.

Asked whether any of his companies had government contracts, Xie said he preferred to lend money “at small interest” to companies that were awarded government tenders but which lacked the financial capacity to deliver.

“We’ve assisted about 75 companies,” he said.

“Some have disappeared with my money after the government paid them. They owe me,” he said.

His current policy was to sign agreements giving him a temporary controlling stake in companies that approached him for funding, “so that it not easy for them to disappear with my money. The strategy works perfectly.”

Since his appointment, Xie said he had brought major projects from China to Lesotho , “which are all pending approval by the Cabinet”.

These included a project in which 30,000 Basotho women would travel to China as domestic workers. Each would earn R6,000 a month, “three times more than what they are currently earning in the textile factories”.

Lesotho’s textile sector employs about 40,000 workers, many of them women.

Xie said China currently employs 300,000 domestic workers from the Philippines, “and we only need Lesotho to provide 10% of that”.

He said the government is assessing the feasibility of two proposed Chinese proposals for the establishment of 35 pig farms and 35 chicken farms in Lesotho, with a total value of R100-million.

“The government is just too slow. Everything takes too long for the ministers to approve. Lesotho is behind in so many things because ministers don’t make decisions,” Xie said.

Phori confirmed to amaBhungane that the projects were awaiting approval by his small business ministry.

Xie said he had refused to accept a salary for his job as Thabane’s adviser.

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“I told the government secretary (Mphaka) to keep their salary. What can it do for me? It’s a small amount for me,” he said, while refusing to say how much he was offered.

The only benefit was use of a government vehicle “which they insisted on giving me after I was robbed three times in Maseru”.

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Before joining the amaBhungane team in 2017, Micah was the national coordinator for media freedom and diversity at the Right2Know Campaign. He holds a Masters in African Studies from Oxford University and a BA Honours in History from Wits University.

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