Legal Dispute Between Enrich Holdings and Lesotho National Development Corporation
Enrich Holdings has taken legal action against the Lesotho National Development Corporation (LNDC), seeking payment of the outstanding amount from a M15 million loan agreement signed in January 2024. The dispute centers around LNDC’s alleged failure to disburse the remaining M13.5 million of the loan, which has led to significant financial strain for Enrich Holdings.
The Lesotho Times has obtained a letter from Enrich Holdings to the Law Society of Lesotho (LSL) requesting arbitration, as stipulated under Section 12 of the loan contract. This clause requires disputes to be resolved through arbitration before any court intervention.
Background of the Loan Agreement
The loan agreement was signed on 31 January 2024 by LNDC interim Chief Executive Officer, Advocate Molise Ramaili, and Enrich Holdings’ then Board Chairperson, Thato Damane, with Mr. Morolong signing as one of the witnesses. According to the agreement, the lender shall advance a loan of M15 million, to be disbursed in two parts: M6.5 million upon commencement for operational expenses, and M8.5 million into a call account to facilitate suretyship for the borrower’s suppliers. The loan was to be disbursed only when the conditions set out in Clause 7 were met.
Enrich Holdings’ Contention
Mr. Morolong stated that Enrich Holdings met all the conditions in Clause 7 of the agreement, including providing collateral in the form of company assets. However, he claimed that LNDC later demanded that Enrich shareholders update their details with the Ministry of Trade, Industry and Business Development — a requirement the company could not meet immediately due to challenges of renewing expired national IDs amid a nationwide issuance crisis.
LNDC issued an invalid cancellation of the loan based on Clause 8.3, which requires an up-to-date share register and proof of share contributions. Mr. Morolong argued that this condition was met, as all relevant information was submitted to LNDC and its transactional advisor.
Clause 8.3 of the loan agreement states: “The borrower shall provide a share register and certificates that are up to date, together with proof of contributions or acquisitions of shares.”
The Special Purpose Vehicle (SPV)
Enrich Holdings’ board held a special meeting on 8 June 2024, where it was resolved that directors Thabo Qhesi and Paul Mosuoe would represent the company in the SPV. However, Mr. Morolong said a dispute arose when LNDC allegedly altered the agreed SPV structure.
“The SPV was registered as a new company called Enrich Investments (Pty) Ltd in July 2024,” he explained. “Instead of serving as a financing vehicle for Enrich Holdings, it became a separate company — 90 percent owned by LNDC and only 10 percent by Enrich Holdings. This contradicted the loan agreement, which made Enrich Holdings the legal recipient of the funds, not Enrich Investments.”
In a letter to Adv Ramaili dated 18 November 2024, Mr. Morolong cautioned LNDC about the implications of the new arrangement. “Housing Enrich Holdings’ business activities under the SPV effectively renders Enrich Holdings dormant,” he wrote. “Such an arrangement could be interpreted as a scheme to defraud creditors. It also breaches accounting principles since Enrich Holdings is legally required to prepare consolidated financial statements including all subsidiaries, which becomes impossible if the parent company is inactive.”
Violation of Legal Obligations
Mr. Morolong said that in December 2024, LNDC proposed that the loan be disbursed into Enrich Investments (Pty) Ltd, instead of Enrich Holdings. “This violates the terms of the loan agreement because the legal borrower is Enrich Holdings,” he said. “The new proposal suggested that Enrich Holdings should find other means to service its debt obligations, which contradicts Clause 8 of the agreement. The objective of the rescue package was to settle all outstanding debts — a condition explicitly stated in the contract.”
LNDC’s Justification
LNDC accused Enrich Holdings of failing to meet critical loan conditions. A detailed internal evaluation report seen by the Lesotho Times cites internal contradictions, leadership instability, and possible fraud risks within Enrich Holdings as reasons for withholding the funds. According to LNDC, Enrich never submitted a complete and up-to-date share register. The corporation claims that some known shareholders were missing and that certain shareholders intended to exit the company in exchange for payments — raising suspicions that the loan might be used for shareholder buyouts rather than business recovery.
LNDC maintained that the creation of the SPV was “the only viable mode of assistance” and formally requested Enrich to either accept or reject the proposal in writing.
When contacted for comment, LNDC Corporate Communication Manager, Tiisetso Moremoholo, said the matter was no longer a priority issue for the corporation as its coverage had already been exhausted in the media. “Since the Enrich story has received wide media attention following the decision not to proceed with funding for reasons articulated in the story published by the Lesotho Times some time back, the corporation is now turning its attention to other activities and has since moved on from this issue.”
